Politics

December 20, 2012

Bold idea aims to slash Maine's power bills

Under a legislator's plan, as much as $170 million a year could be saved by buying natural gas from out of state.

By Tux Turkel tturkel@pressherald.com
Staff Writer

(Continued from page 1)

click image to enlarge

In this June 25, 2012 file photo, a crew works on a drilling rig at a well site for shale based natural gas in Zelienople, Pa. Under a Maine legislator's plan, residents could save as much as $170 million a year by buying natural gas from out of state.

AP

Rep. Kenneth Fredette, R-Newport

Contributed photo

Pipeline companies are scrambling to move more of the low-cost gas from the Utica and Marcellus fields into New England.

One venture will boost capacity on the Tennessee Gas Pipeline in New York and New Jersey, with plans to extend into New England. Another, due for completion in 2016, will increase capacity on the Algonquin Gas Transmission pipeline through Connecticut and Massachusetts.

Unfortunately for Maine, no pipeline extensions are planned to continue past the Boston area.

That’s where state government can play a role, said Tom Welch, the Maine PUC’s chairman. Under Fredette’s proposal, the PUC would have a say in approving or denying project investments.

“Pipelines that end in Dracut, Mass., don’t physically bring gas into Maine,” Welch said.

Welch, who also spoke to the Industrial Energy Consumer Group last week, said that even if pipeline companies follow through on expansion projects in New England, Maine may need to take steps to ensure that it gets additional volume.

Firm commitments for gas in Maine could convince pipeline owners to increase compression, for more capacity. They could also build a pumping station to reverse the flow of gas along two pipelines from Canada that now pump gas south through Maine to Massachusetts.

Another idea, Welch said, is to join with other New England states to make firm commitments for buying enough gas to finance pipeline expansions.

“This could be a once-in-a-generation opportunity,” he said in an interview. “It makes sense to make sure we have all the tools we need to get the benefits, whether we use those tools or not.”

Maine has a longstanding interest in expanding the availability of natural gas, which is a cleaner alternative to heating oil. Until the 1990s, Maine was literally at the end of the nation’s natural gas pipeline.

That changed after two lines were built through the state from Canada. One of them, the Maritimes & Northeast Pipeline, has linked Maine with the Sable Island gas fields off Nova Scotia, and to a liquefied-natural-gas terminal in New Brunswick.

But production is declining at Sable Island, and the low cost of domestic natural gas has cut LNG imports in New Brunswick. A new field off Newfoundland – Deep Panuke – is expected to bring more gas onto the Maritimes line, but not at the high volumes or low prices that are available from the Marcellus field.

It’s too soon to say how pipeline companies may respond to Fredette’s proposal, but James Grasso, president of Grasso Associates in Needham, Mass., said the approach Maine chooses for financing the venture will be important. He agreed that arrangements putting ratepayers at risk would likely be a hard sell.

“But it’s a very novel approach and a good idea,” said Grasso, a longtime consultant who has worked in the region’s gas industry. “I think Maine would be ahead of its time. I’m not aware of other states using these kind of incentives.”

Staff Writer Tux Turkel can be contacted at 791-6462 or at:

tturkel@pressherald.com

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