Business & Tech

Prolonged cold snap upends region’s energy market

After being cast aside for cleaner energy sources, much-maligned oil is back in high demand as the region grapples with an extended blast of frigid air.

Homeowners who use heating oil but don’t have regular deliveries scheduled are scrambling to get someone on the phone just to take their orders. Dealers say customers without contracts might have to wait several days or even a week to get their tanks refilled.

“We can’t keep up with the phone calls,” said Laura Bicknell Carbone, vice president of Alvin Hollis in Weymouth. “We’re getting probably 100 every five minutes.”

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No one expects an oil shortage yet, as long as the barges that bring the fuel to Boston can still navigate the icy waters of Massachusetts Bay. But prices are higher than they were last year, and the prolonged cold snap already has caused headaches for the energy industry.

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Power plants were using oil to generate more than a third of the region’s electricity Friday, according to grid operator ISO New England, compared with near zero normally. That’s because heating customers get priority for natural gas — the primary fuel source for the electric grid for much of the year — coming by pipeline into New England on cold days.

The increased use of oil has some power plant operators concerned they will reach state-imposed emissions limits. And some experts are predicting higher electricity prices down the road.

“We’re at the point where things are fragile,” said Anthony Buxton, a Portland, Maine-based lawyer who represents paper mills and other big industrial users of electricity. “People in their homes are using oil at a much faster rate than they realized. . . . And we’re not supposed to be relying on oil [for electricity], day after day, in New England.”

John Alefantis delivered heating oil in Boston for Cubby Oil.
David L. Ryan/Globe Staff/File
John Alefantis delivered heating oil in Boston for Cubby Oil.

The power network was dealt an additional challenge Thursday when the Pilgrim nuclear power plant went offline. ISO New England said there is enough electricity to supply the grid this weekend so long as no other large plant goes out.

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The use of oil to heat homes has been in steady decline in Massachusetts, falling to about 28 percent today, from 35 percent in 2010 and 39 percent in 2000.

But it’s still essential for many people. Alvin Hollis had 14 trucks on the road during Thursday’s storm dealing with customer emergencies — from oil tank refills to frozen pipes. Customers without service contracts were told there is a two-day wait list.

“We’re trying to encourage them to get 5-gallon cans of diesel to get them through because we can’t get to them,” Carbone said.

Elizabeth Del Guidice of Plymouth said in an e-mail that she had to get diesel at a gas station last week to tide her over until a heating oil company could make a delivery Thursday.

Del Guidice said she “called everywhere and no one could fit us in.” She said her elderly parents in Medfield faced a similar problem: They were waiting for oil Thursday evening and resorted to using electric heaters.

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In response to the high demand, the Massachusetts propane and heating fuel industry received an emergency waiver of federal restrictions on the number of hours delivery drivers can be on the road until Jan. 9, said Michael Ferrante, president of the Massachusetts Energy Marketers Association trade group. He added there is no concern about running out of heating oil in the region.

Calls for heating fuel assistance tripled Wednesday at Action for Boston Community Development, a nonprofit that serves low-income residents, chief executive John J. Drew said.

Already, about 5,000 of the 24,000 households that receive federal fuel assistance through ABCD have hit the limits of their benefits, an average of $1,100 per household, per winter, Drew said.

“It’s going to be a crisis this winter,” Drew said.

State congressional leaders called on the US Department of Health & Human Services to release the rest of its Low Income Home Energy Assistance Program funds available in this fiscal year, totaling some $340 million. They stated that people heating with oil will probably have to pay 21 percent more this winter, while families using natural gas are expected to pay approximately 10 percent more than last year.

Meanwhile, Matthew Beaton, the Baker administration’s energy and environmental affairs secretary, said the agencies that he oversees have been in close contact with power plant operators and are not yet concerned about the grid’s reliability. He said the administration would temporarily waive any emissions limits if they interfere with providing enough power to keep the lights on.

“Nobody is really sweating running out of oil at the moment,” Beaton said. “But you never know. We’re still in the first week of January. We’ve got a long winter ahead.”

The intense demand for natural gas is reviving the debate over whether New England needs more pipeline capacity. “Customers are going to see higher prices because they’re consuming so much energy,” said Tom Kiley, president of the Northeast Gas Association.

Environmentalists downplay the need, saying that multibillion-dollar pipeline expansions are an expensive fix to a problem that pops up during a short period every year.

“You don’t make a massive over-investment to correct for a couple days of pain and suffering,” said Craig Altemose, executive director of the Better Future Project.

Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.