Back Bay/South End Pipeline: AG Opposes Price Break Deal for One Dalton

For more details on the AG’s filing, here is an article from Universal Hub:

AG opposes gas-pipeline price break for new Back Bay high rise

Attorney General Maura Healey this week urged state regulators to reject a deal between National Grid and the developer of the 61-story One Dalton project that would give the developer a price break on a required gas main and let it avoid the energy-efficiency charges regular customers who are not building luxury hotel/condo projects have to pay.

“Simply, this Special Contract is nothing more than a special deal for a real estate developer and its hotel and luxury condominium customers that is unavailable to any other core, firm-service customer,” one that could ultimately mean higher prices for less well off customers, Healey’s office writes in a filing with the state Department of Public Utilities.

The DPU has authority over both the proposed deal and the new 4,100-foot pipeline National Grid wants to put under the Back Bay to feed One Dalton – and other customers.

The exact amount One Dalton would pay for construction of the new main is redacted from state filings, but both the AG’s office and National Grid call it a “multi-million-dollar” project. National Grid says the proposed savings – also redacted – are to help out developer Carpenter & Co. because the construction cost would be “unusual and would be a financial burden on One Dalton.”

Healey’s office did not explicitly condemn the new pipeline, which some Back Bay residents are fighting, but noted that while National Grid points to One Dalton as the main reason to build it, the company has proposed using it to feed other new customers in the neighborhood, and that those customers would have to pick up a higher share of the costs of the pipeline due to the One Dalton deal.

The AG says National Grid estimated that One Dalton – which will include a 215-room Four Seasons Hotel topped by 160 luxury condos – would need a 6-inch gas main to feed it, but that the company is proposing a main of between 12 and 20 inches wide.

“The Department should consider which customers can afford to engage in large development projects requiring multi-million dollar [gas-main construction contracts]. In the case of One Dalton, it is a developer of a sixty-one story building in one of the country’s most expensive neighborhoods that is reportedly selling a condominium upwards of $40 million to a CEO of a Fortune 500 company … A policy allowing special rates for customers requiring large [contracts], solely because they have large [contracts], favors those with the most economic resources at the expense of other, less-wealthy firm distribution customers.”  Excerpt from the AG’s brief