Log In


Reset Password
  • MENU
    State
    Friday, May 03, 2024

    Regulators warned of rising energy costs in New England as winter approaches

    Central Maine Power utility lines are seen on Oct. 6, 2021, in Pownal, Maine. (AP Photo/Robert F. Bukaty, File)

    New Englanders face the prospect of sharply higher heating, cooling and electricity costs as the region struggles with an array of problems that do not even include Russia’s assault on Ukraine that scrambled global energy markets, federal regulators were told Thursday.

    The Federal Energy Regulatory Commission, focusing on the region’s chronic energy problems, organized a “Winter Gas-Electric Forum” in South Burlington, Vt. Regulators solicited comments from utilities, natural gas suppliers, generators, state officials, environmentalists and others.

    “Not only do we need to think about how to keep the lights on, how to keep the heat going we also need to think about the cost impact,” said FERC Chairman Richard Glick. “It could be significant pain for consumers.”

    Charles Crews, president and chief executive officer of the Northeast Gas Association, warned that the cost to heat homes and businesses could quadruple. Since 2010, New Englanders have spent $3 billion more on energy than the rest of the country, he said.

    “That should be, if it isn’t, certainly alarming for us,” Crews said. “Nine-dollar gas could potentially spike to $40 gas in January.”

    That would mean “everyday consumers” in New England face the prospect of $1,000 utility bills, he said.

    Natural gas pipeline constraints in New England brought on by high demand by utilities and generators, global supply chain problems and other issues have vexed the industry and policymakers for years.

    Climate change causing extreme temperatures in the U.S. and abroad and turmoil in European energy markets brought on by Russia’s war on Ukraine have brought more stress to energy markets. FERC called the day-long conference to discuss the region’s “historic winter energy challenges and potential challenges for future winters.”

    Katie Dykes, Connecticut’s energy and environment commissioner, criticized an electricity market design she said is “built around the investment needs of natural gas units in a region that is limited in its availability of gas transportation and gas supply.”

    In addition, climate change is becoming the “greatest threat to the reliability of the electric grid,” she said.

    ISO and utilities took aim at imported liquefied natural gas as a particular problem.

    “We need to get out of the business of tracking LNG shipments across the ocean,” said Stephen George, ISO’s director of operational performance, training and integration. “It’s not sustainable. It’s not reliable. It’s probably not very efficient.”

    Natural gas pipelines that serve New England operate at maximum capacity during the winter and cannot fully meet demand during very cold weather and during extended periods without “significant injections” of LNG, ISO and the utilities say.

    New England is at the end of the interstate pipeline system and lacks large scale, long-duration energy or fuel storage, requiring a dependence on imported LNG, said ISO and the utilities.

    Glick said that in periods of prolonged periods of cold, “there may be concerns of a sufficient lack of fuel.” Yet despite some “close calls” in previous New England winters, power outages have not occurred, he said.

    “That doesn’t mean the challenges go away. The challenges certainly are ahead of us . . . and are expected to get worse,” he said.

    ISO-New England warned last December that power outages are possible if an extended cold period grips the region and fuel supplies are pinched with higher demand.

    New England is increasingly reliant on natural gas, which rose to 53% of electric energy production in 2021 from 15% in 2000, according to ISO. The region also is increasingly dependent on imported liquefied natural gas.

    As a result, residential and business consumers are vulnerable to the significant price spikes in natural gas immediately after the COVID-19 pandemic and since the Feb. 24 invasion of Ukraine by Russia. In addition, bitter cold snaps bring on significant demand spikes for natural gas.

    Natural gas spot prices have jumped from about $2.50 per 1 million British thermal units in January 2021 to nearly $10 this summer. It has fallen back slightly to about $8, according to the U.S. Energy Information Administration.

    George said the the region was “days away from running out of usable fuel.” During 13 days of below-average normal temperatures, the region burned 100 million gallons of oil and neared environment limits at several generating plants.

    Comment threads are monitored for 48 hours after publication and then closed.