By William Opalka

FERC will convene a technical conference May 9 to consider a proposal by New England officials that electric utilities purchase natural gas pipeline capacity (RP16-618).

The commission said the conference would examine issues raised by Algonquin Gas Transmission’s Feb. 19 petition asking FERC to allow exemptions from its capacity release bidding requirements. The proposed changes to the company’s tariff would permit “prearranged releases” of firm capacity to utilities or generation owners. Algonquin, a unit of Spectra Energy, owns a network of pipelines in the Northeast that it is proposing to expand.

“Such tariff modifications are consistent with the commission’s current policy of exempting releases pursuant to state-regulated retail access programs of natural gas local distribution companies from bidding requirements,” Algonquin wrote. The company said the exemption is needed to increase the supply of available gas in periods of high demand.

Generators have protested the petition, saying the exemption would distort the secondary market for natural gas and depress electricity prices. Other protests note that “state-regulated electric reliability programs” referenced by Algonquin either do not yet exist or are on shaky legal ground. A plan by Massachusetts regulators that would allow electric distribution companies to recover costs from ratepayers was challenged by the attorney general and is before that state’s Supreme Judicial Court.

Kinder Morgan last week scrapped plans to develop a major pipeline into New England to help supply natural gas-fired power plants, citing a lack of commitments from electric generators due to regulatory uncertainty over their cost recovery. (See related story, Kinder Morgan Suspends Northeast Energy Direct Pipeline.)

The cancellation of Kinder Morgan’s project, and New York regulators’ decision last week to deny an environmental permit to the proposed Constitution Pipeline, may improve the fortunes of a third major pipeline expansion into New England, Algonquin Gas Transmission’s Access Northeast project. (See related story, New York Rejects Constitution Pipeline.)

Two electric utilities, Eversource Energy and National Grid, own a combined 60% of the project, which would provide fuel for 5,000 MW of generation. Spectra Energy’s Algonquin Gas Transmission owns the remaining 40%. (See Algonquin Submits Pre-Filing Request for Access Northeast Pipeline.)