Natural gas line clears way for 1.1 million-square-foot warehouse in ... - Worcester Telegram

Natural gas line clears way for 1.1 million-square-foot warehouse in Douglas

Natural gas line clears way for 1.1 million-square-foot warehouse in Douglas. Some not pleased

Massachusetts officials approved an expansion of an Eversource gas line into Douglas. One watchdog believes the process was done in secret to keep opposition at bay.
Henry Schwan

DOUGLAS – As Matthew Wojcik stood in a dirt parking lot, overlooking an expanse of land, he commented on how the view summed up the aesthetic and environmental aspects of Douglas.

At one end is a patch of open space, in the middle is a privately owned solar farm, and next to that is a massive commercial warehouse that is under construction. The building is so big that the trucks moving outside its towering concrete walls look like children's toys.

That 1.1-million-square-foot warehouse on Gilboa Street represents a significant piece of the economic future for this town of roughly 9,000 residents in southern Worcester County that borders Connecticut and Rhode Island.

Wojcik, the Douglas town administrator, said when construction is finished, the warehouse will generate 250 jobs and $1 million annually in tax revenue.

It also has some climate activists wondering why the state would approve the extension of an underground natural gas pipeline into Douglas to power the warehouse. That juice will also run another 650,000-square-foot warehouse — developed by Scannell Properties and called Blackstone Valley Logistics Center — that straddles Douglas, Sutton and Uxbridge.

It's a head-scratcher for activists, especially at a time when Massachusetts law is focused on reducing the state’s reliance on fossil fuels. Embedded in the law is achieving net zero carbon emissions statewide by 2050.

Debate extends beyond Douglas

When it comes to the debate about natural gas expansion in Massachusetts, the issue extends beyond the borders of Douglas. Some community groups are fighting an Eversource plan to build a new underground natural gas pipeline from Springfield to Longmeadow.

Last month, the state told Eversource to report back with a deeper dive into how the project would impact the health of surrounding communities. Eversource was also instructed to study the viability of non-fossil fuel sources.

Were Douglas residents kept in the dark?

Meanwhile, emails shared with the Telegram & Gazette and obtained through a public records request by the Energy and Policy Institute appear to show that Douglas, Eversource and warehouse developer CRG potentially conspired to keep the project out of the public eye so environmental groups wouldn't get wind of it and actively oppose it.

Sarah Krame, a Sierra Club attorney who testified before the state in a public hearing to express opposition to gas expansion into Douglas, noted that it “looks like behind the scenes Eversource tried to keep the public in the dark.”

Eversource disputed that claim, noting the process became public knowledge when the Douglas Board of Selectmen voted to support the project. That happened roughly 18 months before the state Department of Public Utilities greenlighted the expansion.

“Once the Board of Selectmen took its public vote on the project in May 2021, this project was a matter of public record,” said an Eversource email. “We reject the premise that any attempt was made to deter the public processes necessary for this critical project to receive full, transparent consideration.”

CRG declined a request for comment.

Douglas 'hit the skids'

To understand why Douglas officials said they needed natural gas and the CRG warehouse, look no further than economics.

As Wojcik tells it, Douglas “hit the skids” economically in 2017. The town didn’t have enough money in its local tax account to meet its expenses. Town mainstays like the library and senior center were potentially on the chopping block, and if it weren't for residents voting for a local tax override, those services could have been lopped off.

“The financial stress was really significant. The bottom line for municipalities is you have to grow or die,” said Wojcik.

Time to diversify

Like many small towns, Douglas was heavily reliant on residential property taxes. Wojcik estimated 96% of the town’s tax revenue came from the residential sector, so Douglas needed to grow its commercial tax base.

Douglas approached Eversource in August 2020 about extending the company’s existing gas line from Sutton and Uxbridge into Douglas because that power source could entice businesses to come to town. Talks were also underway with Chicago-based CRG to locate its behemoth warehouse in Douglas, and Wojcik noted that CRG said it needed natural gas to power the building.

If the state Department of Public Utilities approved Eversource's franchise permit application to supply natural gas in Douglas — Eversource already had permits in neighboring Sutton and Uxbridge — then Douglas officials believed they could lock up the warehouse project, attract future commercial projects and grow its tax revenue.

