By William Opalka
Staff members are recommending that the Maine Public Utilities Commission not approve natural gas pipeline capacity contracts paid for by electric and gas customers.
An Examiners’ Report released last week said market changes since the price spikes of 2014’s polar vortex make it unlikely electric generators will make commitments for pipeline capacity in an effort to stabilize prices.
“The commission does not find that the market and rule changes to date are likely to alter the fact that the region’s generators do not make long-term commitments for pipeline capacity,” the report said, which is written as a draft order (2014-00071).
Maine’s Energy Cost Reduction Act, passed in 2013, authorized the PUC to execute “energy cost reduction contracts” for 200 million cubic feet of natural gas costing up to $75 million a year, if it found that the contracts would save ratepayers money. The law allows the PUC to administer and resell the pipeline capacity.
The report said that much has changed since the law was passed and that historic low prices for natural gas have removed the urgency felt two years ago.
It cited incremental gas pipeline construction projects that are coming online as a source of supply. (See FERC Denies Rehearings on ISO-NE Pay-for-Performance.)
The report comes two weeks after Kinder Morgan withdrew its application with FERC for the Northeast Energy Direct pipeline through New England, citing a lack of commitments from potential customers and an uncertain regulatory outcome for ratepayer financing.
“Hot on the heels of the recent downfall of Kinder Morgan’s massive pet pipeline project, this is an important victory on the path to stopping the patchwork effort across New England to build a polluting pipeline on the backs of consumers,” pipeline opponent Conservation Law Foundation said in a statement.
“We believe there is a strong case that electricity prices will be lower if the region has more gas pipeline capacity,” Tim Schneider, the state’s public advocate, told the Portland Press Herald. “This is why we supported Maine buying capacity as part of a regional effort. If Maine doesn’t buy capacity, it puts the regional effort at risk.”