New England electricity customers could save more than $1.5 billion a year — $120 million for those in Maine — if natural gas prices in the region could be brought closer to what other parts of the Northeast are paying, a new state study has found.

“A Review of Natural Gas Capacity Options” was commissioned after a sweeping energy bill passed last year. It directed the Maine Public Utilities Commission to evaluate the costs and benefits of additional natural gas pipeline capacity into New England.

The report was released Monday by the Governor’s Energy Office, the PUC and the Office of Public Advocate. It describes the dramatic impact that New England’s inadequate pipeline capacity has on electricity prices, and the savings possible if the “basis differential” could be reduced by 75 percent.

The basis differential is the price difference between wholesale gas prices near the Marcellus shale deposits in Pennsylvania, where gas is produced, and the gas delivered by pipeline to New England.

The study reflects concerns that prompted a regional initiative announced by the New England governors in December to expand the region’s gas pipeline capacity. Some environmental groups, however, have questioned whether the region is best served by becoming more dependent on natural gas. They advocate diversifying electric generation with renewable sources, such as wind power.

The study’s release is timely in light of the extraordinarily high prices for natural gas delivered to New England this winter — prices that continue to drive high electricity costs throughout the region, Patrick Woodcock, director of the Governor’s Energy Office, said in a news release Monday.

“This report highlights the imperative to move forward with basic infrastructure to access the domestic and world-class natural gas supplies in our backyard,” Woodcock said. “It is critical that we cost-effectively manage New England’s reliance on natural gas by expanding our infrastructure to improve our employers’ competitiveness, reduce the use of petroleum for electricity generation, and finally lower Mainers’ electric bills.”

The report may be found on the Maine PUC’s home page.

Tux Turkel can be contacted at 791-6462 or at:tturkel@pressherald.com


Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.