Earlier this fall, energy pipeline operators announced plans to boost the energy supply across New England, reports the Boston Globe. This region has not added any new gas pipeline capacity for the past two decades, which has created supply issues and temporarily boosted wholesale prices for gas and electricity during extreme winter temperatures.
Availability of natural gas is a significant driver in the cost and production of electricity. In fact, at one point during a cold spell last winter, wholesale electricity prices jumped up to $1,290 per megawatt hour, which is more than 35 times the yearlong average of $36 per megawatt hour!
Increasing the energy supply could help alleviate these dramatic spikes in cost, and ultimately help energy residential customers across New England lower their energy bills. One potential project called Access Northeast would impact the Algonquin pipeline, which runs from New Jersey to Everett, and the Maritimes & Northeast line, which carries liquefied natural gas pumped from ships off the coast of Eastern Canada.
Officials at Spectra and Northeast Utilities, the companies proposing the expansion, say the project would be finished in 2018, assuming the Federal Energy Regulatory Commission (FERC) gives its approval (the companies have not yet filed a formal proposal with FERC, but say they plan to do so next year). The two companies plan to invest $3 billion into the project, delivering an additional 1 billion cubic feet of gas per day into New England. That is enough to supply over 3 million homes. Spectra has already proposed a 14 percent expansion of the Algonquin pipeline, a project that, if approved, would likely be completed during the winter of 2016-2017. The new Access Northeast project would complement that expansion.
Energy customers would help recover the project costs of Access Northeast over the first year after the project’s completion, but increasing access to affordable natural gas would likely result in lower energy bills over the long term. Fracking in Pennsylvania and other areas has helped lower the cost of natural gas in other parts of the country, but without increased pipeline capacity, New England customers have not benefited from those cost savings.
The other pipeline expansion proposal involves building a pipeline to supply gas from Pennsylvania across New York and Western Massachusetts. Kinder Morgan Energy Partners LP, the energy company behind that proposal, plans to solicit public input later this year and file a pipeline application next fall.