National Grid joins bid to expand pipelines
National Grid has joined the Access Northeast pipeline project, a $3 billion expansion meant to increase the supply of natural gas to New England’s power plants.
Eversource Energy, the gas-and-electric company formerly known as NStar and Northeast Utilities, and the Houston-based pipeline company Spectra Energy Corp. first proposed the Access Northeast pipeline project in September. On Tuesday, the companies provided more details on the project and said National Grid had taken a 20 percent stake, leaving the original two companies with 40 percent each.
The Access Northeast project is the third proposal to expand current pipelines to increase the supply of natural gas to New England, which has become increasingly dependent on gas to heat homes and generate electricity. Unlike the other projects, however, Access Northeast would entail changing the rules of the regional electricity market so electricity customers, instead of gas-burning households, would ultimately foot the bill for the pipeline project.
“We’re saying if the markets haven’t worked and it’s not in ISO New England’s charter, then we’ll put together a solution that’s elegant,” said Lee Olivier, an Eversource executive, referring to the organization chartered by the federal government to operate the regional electric grid. “This is novel. This has never been done in the US the way we’re doing this.”
The companies said they will begin soliciting informal commitments from utility companies on Wednesday to buy dedicated streams of gas from the project, which would expand the existing Algonquin pipeline from New Jersey and the Maritimes and Northeast pipeline from Canada to deliver an additional 900 million cubic feet of gas per day. That’s about a fifth of New England’s current natural gas pipeline capacity.
Eversource and National Grid, which supply 70 percent of New England’s electricity, said they’d buy a “fairly large” portion of that increased gas flow to sell to gas-burning power plants.
Dan Dolan, the head of the New England Power Generators Association, said the proposed method might require policy makers to change the way pipelines are paid for. Still, he said, power generators would reserve judgment until more details of the proposed financing method were released. “A key issue is still: Does any state have the authority to do that? Are they going to need new legislation to do that?” Dolan said.
Spectra has already moved forward with two other projects, called the Algonquin Incremental Market and the Atlantic Bridge, to increase the capacity of those two pipelines by 500 million cubic feet per day. The pipeline company has said those projects should be completed in November 2016 and November 2017, while Access Northeast would come into service in late 2018. The Houston-based pipeline company Kinder Morgan also has proposed building a pipeline across northern Massachusetts and southern New Hampshire.
All of the projects have encountered opposition from environmental activists and community groups, however. They fear that the projects could disrupt their neighborhoods, increase the region’s reliance on fossil fuels, or support natural gas exports through Canada. Bill Yardley, who oversees Spectra’s US natural gas operations, said the new capacity would serve only the New England market.
“We see the inter-operability issues between gas and electric only becoming more and more acute,” said John Flynn, a senior vice president at National Grid.