Dive Brief:

• The Sierra Club has filed a complaint with the Federal Trade Commission over DTE Energy's plans to develop a 250-mile gas pipeline that would be owned by affiliate NEXUS Gas Transmission. The environmental group says the pipeline would allow Michigan's largest utility to control the state's generation market.
• The project would transport Appalachian shale gas to markets in the Midwest, including Ohio, Michigan, and Chicago, and Ontario, Canada.
• DTE officials defended the project, the Detroit News reports, saying it would give the state's consumers access the lowest-priced natural gas in the country.

Dive Insight:

Environmentalists have taken a three-pronged approach to challenging DTE and Spectra's pipeline, filing a complaint with the Federal Energy Regulatory Commission, U.S. Department of Justice, and the Federal Trade Commission, arguing the utility would control too much of the state and regional gas supply if the line is completed.

The Sierra Club alleges the NEXUS project uses DTE's market power to charge ratepayers for the project’s above-market cost.

DTE now controls about half of local electricity generation market, and opponents of the project say the NEXUS pipeline could dive that figure higher.

David Holtz, chair of the Michigan chapter of the Sierra Club, said the pipeline is “a payoff scheme for corporate polluter," and in a statement added "solar and wind power continues to be a better and cheaper alternative to dirty fuels."

The proposed pipeline would have a peak day capacity of 1.5 billion cubic feet, and Spectra and DTE say they expect it to be complete next year. The Sierra Club noted that its complaint follows a similar challenge to the Atlantic Coast pipeline, proposed by Dominion Resources and Duke Energy. 

“Our complaint shows that there is no plausible competitive justification for DTE Electric to make a long-term commitment to buy gas at above-market prices,” said Pat Gallagher, director of the Sierra Club’s Environmental Law Program. “The federal competition authorities should take notice because ratepayers, the environment, and competition in the generation market all are harmed by this deal.”

Opposition to gas pipeline development has been growing, and in some markets grid operators say the backlash against infrastructure could be putting electric reliability at risk.

New England ISO Vice President of Operations Peter Brandien last month filed testimony with FERC saying its "ability to meet electric energy needs is at risk if the natural gas infrastructure serving the region is unable to supply fuel to gas-fired generators."

Gas industry insiders, however, expect the Trump administration to help bring a friendlier atmosphere for pipeline development, with pro-fossil fuel appointees at federal posts like FERC and the EPA.