Douglas had a lot going for it to attract businesses, town officials believed. It had land, and a major north-south transportation roadway in Route 146 with direct access to some of New England’s main commercial hubs, including Worcester and Providence.

What it didn’t have was natural gas, and, Wojcik said, it put the town at a competitive disadvantage compared to other cities and towns with existing gas service.

Urgency set in

Douglas needed the state to approve the franchise permit and do it fast.

CRG, Douglas officials believed, wouldn’t wait around forever, and could easily put its warehouse in a community that already had natural gas service. Besides, it could take years and millions of dollars to upgrade the town's electrical system to handle full electrification, time that Wojcek said Douglas didn't have to lock in CRG.

More than two years after initial discussions with Eversource started on extending the pipeline, the state’s Department of Public Utilities approved the franchiser permit in December 2022.

The DPU noted that it considered many factors in its decision, including:

● There was support from Douglas, the legislative delegation and the attorney general's office.

● There was no impact on the reliability of service to existing natural gas customers.

● The increase in emissions was minimal, at 0.124%, and likely offset by the town and developer's commitment to pursue solar energy.

Massachusetts analyzed a total of 20 warehouse application filings since 2020 as part of the Massachusetts Environmental Policy Act. Of the total 14 million square feet that those filings represented, roughly 65% (9 million square feet) were partially or fully electrified.

Opposition and 'serious concerns'

Numerous individuals and organizations signed an opposition letter that was given to the DPU before it made its decision on Douglas.

“We have serious concerns about the impacts of this proposal and doubts about the supposed need for gas for the economic development projects in the Town of Douglas,” the letter reads.

Kim Barnard, a 30-year Douglas resident who signed the letter, recently told the T&G, “Why is there another gas line in Douglas? It doesn't seem the way of the world. We’re supposed to be moving away from fossil fuels.”

'Smoking guns'

Itai Vardi, research and communications manager at the Energy and Policy Institute, pointed to three primary “smoking guns” uncovered in the emails that pertain to the dealings involving Douglas, Eversource and CRG.

The first is that Eversource wasn’t a neutral participant, according to Vardi, but “worked hand in hand with the town and developer to quietly push this project.”

In an April 2021 email, Eversource executive David Allain, who no longer works for the company, told Robert Minarik, economic development project facilitator in Douglas, “We will likely hold off on DPU request until 60 days after construction begins; since we do not want to alert antigas activists.”

Wojcik noted the email had nothing to do with the CRG warehouse. What the correspondence refers to, said Wojcik, is the underground gas line work that connected to the Blackstone Valley Logistics Center in Sutton. That project was funded by a state grant, and when the work was done, Wojcik said, there was no underground work to extend the gas line into Douglas until the state Department of Public Utilities approved the franchise permit.

The second smoking gun, said Vardi, is that Eversource quietly crafted a resolution in support of gas extension into Douglas that the Board of Selectmen voted to support. In a December 2022 email from Minarik to Eversource, Minarik praised Eversource executives: “In a very short time, Frank (Giampa) and Mike (Manning) were responsible for obtaining a Resolution Letter from the Douglas Selectmen.”

That behind-the-scenes work, noted Vardi, sends up red flags.

“An investor-owned utility should not be working with elected officials to write essential government documents,” said Vardi.

'Nonsense' and standard practice

“That’s nonsense” was Wojcik’s reaction to the charge of Eversource having inappropriate influence over selectmen.

“I mean, we needed the Select Board to be supportive of the expansion into the town. And that's a standard part of the application process, because it's standard for a public utility, the state and anyone with business before the Select Board is free to suggest whatever language they think they need.

“It's up to the Select Board to review it and vote.”

Full electrification study was never done

The third piece of evidence that Vardi said showed a stacked deck in the pipeline approval process is that CRG never requested a study to determine if its warehouse could be powered fully by electricity instead of natural gas. Emails obtained by the Energy and Policy Institute indicate the state attorney general’s office asked Douglas to explore solar, geothermal and electricity to power the warehouse.

Those emails also show Eversource asked Douglas to contact National Grid to do a full electrification study, but it was never done. National Grid is the electricity supplier in Douglas.

A June 2022 email from CRG to Eversource said, “During our design development process, we considered the option of utilizing only electric as an ongoing operational fuel source. We have concluded however that a building of this size can not operate strictly on 100% electric energy.”

