N.H. Public Utilities Commission staff says the proposed Kinder Morgan Northeast Energy Direct pipeline would be the best way for New Hampshire’s electric distribution companies to drive down electricity costs.
In a 48-page advisory report released Wednesday, state regulators named the pipeline above several other options for handling high winter electricity prices and market volatility.
The report also said electricity distribution companies could legally buy space on a natural gas pipeline, something that Eversource Energy has proposed doing.
High electricity prices last winter prompted the three-member commission to ask its staff to complete the report, PUC General Counsel F. Anne Ross said Wednesday.
In addition to the Kinder Morgan proposal, the authors also analyzed Access Northeast — the pipeline project proposed by Eversource — and a proposal from the Portland Natural Gas Transmission System. Both the Eversource and Portland plans would extend existing pipelines.
“In brief, we view Access Northeast and Northeast Energy Direct (NED) as two very cost-effective projects that will moderate future winter electricity prices,” the report says. But, “the numbers clearly indicate that NED will provide the greatest benefits to regional electricity customers.”
The NED pipeline would run through part of southern New Hampshire, including the local towns of Fizwilliam, Richmond, Rindge, Troy and Winchester.
The commission doesn’t have the final word on the NED pipeline — Kinder Morgan needs approval from the Federal Energy Regulatory Commission before it can go forward.
Eversource is part of the deal with Houston-based Spectra Energy to build the Access Northeast pipeline project, which they say could lead to a more than 20 percent increase in natural gas supply to New England.
The deal still hinges on the question of whether an electric utility could legally buy space on a natural gas pipeline. Eversource has proposed buying space on a pipeline and selling it to power plants, a process that has not been tried before.
The PUC staff report indicated that any electric utility could do this, as long as the deal lowers the cost to electricity customers.
The staff’s conclusion that the NED project would benefit New England comes as residents along the pipeline’s proposed path continue to debate the project’s safety and if it would actually bring energy costs down.
One opinion submitted to the PUC from the New Hampshire Pipeline Awareness Network suggests using liquefied natural gas, instead of a pipeline, to address high energy costs in the winter.
Storing liquefied natural gas would be cheaper, and it would be easier to adapt supply to fluctuating demands during the winter.
That proposal, PUC staff said in the report, was based on “seriously flawed” calculations.
PUC staff did not give much consideration to a pipeline proposal from Portland Natural Gas, which they said did not provide enough information.
The PUC staff report homed in on the NED pipeline, which would be built by Kinder Morgan subsidiary Tennessee Gas Pipeline.
“Tennessee Gas Pipeline’s NED project will deliver up to (1.3 billion cubic feet per day) of firm gas supplies from Wright, New York, to several existing New England pipelines in the vicinity of Dracut, Massachusetts,” the report said. “TGP will have the ability to physically deliver into every pipeline system serving New England as well as to incrementally serve markets along its own pipeline system.”
The report cited studies done by ICF International, a Virginia-based consulting firm.
That firm has done almost identical reports for Kinder Morgan and Access Northeast, according to Kathryn R. Eiseman, the president of the nonprofit anti-pipeline organization Pipeline Awareness Network for the Northeast (PLAN).
And she said, those reports show that a pipeline would only help costs in the winter, whereas a pipeline puts safety at risk all year long.
“The electricity price spikes the PUC seeks to address are strictly a winter phenomenon,” Eiseman said Wednesday. “We do not need a year-round pipeline solution, and all the societal costs that come with it, to address a winter-peaking problem.”
“Increased (liquefied natural gas) storage, gas and electric market reforms, and other targeted solutions, are less risky and less costly for ratepayers, landowners and the environment.”
The report also affirms that it would be legal for the state’s electrical distribution companies to enter into contracts directly with pipeline companies.
There are four electrical distribution companies in the state: Eversource Energy, Liberty Utilities, Unitil Energy Systems, Inc. and the New Hampshire Electric Cooperative, Inc.
Each serves an exclusive territory in the state.
Liberty Utilities is awaiting PUC approval of a separate deal that would allow it to purchase gas from the Northeast Direct pipeline to serve its natural gas heating customers, including expanding to the Keene area.