Kinder Morgan has stopped development of its proposed Northeast Energy Direct natural gas pipeline which was meant to boost New England's access to natural gas suppliers, citing a lack of customer commitments and the lack of a cost recovery mechanism, such as mandates for the procurement of new pipeline capacity from state regulators.

Such mandated procurements have been opposed by merchant generators, who benefit from increased LMPs driven by natural gas supply constraints

While we are not in favor of mandates, we do have to wonder why it's OK for FERC to mandate that customers must purchase a set amount of installed generation capacity, but it's suddenly an intrusion into the "competitive" market for regulators to require the procurement of a certain level of pipeline capacity

See the Boston Globe for more on Kinder Morgan's decision

Tags:
Natural Gas   Capacity Market   New England  

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