In a separate email in June 2022 from CRG to Minarik, CRG said, “We didn’t do the analysis.”

National Grid confirmed to the T&G that it never received a request from CRG to study the cost of full electrification, including heating. The utility did complete a study at CRG’s request for the cost of electrification with gas heating. CRG paid $50,000 for that study.

'Like a terrier with a bone'

When asked if Minarik and the town were overzealous in its pursuit of natural gas, Wojcik said he didn't think so and that Minarik was "like a terrier with a bone." He praised Minarik's zeal for putting the pieces together to get the state to approve the franchise permit that allowed the CRG warehouse to move forward.

Minarik's name is all over the emails obtained by the Energy and Policy Institute, and they show his dogged pursuit of the town's goal to obtain natural gas.

In a September 2022 email to CRG and Wojcik, Minarik displayed his commitment to the cause: "The whole idea, in a nutshell, is to directly PROVE WHY we need natural gas. This is our entire case before the DPU for the franchise permit. A casualty of war is obviously DISSPROVING (sic) full electrification, geothermal, or any other costly energy source alternative, extra costs that CRG/Clayco must bear, but not their competitors in adjacent towns."

'More than enough' power

Solar power to run the warehouse is what Wojcik said he wanted for the CRG warehouse. He noted that half of the building’s roof, roughly 20 acres in size, is enabled for solar panels. Meanwhile, Douglas owns 17 acres next to the warehouse that Wojcik said could be the perfect spot to install solar panels, creating a microgrid that Douglas would own.

Combining the rooftop solar and the microgrid would supply “more than enough” power to run the warehouse, according to Wojcik. When asked why this option wasn’t brought out into the open, including direct discussion with CRG, Wojcik said time was the issue.

It could take several years for National Grid or a private source to design and fund an electric substation to make the microgrid possible, and the town and CRG can’t wait that long, said Wojcik. The building has to be up and running to generate revenue for CRG and tax revenue for Douglas.

“Buildings of this size are highly dependent on market interest rates and projected rates of return,” said Wojcik. “So, five years from now (for a substation) is purely speculative.”

The big picture

Some environmental activists believe that the natural gas extension into Douglas is the latest example of why Massachusetts must change its current system of how it makes decisions on these types of projects. Instead of deliberating on each application, a broad approach should be developed that supports business development while promoting renewable, clean energy that protects the environment and public health.

A pending bill at the Statehouse calls for a moratorium on large gas infrastructure projects until at least 2026 that adversely affect the climate. Supporters of the bill, including the Sierra Club, feel it gives the state time to create a transition plan that moves away from natural gas.

Meanwhile, an online petition sponsored by Mass Power Forward calls on Gov. Maura Healey to put a halt on all gas system expansions until the state has a plan for a transition to a clean energy future. More than 6,000 signatures are on that petition.

“The Healey-Driscoll Administration believes that the state should engage in strategic, statewide planning decisions around gas distribution and building electrification, rather than project by project decision-making," said a prepared statement from the state Executive Office of Energy and Environmental Affairs. "The Governor has appointed DPU commissioners with a strong commitment to the clean energy transition and regulatory reform, including a review of gas system replacement and preparation of the electric grid.”

Utilities call for change

National Grid and Eversource said in separate emails that they support the state’s climate and clean energy goals. Business as usual won’t work, noted National Grid, and "will not get us where we need to be to enable the significant anticipated growth in electrification and renewables.”

Eversource is behind the state’s goal of net zero by 2050, and noted there’s a place for natural gas in the equation: “As we continue to undertake this unprecedented transition to a clean energy future as a state and a region, natural gas remains a needed fuel source that local economies currently rely on, and in situations like this, it is helping to reduce greenhouse gas emissions and is more affordable as it replaces higher emitting fuels like oil heating service that other local customers were using.”

Time to think outside the box

Vardi at the Energy and Policy Institute feels small towns like Douglas that didn't have natural gas are "ground zero" for clean energy innovation, including geothermal and full electricity to power future operations.

“We have to think outside the box. Everyone loses when we just replicate this kind of (natural gas) infrastructure. The science is clear on this. It’s beyond argument," he said.

Contact Henry Schwan at henry.schwan@telegram.com. Follow him on Twitter: @henrytelegram.