trending Market Intelligence /marketintelligence/en/news-insights/trending/unr-WYkbqZ5-OEMgH00HEQ2 content esgSubNav
In This List

New England gas LDCs disappointed with NED collapse, still plan expansions


Despite turmoil, project finance remains keen on offshore wind

Case Study

An Energy Company Assesses Datacenter Demand for Renewable Energy


Japan M&A By the Numbers: Q4 2023


See the Big Picture: Energy Transition in 2024

New England gas LDCs disappointed with NED collapse, still plan expansions

LDCcustomers of the suspended Northeast Energy Direct natural gas pipelineproject said they are working with Kinder Morgan Inc. and other pipeline developers in NewEngland to replace gas transportation capacity they thought they had secured.

SheilaDoiron, director of communications and community relations for Columbia Gas ofMassachusetts, a NiSourceInc. company, said the utility was disappointed to learn theproject had come to a halt after working with Kinder Morgan's for threeyears.

"Thelack of adequate pipeline capacity is a primary reason for the in NewEngland," Doiron said in an interview. "So it's going to have aneffect, and one of the effects will be on pricing for our customers."

"ColumbiaGas of Massachusetts has a fundamental obligation to provide safe, reliable,affordable natural gas to our customers," she said. "To address thatobligation, we considered the NED project to be a game changer. Our customerswould have realized the price benefits of NED's ability to directly accesscompetitively priced Marcellus supplies. That would have enabled us to be lessreliant on supplies subject to the New England basis pricing."

Pricingwas not going to be the only benefit, Doiron said. Northeast Energy Directwould have provided Columbia Gas with operational benefits related tolarge-volume, high-pressure supply delivered to Dracut, Mass.

Theutility is reviewing alternatives with all the New England pipelines, includingSpectra Energy Corp,Portland Natural Gas TransmissionSystem LP and Millennium Pipeline Co. LLC, and it is even looking atLNG imports.

"Rightnow, all options are back on the table," Doiron said.

Kinder Morgan said shippers had collectively agreed to moveapproximately 500,000 Dth/d of incremental gas supplies from the MarcellusShale to New England on the project. The pipeline would have consisted of anapproximately 167-mile supply path and about 177 miles of market path, plusabout 73 miles of delivery laterals and loop segments.

A search for other solutions

electricutilities Massachusetts ElectricCo. and NantucketElectric Co. had asked the Massachusetts Department of PublicUtilities to approve 20-year gas transportation contracts on Northeast EnergyDirect. National Grid is a partner with Spectra Energy Corp and on another NewEngland gas transportation project, Access Northeast.

LikeColumbia Gas, National Grid companies are scrambling to find alternatives toNortheast Energy Direct. That project's failure, National Grid spokesman DavidGraves said, places more importance on Access Northeast.

"Theproposed Northeast Energy Direct pipeline project has been an important part ofNational Grid's strategy to serve growing demand from residential andcommercial natural gas customers in the region (Massachusetts and RhodeIsland)," Graves wrote in an email.

"Additionally,the project was part of a two-pipeline solution intended to provide additionalgas delivery capacity into the region for electricity generators, to stabilizeelectricity supply prices for our customers," Graves said. "Thatsaid, Spectra's proposed Access Northeast project becomes increasingly criticalfor the region. National Grid is assessing the best path forward with respectto the pending filings with the Massachusetts DPU and will continue our effortsto address electricity market reliability concerns and lower electricity supplyprices in the region for our customers."

In2015, the New Hampshire Public Utilities Commission approved 's contract withthe Tennessee Gas to purchase capacity on Northeast Energy Direct to serve customersin New Hampshire. The contract would have allowed the continued growth of thecompany's gas distribution system and "would have also lowered energyprices for all customers," said John Shore, Liberty Utilities'communications and media relations manager.

"Regardlessof the future of the NED pipeline," Shore said, "our customers stillneed additional capacity to allow for future growth. We will be evaluating allavailable options going forward to ensure that New Hampshire's residents andbusinesses can continue to access natural gas for their heating and industrialneeds. We will be evaluating all future growth opportunities based on theresources and options available to us."

TheLDCs were exchanging information with Kinder Morgan on the future of NortheastEnergy Direct. In its announcement on the project, Kinder Morgan said it wassuspending development, which suggests a slim possibility that the projectcould return later. At least one opposition group was taking that seriously.

Ina May 2 letter, the Pipe Line Awareness Network for the Northeast, or PLAN,asked FERC to dismiss with prejudice the Tennessee Gas application for theNortheast Energy Direct project and to immediately terminate the proceeding. Inthe request, the group told FERC that National Grid and Liberty Utilities hadwithdrawn petitions for state approvals of transportation contracts on thesuspended pipeline project. (CP16-21)