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Spectra Energy and Northeast Utilities Announce New England Energy "Reliability Solution"
September 16,2014 Spectra Energy Corp, Spectra Energy Partners, and Northeast Utilities announced details of the Access Northeast project, which they said is designed to reliably meet growing demand for natural gas in New England. "This project will help deliver increased, guaranteed daily supplies of natural gas to consumers, as well as enhanced service on peak days for strategic natural gas-fueled electric generation plants, to address New England’s reliability concerns and reduce costs paid by the region’s electric and gas consumers," the companies said. The gas pipeline expansion project will enhance the Algonquin and Maritimes pipeline systems, will be scalable to meet growing needs, and will be capable of reliably delivering in excess of one billion cubic feet of natural gas per day. Access Northeast, originally outlined by Spectra Energy in a June 27, 2014, letter to the New England States Committee on Electricity (NESCOE), is estimated to cost roughly $3 billion and has an anticipated in-service date of November 2018. Spectra Energy and NU will be equal partners in the project, with the option of additional investors joining in the future. The two companies will work with electric and gas industry representatives, including ISO-NE and NESCOE, to establish the levels of firm natural gas supply required to ensure both generation reliability and LDC demand growth, the companies said. “This new partnership with Spectra Energy will benefit our customers, drive costs down and help take a substantial step toward solving the looming energy crisis in New England,” said Tom May, NU chairman, president and chief executive officer. “Last winter, the New England electric market reached a critical point, as lack of access to natural gas capacity cost customers dearly. New England wholesale electricity costs were nearly double compared to the previous year, largely due to pipeline constraints. These challenges will remain the same for the next several years, and our customers will feel the effects, if we do not act. We recognize that a portfolio of investments will be needed to address this challenge and we intend to deliver a reliable solution to customers with this project.” Spectra Energy and Northeast Utilities’ proposal includes: • Scalable expansion of existing pipeline infrastructure, which is attached to approximately 60 percent of ISO-NE’s natural gas generation capacity • Partnering with existing regional storage assets to provide firm services to electric power plants with guaranteed natural gas supplies on peak days and to enable rapid response to sudden changes in power output • Additional Algonquin and Maritimes delivery points for local distribution companies (LDCs) to access diverse, low-cost natural gas resources where necessary This expansion will complement Spectra Energy’s previously announced Algonquin Incremental Market (AIM) and Atlantic Bridge projects. Spectra Energy’s AIM expansion project will begin to de-bottleneck the pipeline system by the winter of 2016-2017, helping to enhance reliability and reduce natural gas price volatility in New England. AIM is underpinned by long-term commitments from gas utility companies across southern New England. Atlantic Bridge’s proposed in-service date is November 2017, and it will be similarly supported by gas utilities. Access Northeast will provide needed additional firm supplies, delivered directly to the power generators, to address electric reliability. The project will also allow local natural gas distribution companies to request new access points and lateral pipelines for additional capacity.
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