Last modified: 2/19/2015 7:46:34 PM
Three of the biggest energy companies operating in New England are teaming up to propose a plan that they say would lower regional electricity costs by charging ratepayers to help expand natural gas pipelines.
Eversource Energy – formerly Northeast Utilities – Spectra Energy and National Grid are planning to expand existing natural gas pipelines that run through Connecticut, Rhode Island, Massachusetts, New Hampshire and Maine. One pipeline, known as Maritimes and Northeast, passes along the New Hampshire Seacoast through seven communities including Greenland, Newington, Exeter, Portsmouth and Stratham.
The $3 billion pipeline expansion project, called Access Northeast, would funnel an additional 1 billion cubic feet of natural gas per day into the region, which officials say will increase supply to power plants and help lower electricity rates. It is expected to be in service by 2018.
“The need for the project is unequivocal,” said Lee Olivier, executive vice president of Eversource Energy, during a conference call yesterday.
Eversource Energy and Houston-based Spectra Energy released the plan last fall. National Grid announced yesterday that it signed on to the project. Together, Eversource Energy and National Grid represent 70 percent of electric customers in New England.
Access Northeast is one of several plans seeking to increase natural gas capacity in New England. A separate plan from developer Kinder Morgan would run a new natural gas pipeline into New England. That route, known as Northeast Energy Direct, would pass through 17 communities in southern New Hampshire.
The Access Northeast plan is unique because the companies plan to market the pipeline not just to distributors that sell natural gas as heating fuel, but also to electric utilities like Eversource Energy in New Hampshire, formerly Public Service of New Hampshire, which would sell the natural gas to power plants. It would need the sign-off from energy regulators.
The plan would lessen spikes in electricity prices that the region has experienced the last few years by ensuring natural gas is available to generators in the wintertime, when the fuel is in high demand, officials said.
The cost to purchase pipeline capacity would be passed onto electric ratepayers. But officials said the savings would outweigh the costs and they expect customers would see a net reduction in their bills.
“Once Access Northeast is operational, it is projected to save customers on an average year about $1 billion a year across our region,” Olivier said.
The plan mimics an initiative launched by the six New England governors last year that sought to subsidize new pipeline infrastructure through a tariff on all regional ratepayers. The plan stalled this summer and has yet to be revived. In the meantime, several individual states are entertaining legislation that would push a similar plan forward without multistate sign-off.
While the Spectra, National Grid and Eversource Energy proposal was built upon the governors’ initiative, it will continue forward without the regional plan, officials said.
What is still unclear is whether all of the regional electric companies will sign on to the Access Northeast proposal or whether a few groups will subsidize infrastructure development that could benefit everyone in the New England power grid.
The companies envision that all of the utilities in the region will ultimately sign on to ensure their customers benefit, said Eversource Energy spokesman Martin Murray.
“Without widespread participation by the (electric distribution companies), there is the risk that the project does not go forward and that customers do not realize these benefits,” he said.
Access Northeast began taking orders yesterday from local gas distribution companies, and power generators, among others, who want to sign onto the project.
(Allie Morris can be reached at 369-3307 or at amorris@cmonitor.com.)