Sierra Club files antitrust claim against DTE pipeline

Holly Fournier
The Detroit News

A national environmental group has filed an antitrust complaint against DTE Energy over its proposed natural gas pipeline, alleging the project will raise consumer energy prices above competitive rates.

The Sierra Club filed the complaint in response to a planned 250-mile, multi-billion dollar pipeline, partially financed by DTE and affiliate Nexus Gas Transmission, LLC. The project is slated to deliver natural gas from Ohio to Michigan, officials said in their complaint.

"DTE Electric has contracted to buy delivery of natural gas over the pipeline for use in generating electricity for resale to Michigan retail customers. When DTE Electric entered into this contract, at least six alternative sources of gas were available to transport the needed supply," officials said. "All six offered transportation services at lower rates than Nexus Nonetheless, DTE Electric contracted to buy gas from (the) proposed pipeline, despite the availability of these less-costly alternatives."

DTE defended the proposed Nexus Pipeline, saying it would bring "cleaner burning energy at affordable and stable prices to Michigan and Midwest consumers."

"This project will give Michigan utilities and their customers access to the lowest price natural gas reserves in the nation," spokesman Pete Ternes said in an emailed statement. "In addition, it will reduce the distance natural gas has to travel compared to current sources thousands of miles away."

DTE co-owns Nexus alongside partner Spectra Energy, said Ternes.

In contrast, the Sierra Club suit claimed consumers would be hit with higher energy costs as a result of DTE's involvement with the pipeline, according to the Sierra Club.

"The pipeline project, if permitted to continue, will raise retail electricity customers’ rates above competitive levels and exclude more cost-effective energy suppliers, including renewable energy sources," officials said in a press release.

The complaint was filed with the Federal Energy Regulatory Commission (FERC), United States Department of Justice, and the Federal Trade Commission, officials said. It alleges that while companies like DTE have "legal monopolies" to sell electricity to consumers, they cannot use that power to "gain control over the market for generating capacity."

The planned pipeline would give Nexus and DTE illegal control over the market for local electricity generation, officials claim.

While the complaint focuses on alleged antitrust violations, officials in their press release also touched upon their environmental concerns with the project.

“The dirty and dangerous Nexus project is a payoff scheme for corporate polluters with Michigan consumers footing the bill,” said David Holtz, chair of the Michigan chapter of the Sierra Club. “Solar and wind power continues to be a better and cheaper alternative to dirty fuels, which only gives further indication as to the real reason behind this pipeline.”

DTE also responded to these allegations, saying it has a commitment to renewable energy sources, and that the pipeline would "enable significant carbon reductions for the state"

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