Tennessee Gas Pipeline Co. files natural gas capacity proposal

Kinder Morgan’s Tennessee Gas Pipeline Company (TGP) has filed a proposal with the Maine Public Utilities Commission offering the State of Maine a long-term contract for natural gas pipeline capacity with the goal of lowering overall energy costs for Maine consumers.

“We are thrilled to be able to offer the State of Maine a contract for capacity on TGP’s proposed Northeast Energy Direct Project that will bring needed natural gas to New England and support both gas and electric reliability. We hope our proposal will help the Commission obtain the greatest possible benefit for Maine from the ongoing Commission proceeding,” said Kimberly S. Watson, President of East Region Natural Gas Pipelines for Kinder Morgan. “We believe this is an historic opportunity for Maine, and we at Kinder Morgan admire the combined efforts of the governor, legislature and others to try to lower the overall energy costs to Maine families and businesses. As a company that has served markets in New England safely and reliably for many decades, TGP is delighted to have the opportunity to help Maine and its consumers achieve their goals.”

TGP previously announced an agreement with multiple local gas distribution companies across New England for approximately 500 000 dkth/d of capacity (500 million ft³/d) on TGP’s Northeast Energy Direct project for the needs of those particular companies. Negotiations continue with other potential customers and shippers.

The Maine Public Utilities Commission has authority to execute an Energy Cost Reduction Contract under the Maine Energy Cost Reduction Act, which authorises the Maine PUC to purchase up to 200 million ft³/d of pipeline capacity for up to 20 years, subject to satisfying certain conditions. TGP’s proposal is being filed in response to a proceeding the Commission opened in March 2014 to implement its authority. During the proceeding, the Commission has encouraged the filing of gas pipeline capacity proposals at any time in the proceeding to assist in the refinement of the Commission’s analyses.

“We have offered Maine a set of agreements, quite standard in our industry, that provide for flexibility and, importantly, the avoidance of any costs to Maine before the pipeline is in operation and the benefits for Maine may be realized,” continued Watson. “Recent testimony and studies before the Maine Public Utilities Commission shows that the savings of Maine electricity consumers would exceed the annual cost to Maine of the purchase of pipeline capacity.”

Analyses by ISO-New England, the regional grid operator, have shown that New England energy consumers are paying huge premiums for gas and electricity because of a lack of incremental natural gas pipeline capacity into New England from the south. Last winter, for example, New Englanders spent approximately US$ 3 billion more for electricity than they would have if sufficient pipeline capacity had been available."Our project is scalable,” said Watson, "up to 2.2 billion ft³/d of gas, an amount that would virtually eliminate the shortages that make gas and electricity so expensive in New England in the winter. With this project fully developed, Maine and New England would pay gas and electricity costs roughly similar to most of the rest of the nation.

“Although a regional effort among the six New England governors to arrange for large regional purchases of gas pipeline capacity has stalled, this contract, which benefits the state of Maine, will fit seamlessly with the commendable regional effort of the governors. We hope that effort continues," said Watson. “We all continue to work so that New England can be certain of competitively priced and reliable electricity in the winters of the future. The Northeast Energy Direct Project seeks to accomplish that.”

“We’ve been pleased by the acceptance of our initiative by customers and shippers and the public, whose budgets are strained by cold winters,” Watson added. “As an example, a recent poll by the Boston Globe indicated that a majority of Massachusetts’ citizens (52%) said they favour expansion of a natural gas pipeline in Massachusetts from western Massachusetts to Dracut. Their responses show that ratepayers in New England recognise the importance of lower energy costs and cleaner air.”

Adapted from press release by Rosalie Starling

Read the article online at: https://www.worldpipelines.com/business-news/18092014/tennessee-gas-pipeline-co-files-natural-gas-capacity-proposal-506/