Dive Brief:
- Two National Grid electricity companies have asked the Massachusetts Department of Public Utilities (DPU) to approve 20-year contracts for gas capacity on pipelines being developed in the state. The companies say the net present value of customer benefits from the Northeast Energy Direct (NED) and Access Northeast pipelines amounts to nearly $11 billion, MassLive reports.
- The proposals follow regulators' decision in October to allow electric utilities to enter long-term contracts for gas supply, though they must meet certain requirements including being procured in a competitive and transparent process.
- National Grid said it analyzed scenarios where only one of the pipelines is approved, and found the NED would yield $1.4 billion in annual net benefits for New England electric customers, versus Access' $1.1 billion.
Dive Insight:
Building the two pipelines would cost a combined $8 billion, MassLive reports, but the benefits back to customers would more than make up for it.
"Selecting both pipelines has an expected net present value benefit of $10.9 billion for New England electric consumers. Approximately 46% of the benefits would accrue to consumers in Massachusetts," National Grid said in its filing for Massachusetts Electric Co. and Nantucket Electric Co.
The Access Northeast project is being developed by Spectra Energy, along with National Grid and Eversource Energy, and would expand natural gas access in New England by up to 1 Bcf/d. Project backers say that it will save electric customers an average of $1 billion a year during normal weather conditions. The Northeast Energy Direct project could save the region more than $2 billion each year, developers of that project claimed.
Opponents of the projects say more gas is not the answer, however, and the deals "put ratepayers on the hook for billions," Kathryn Eiseman, president of Pipe Line Awareness Network, told MassLive.
Last year, Massachusetts Attorney General Maura Healey (D) released a study that questioned the need for more natural gas pipeline capacity in New England, finding additional investment in demand response and efficiency is the cheapest and cleanest option to meet power demand.
