A class-action lawsuit has been filed against the parent company of Central Maine Power Co. and another energy company alleging that the two conspired to raise electricity rates for customers in New England.
The lawsuit, filed in federal court in Boston on Thursday, alleges that Avangrid, the Connecticut-based corporate parent of CMP, and Eversource Energy, inflated electricity prices to New England customers by as much as 20 percent from 2013 to 2016. Eversource is based in Springfield, Massachusetts, and serves that state, as well as New Hampshire and Connecticut.
“Eversource and Avangrid are two of the largest energy companies in New England, and we believe they chose to use their substantial market power to unlawfully jack-up consumers’ electric bills,” Tom Sobol, partner at the law firm Hagens Berman, which filed the claim, said in a statement. “It appears these companies willfully engaged in this scheme for years, and we intend to help those affected reclaim their losses, and stop this behavior.”
On Thursday, Avangrid spokesman Michael West said the company is reviewing the lawsuit and “will vigorously defend against these claims.” Eversource has denied any wrongdoing.
Three Maine residents – Margaret and Richard Lewis of Walpole and Eric Long of Lewiston – were among the 12 that filed the lawsuit in U.S. District Court in Boston on Thursday, according to court records. Attempts to contact the three Mainers were unsuccessful Friday night.
The lawsuit alleges that 14.7 million customers in New England were affected by “a unique monopoly” between Eversource and Avangrid that resulted in $3.6 billion in over charges.
It claims Eversource and Avangrid manipulated of the amount of natural gas available to power plants by reserving in advance far more capacity in the area’s limited pipelines than they knew they would need. This artificially limited the amount of gas, which is used to fuel many of the region’s power plants, therefore pushing electric costs higher.
The two companies are being investigated by the Connecticut Office of Consumer Counsel and the state’s public utilities authority on charges of market manipulation. The investigation was sparked by a report from the Environmental Defense Fund, which drew condemnation from the Northeast Gas Association.
“The report authors’ claim that some natural gas and electric utilities in New England are systematically reserving excess natural gas pipeline capacity on the coldest winter days in order to increase the prices charged by a small portfolio of electric power plants is false and, frankly, ridiculous,” the association’s report states. “The prices that any utility-owned power plant receives are strictly regulated and passed through to customers without added profit.”
West said Avangrid’s two Connecticut subsidiaries, Connecticut Natural Gas and Southern Connecticut Gas, are obligated to provide reliable gas service to their customers.
“SCG and CNG reserve and nominate/schedule pipeline capacity to help protect customers from interruptions – including during unpredictable, extreme weather conditions,” he said. “These companies operate in Connecticut, where they are required to serve as the ‘supplier of last resort’ for retail, commercial and industrial natural gas customers interconnected to the gas distribution companies. In providing service to customers, Avangrid seeks to comply with all state and federal regulatory requirements.”
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