Short supplies of natural gas tied to limited pipeline capacity have already led to spiraling winter electricity prices across Massachusetts.
Now the same shortages may force some gas companies in Western Massachusetts to turn away new heating fuel customers and restrict how much additional natural gas existing commercial customers can use if they expand operations.
Berkshire Gas Co., which has 38,000 customers in Western Massachusetts, has announced that this December, and perhaps sooner, it will stop signing up new residential and commercial customers in the Greenfield area because the utility is reaching its capacity to deliver enough gas through existing pipelines. The moratorium will apply to existing commercial and industrial customers that want to expand operations and use additional gas, said Chris Farrell, the Berkshire Gas spokesman.
A similar moratorium will probably be extended by the middle of next year to Hampshire County, home of the University of Massachusetts Amherst, Farrell said.
“We’ve just hit our capacity. That’s it,” said Farrell of pipeline constraints. “This has become a real challenge for us.”
Meanwhile, Columbia Gas of Massachusetts, which has more than 300,000 gas customers across the state, said it will probably have to slap a similar moratorium on new gas customers in its Western Massachusetts areas, either next year or in 2016, also due to pipeline capacity concerns.
Holyoke Gas & Electric, a municipally owned utility with 12,000 gas customers, appears to be in slightly better shape and still has enough capacity to sign up new residential customers, said general manager Jim Lavelle. But if major commercial users want to locate new operations in Holyoke, the utility “may have to turn them away” unless it finds a way to secure the necessary gas, he said.
All three utilities get natural gas via a “lateral” pipeline, or branch, extending from the Tennessee Gas Pipeline running along Southern Massachusetts.
The owner of the Tennessee Gas Pipeline, Kinder Morgan Energy Partners LP, has proposed constructing a controversial new pipeline stretching across the northern part of the state from Richmond in Western Massachusetts to Dracut, a move that would allow utilities along the way to tap into new supplies of natural gas. Both Berkshire Gas and Columbia Gas have said they would buy gas from that pipeline, if it is ever built.
Kinder Morgan’s proposed pipeline has run into intense opposition in the more than 40 communities it might cross. The multibillion-dollar project still needs approval from the Federal Energy Regulatory Commission.
“We should be getting off natural gas, not increasing our reliance on it,” said Jane Winn, executive director of the Berkshire Environmental Action Team, which opposes the pipeline. Additional conservation measures can reduce demand for both natural gas and electricity, Winn said.
The pipeline capacity problem facing Western Massachusetts utilities is the latest chapter in an unfolding energy, economic, and environmental saga tied to the growing demand for natural gas, most of it flowing in abundance from Pennsylvania shale fields and elsewhere.
The combination of pipeline constraints and stronger demand, both from homeowners making oil-to-gas conversions and power plants that increasingly rely on natural gas to generate electricity, has led to extremely tight gas supplies and higher prices, particularly during winter months when demand for gas is highest.
Last winter, wholesale electric prices skyrocketed across the New England due to tight natural-gas supplies, and last month National Grid said its upcoming winter electricity rates would jump by a 37 percent. Northeast Utilities, the parent company of NStar and Western Massachusetts Electric Co., has indicated its winter rates will also rise dramatically.
Both National Grid and Northeast Utilities, the state’s two largest gas suppliers, said supply woes haven’t reached the point where they would have to impose widespread moratoriums on signing up new customers. But the two utilities have nevertheless proposed a number of new transmission line and gas pipeline upgrades and projects aimed at increasing the flow of natural gas and electricity in the region.