Testimony of Lara Levison

Energy Committee Chair, DC Sierra Club

Formal Case No. 1142: Merger of AltaGas Ltd. and WGL Holdings, Inc.

DC Public Service Commission Community Hearing

November 30, 2017

Good evening, Commissioners. My name is Lara Levison. I am a DC resident, living in Ward 6, and I’m the volunteer chair of the DC Sierra Club’s Energy Committee. I am testifying on behalf of the DC Sierra Club to express our opposition to the merger of AltaGas and WGL Holdings. The DC Sierra Club has more than 3,000 members and 10,000 supporters in DC.

My testimony will focus on Public Interest Factor #5, which is the Commission’s ability to regulate the new utility effectively, and #7, the conservation of natural resources and preservation of environmental quality.

Regarding #5, the DC Sierra Club is deeply concerned that AltaGas, which is a Canadian company, would be able to use the North American Free Trade Agreement (NAFTA) to challenge DC environmental, public health, and other regulations. The national Sierra Club has submitted comments to the Maryland Public Service Commission regarding this concern.

The investor-state dispute settlement provision in Chapter 11 of NAFTA enables a corporation to sue a NAFTA country over its regulations if those regulations reduce the returns for investors in that corporation. In all 3 NAFTA countries, corporate investors have used these Chapter 11 rules to challenge local, state, and national environmental and public health laws.

If this merger were to go through, it would set up a scenario in which Canadian investors could argue that the date of the merger is the regulatory status-quo against which they expect to receive returns on their investment.

Regulatory change is likely in DC. Our laws and regulations continue to evolve to address the challenges we face, and must continue to evolve if we are to do our part to avert dangerous climate change.

Changes to DC regulations that constrain carbon emissions could provide AltaGas with the basis under NAFTA for suing the U.S. government for reduced returns to investors. It would be up to the US federal government to decide whether to protect our local environmental and health standards, or to settle with the corporate interests in their favor. The dispute resolution process is not at all transparent and does not allow for public input.

Regarding Public Interest Factor #7, as you know, the District has adopted the goal of reducing greenhouse gas (GHG) emissions 50 percent below 2006 levels by 2032 and 80 percent by 2050. I’m sure you understand how serious the climate threat is.

If you haven’t yet reviewed it, I would recommend taking a look at the Climate Science Special Report released by the federal government earlier this month. The challenges include heat waves, droughts, sea level rise, ocean acidification, floods, increased wildfires, spread of tropical diseases and parasites, accelerated extinction of species, and more.

The Sierra Club believes that AltaGas would not be a good partner for DC in achieving our goals of reducing greenhouse gas emissions. In the near term, it is important to reduce methane leaks from our gas supply system, since methane is a powerful greenhouse gas. As pointed out in filings on this merger, AltaGas has little experience with an aging system like ours, which is in need of considerable upgrades to reduce methane leaks and improve safety. AltaGas has not, as I understand it, presented a detailed commitment or plan for reducing methane leaks from our natural gas supply system here in DC, beyond those that are already planned.

Furthermore, AltaGas is at its core a natural gas company, and it seeks to grow as a natural gas company. In our rapidly warming world, we must move to phase down fossil fuels, including natural gas, as rapidly as possible if we are to avoid catastrophic climate change. As the DC Government’s filings point out, “AltaGas has not demonstrated that it is committed to and understands the energy system transition envisioned by the District’s energy and sustainability policies.”

Instead, AltaGas considers climate change regulations a risk to be mitigated. This brings me back to our concern that AltaGas will use NAFTA to resist or block DC regulations, including climate change mitigation policies.

In closing, the DC Sierra Club opposes this merger, and you can expect to hear more from our members before the comment period closes. Thank you for the opportunity to testify.