Natural Gas Issues Could Impact New England This Winter
CONCORD — Federal energy regulators predict natural gas may be in short supply for New England this winter.
New England electric generators are more dependent on natural gas than any other fuel, with about 52 percent of generation produced by natural gas facilities.
According to the Federal Energy Regulatory Commission’s annual assessment of winter energy markets and reliability, in extreme winter conditions the region’s commercial and industrial sectors may have to curtail activities and there may be outages in the natural gas and electric sectors.
But the report notes there should be ample fuel supplies to produce enough power to meet demand under expected conditions.
The report does say greater exports of liquified natural gas into the global market, reduced reserves and limited pipeline capacity could negatively impact New England.
Due to limited pipeline capacity, New England relies on LNG to bolster the fuel supply during peak winter months, but now will be competing for those supplies with the global market, particularly East Asia and Europe, according to federal regulators.
During the winter months natural gas use for heating is a higher priority on pipelines as providers enter into long-term firm transmission contrasts with operators, but most power generators do not and that also impacts prices, regulators noted. They also said there is little storage capacity in New England which also impacts prices and system reliability.
Natural gas prices have doubled from what they were a year ago in much of the country, according to the assessment, but at the Algonquin Citygate hub near Boston, the price is four times higher than last year heading into the winter.
The regional manager of the electric system, Independent System Operator-New England, is in the process of finalizing its annual winter outlook and will be better able to address the situation when it finishes its assessment, said Matthew Kakley, senior communications specialist for ISO-NE.
“Winter is a challenging season and, as we’ve stated in the past, New England has risks during cold weather,” he said. “While we don’t project natural gas prices, we would expect to see higher electricity prices at the wholesale level this winter due to higher fuel prices, relative to recent years, given what we’re seeing globally in terms of fuel prices.”
Price is determined by a number of factors including consumer demand and weather, he noted.
“We’re in regular communication with generators, pipeline operators, etc. throughout the year, and particularly during the winter months,“ Kakley said. “We publish a 21-day forecast looking at system conditions, forecasted weather, consumer demand, generators’ reports of stored-fuel inventories and emissions limitations, and status of fuel delivery systems.”
The forecasts seek to identify potential shortfalls early enough to address any problems, he said.
William Hinkle, media relations manager for Eversource, New Hampshire’s largest electric utility, said Eversource’s current electric rates for default service will remain in place until Feb. 1.