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As gas pipeline disappears, Northern Pass charges ahead

  • Kinder-Morgan has scrapped plans to put a natural gas pipeline across southern New Hampshire. DAVID BROOKS—Monitor staff



Monitor staff
Friday, April 22, 2016

Even as plans for a huge natural gas pipeline through southern New Hampshire went bust on Wednesday, there was no sign of giving up from that other controversial billion-dollar energy project you’ve been hearing about for years, Northern Pass.

Which isn’t entirely surprising, the state consumer advocate said.

“My sense is that they’re pretty far removed from each other,” said Donald Kreis, pointing not just to the very different energy sources for the two proposed projects but to their different business models.

Both the Northeast Energy Direct natural gas pipeline proposed by Kinder Morgan and the Northern Pass transmission line to carry hydropower from Quebec seek to profit by creating large-scale, always available supplies of electricity, known as baseload power, that could be sold into the New England grid.

Thus, in some sense they competed with each other, which means the departure of Kinder Morgan might be seen as good for Eversource and Hydro-Quebec, the joint owners of Northern Pass.

Indeed on Thursday, Northern Pass indicated it was charging ahead with its efforts to get approval from the state to build the 192-mile project. It said agreements have been reached with companies that would build the $1.6 billion transmission project, carrying electricity on DC power lines from the Canadian border to a new substation in Franklin, and then on AC lines to a Deerfield substation. Bow-based PAR Electrical Contractors was named as the project’s general contractor.

“(This) puts Northern Pass in a strong position to begin the construction phase as soon as all permits are secured,” Bill Quinlan, president of Eversource Operations in New Hampshire, said in a press release.

The release arrived in inboxes less than 24 hours after Houston-based Kinder Morgan threw in the towel on Northeast Energy Direct, its billion-dollar plan to build a pipeline through western Massachusetts and southern New Hampshire. The pipeline would have brought natural gas from Pennsylvania shale fields into New England, where it would be sold both for heating and electricity – and, opponents alleged, for export.

In its quarterly earnings call, Kinder Morgan said it was suspending all work on the $3 billion Northeast Energy Direct, mostly because it couldn’t get enough gas-fired power plants to sign long-term contracts for the natural gas.

Kreis, the state consumer advocate, pointed to this financing as the big difference between the two projects.

“Northern Pass is a participant-funded transmission project. It already has its big customer all lined up: Hydro-Quebec. It’s got that all locked down,” he said. “Taking what Kinder Morgan said at face value . . . (Northeast Energy Direct) failed because they couldn’t get enough customers.”

Kinder Morgan’s decision produced an immediate secondary effect in New Hampshire, as Liberty Utilities withdrew its petition to expand service territory around Keene, a plan based on having a supply of gas from the new pipeline.

“(Kinder Morgan) announced at maybe 4:55 , and by 6:10 I was getting email from Liberty Utility that they were withdrawing the franchise request,” Kreis said.

Similarly, the idea of building a gas-fired power plant near Vernon, Vt., home of the closed Vermont Yankee nuclear power plant, has also been scrapped.

Kries said the news from Kinder Morgan had more of an effect on another Eversource project: Access Northeast, a billion-dollar pipeline expansion alongside existing lines in eastern Massachusetts and Connecticut. This proposed line would be jointly owned by Eversource Energy, National Grid and Spectra Energy.

“This news is better for Access Northeast and sort of increases their fervor for getting their pipeline done,” he said.

(David Brooks can be reached at 369-3313, dbrooks@cmonitor.com or on Twitter @GraniteGeek)