The need for increased natural gas pipeline infrastructure in New England is one of the most pressing energy issues facing the region, whose increasing reliance on the fuel has led to steep spikes in the price of power for residents and businesses in several states this winter, said officials from Maine, Connecticut and Massachusetts who participated in an energy conference last Friday.
In Maine, where energy-intensive, natural-resource-based manufacturing industries play a key role in the economy, some companies temporarily shut down in response to high winter natural gas prices. In other cases, mills ceased operations, citing high energy costs, said Mark Vannoy, Chairman of the Maine Public Service Commission, speaking at the New England Electricity Restructuring Roundtable in Boston, organized by Raab Associates and streamed live over the Internet.
“The decisions have devastating effects on small towns,” Vannoy said. “It’s a top priority of Maine to solve the natural gas pipeline infrastructure problem.”
The portion of the region’s power mix produced by natural gas has grown substantially over the last fifteen years, from 15 percent in 2000 to 50 percent today, as generators shifted from higher-priced oil and coal thanks to abundant, initially very cheap supplies flowing from the nearby Marcellus Shale.
In Connecticut this winter, electric utility Connecticut Light and Power raised electricity rates for its customers an average of 26 percent, and United Illuminating hiked its rates by an average 54 percent because bottlenecks in the distribution system led to spikes in the price of natural gas, said Katie Dykes, Deputy Commissioner for Energy at the Connecticut Department of Energy and Environmental Protection. “As we’re looking at the performance of the power sector this winter, we continue to see a need for the states to take proactive action to face infrastructure constraints,” she told the conference.
Despite the economic challenges associated with distribution limitations, there have been considerable environmental benefits from the shift to lower-carbon natural gas from oil and coal across the region. In Connecticut, between 2007 and 2012, air pollution produced by the electricity sector dropped substantially. Emissions of nitrogen oxides and sulfur dioxide — key components of smog and acid rain — fell 71 percent and 95 percent, respectively, and emissions of carbon dioxide slid 28 percent, according to the draft 2014 Integrated Resource Plan for Connecticut, released last December for public comment.
Officials are looking at a variety of options to address the infrastructure constraints, said Dykes, including building out natural gas capacity, procuring more clean energy and ramping up measures to reduce demand for electricity.
The Connecticut legislature is scheduled to hold hearings today on a number of energy-related bills, including one that would enable distribution companies to pass along to ratepayers the costs associated with expanding natural gas transmission lines, according to The New Haven Register.
In recent years, other New England states have considered a number of measures to tackle natural gas infrastructure challenges.
In Maine last year, the legislature passed a sweeping measure that, among other things, would under certain circumstances enable the Public Utilities Commission to write a bill that would require electricity customers to pay for regional gas pipeline infrastructure, former PUC Commissioner Tom Welch explained in an interview with Mainebiz.com last January.
In Massachusetts, the administration of Gov. Charlie Baker has directed the Department of Energy Resources to file a request with the Department of Public Utilities to consider options for natural gas capacity expansion. The DPU will consider how the electric utilities can pursue gas capacity contracts under existing law that would improve winter reliability and lower winter electricity costs.
In addition, last month Massachusetts, Connecticut and Rhode Island announced a coordinated process to issue a request for proposal for clean energy resources.
— By Rona Cohen