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Study recommends new gas pipeline for New England, but markets are seen as impediment

From the September 23, 2013 issue of Public Power Daily

Originally published September 23, 2013

"A combination of short-term (2014-2016) and long-term (2017 and later) solutions are necessary to address natural gas infrastructure deficiencies that place future reliability of electric-power generation at risk in New England," according to a new report by Black & Veatch for the New England States Committee on Electricity (NESCOE). The most cost-effective long-term solution would be to build a cross-regional natural gas pipeline, which would cost an estimated $2.1 billion and go into service in 2017, the study concluded.

However, the current rules of the ISO New England electricity markets pose a problem, NESCOE said. "To date, the electricity markets have not provided incentives that have resulted in investment in new natural gas infrastructure or in alternative solutions to achieve comparable ends. The natural gas pipeline industry generally requires long-term commitments for new infrastructure development, which may not be achievable under the current competitive electricity market rules."

In the absence of new infrastructure and short-term action (demand reduction, energy efficiency, liquefied natural gas imports and distributed generation), "New England will experience capacity constraints that will result in high natural gas and electric prices." The only scenario where no long-term infrastructure solutions are necessary would be if both natural gas and electricity demand were to remain flat from 2014-2029, the study said.

The study is posted on NESCOE’s website.



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