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Utility leaders: We need natural gas pipeline to contain electricity prices

Last modified: 12/11/2014 1:07:11 AM
The leaders of three of New Hampshire’s four electric companies spoke with one voice yesterday at a seminar on the state’s energy future.

New England is on the wrong side of a bottleneck of natural gas supply, driving up prices this year and for the foreseeable future, they said.

“Here in New Hampshire and New England, we’re right on the front lines. Our rates are getting so far askew from competing territories where industries and people can go, you wonder how long the consumers and industries of New England can take it,” said Steve Kaminski, vice president of power resources and access for the New Hampshire Electric Co-op.

Nearly half of the region’s electricity is now generated by burning natural gas, compared with just 15 percent in 2000. But the pipeline capacity available to funnel the fuel from shale fields in Pennsylvania to New England doesn’t match the growing need. By 2037, 87 percent of New England’s energy capacity is expected to be fueled by natural gas, said Bob Scott of the Public Utilities Commission. In addition, four energy generators, including the Vermont Yankee nuclear plant, have been mothballed or are scheduled to go offline, further reducing the region’s energy supply, according to the Associated Press.

“A big part of the solution here is additional gas infrastructure into the region. It’s irrefutable,” said Bill Quinlan, president of PSNH, the state’s largest utility. “What’s driving the prices you’re seeing is that as a region, we’ve become hugely dependent on gas for home heating and (electricity) generation, and the infrastructure hasn’t been built to support that. You’re fundamentally looking at scarcity pricing.”

Mark Lambert, director of government affairs for Unitil, did not specifically address a natural gas pipeline in his remarks.

His company’s per-kilowatt-hour rate is poised to nearly double, increasing to 15.5 cents per kilowatt-hour from 8.4 cents.

Roughly two-thirds of a customer’s bill is the cost of fuel, while the remaining charges are for transmitting it, and taxes and programs to promote energy efficiency and help low-income residents afford heat, he said.

Liberty Utilities’s rate is also slated to jump to 15.5 cents per kilowatt-hour from 7.73 cents, and the co-op’s rates will increase to 11.6 cents per kilowatt-hour from 8.97 cents.

PSNH is scheduled to file a winter rate change next week. The rate will increase, but not as dramatically as the state’s other utilities, Quinlan said.

The seminar, hosted by the Business and Industry Association of New Hampshire in Manchester, featured presentations by Andrew Gillespie, principal analyst with ISO New England, and Thomas Kiley of the Northeast Gas Association, who outlined a long list of proposed pipeline extensions that could bring shale gas from western New York and Pennsylvania to New England.

“If you look at the reserves, it dwarfs the (energy in the) Gulf of Mexico,” said Daniel Saad, president of Liberty Utilities, the largest natural gas distributor in New Hampshire.

“It’s pretty simple. We’ve got renewables, we’ve got all kinds of solutions, but at the end of the day, if you want to knock these prices down, if you want to buffer them for the long term, a natural gas pipeline has got to come into the state,” he said.

This month, Kinder Morgan officially filed its proposal to run more than 70 miles of natural gas pipeline through 17 communities in the southern tier of New Hampshire.

Liberty recently announced an agreement to purchase enough gas from the pipeline to heat 65,000 residential homes on the coldest day of winter. Kinder Morgan plans to begin construction in 2017 and get the pipeline in service by 2018, but it first needs to get approval from the Federal Energy Regulatory Commission.

(Sarah Palermo can be reached at 369-3322 or spalermo@cmonitor.com or on Twitter @SPalermoNews.)


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