The New England states and ISO-New England, which manages the region’s electric grid, are taking steps to keep the lights on during polar vortex events until new natural gas pipeline capacity through New England comes online. They also are making progress on an effort to have electric customers pay to help support new pipeline capacity developed specifically to serve gas-fired units. But while new gas-fired generation is being built in the region to replace older coal (and nuclear) capacity being retired, gas’s role in New England electricity production may well be stymied by a push to import large amounts of eastern Canadian hydroelectric power. Today we examine how New England is playing gas against hydro, and how the outlook for gas consumption by generators may be less bullish than some think.
New England has been turning away from coal-fired generation, mostly in favor of gas-fired power. But as we have said often, there is not enough gas pipeline capacity into New England to fuel all (or sometimes even most) of the region’s growing fleet of gas units during the winter months, especially when gas demand for business and residential space heating is high. In Episode One of this series, we explained that ISO-New England is implementing several stop-gap measures to keep the lights on, and is considering various longer-term fixes that would bring the region’s electric needs, gas supply and air quality into a zen-like balance. The near-term fix is the Winter Reliability Program (WRP), which among other things incents oil stockpiling and gas-to-oil fuel switching when gas supplies for generation run tight. Longer term, ISO-New England and policymakers are considering ways to encourage development of new gas pipeline capacity to serve the electric sector. The New England States Committee on Electricity (NESCOE), has suggested a plan to add at least 600 MMcf/d of capacity later this decade, paid for through a monthly charge on utility bills. Midstream companies are already enthusiastic about this idea. They continue to win support from local distribution companies (LDCs) for incremental gas pipeline capacity—Kinder Morgan in late July announced deals totaling 0.5Bcf/d with several LDCs—but they need a NESCOE-type plan to support the additional pipeline capacity generators require.
What we have not discussed yet, though, is the very real possibility that the New England states also may decide to import a sizable amount of hydro power—1,200 MW as soon as 2018 and maybe 3,600 MW as soon as 2022--from existing or planned hydro megaprojects in Quebec and Newfoundland. To deliver more than a few hundred MW of around-the-clock power to New England, the states would need to socialize the cost of one, two or even three new 1,200 MW transmission lines. That means adding the cost to ratepayer bills just like the plans to add gas capacity. Your first thought may be, “Who cares about hydro?” But just about every MWh of electricity imported from eastern Canada would effectively replace gas-fired power generation in New England, meaning less demand for US natural gas. And while it should be noted that new transmission lines are not easily built without controversy in environment friendly New England, analysis from a recently released confidential report to Massachusetts policy makers confirms that these plans are real and that they could have a big impact on gas power burn demand.
The Wall Street Journal
Top story, front page: US general killed in Afghan attack.
T-Mobile left standing at the altar. Again. Sprint says opposition from regulators not worththe effort.
Fox withdraws its bid for Time Warner. Very, very, very smart move. Wasn't going to happen anyway.
Ohio will address drinking-water crisis with a new requirement for farmers to have a license to fertilize. Sort of like a permit for fracking.
I guess the hospitals and physicians making all that money on clinical trials are upset that someone had the audacity to try to save a couple of Americans with Ebola by using life-saving serum that had not gone through clinical trials. I always tell my granddaughters: if something doesn't make sense, a) follow the money; or, b) look it up on wiki.
Poll finds widespread economic anxiety? Really? 2Q14 GDP set some kind of record, hitting 4% Really? UC Irvine? Really?
If the Israel-Hamas ceasefire holds, Hamas blinked. I wonder how many Americans know that the Hamas leader lives in a luxury apartment in Doha. Phoning it in.
The Ukraine. What does it even matter?
This is a huge story; I see it everywhere out here in southern California: shoppers are fleeing physical stores. US retailers are facing a steep and persistent drop in store traffic, which is weighing on sales and prompting chains to slow store openings as shoppers make more of their purchases online.
Mom-and-pop investors may not be making any money but hedge-fund firm Och-Ziff's second-quarter earnings surged, driven by double-digit increases in revenue from management fees and income of consolidated funds.
More global warming fallout: too much rain in Europe. The excess rain may threaten wheat crops in Europe. Wheat prices jumped to a one-month high on such speculation. Speculatoin. There's that word again. I bought some shares in a publicly traded company earlier this week; I wonder if that makes me a speculator. No, it wasn't wheat.
The Los Angeles Times
Top story, first page: "use of experimental Ebola drug worries medical experts." Mostly the hospitals and physicians that clean up (financially) with clinical trials. Mandate that clinical trials be conducted pro bono and I doubt this would be a story. The audacity of it all: criticizing last-ditch efforts to save a couple of Ebola victims.
Porn industry flees Los Angeles; will likely flee the state. Actors can someday take the bullet train to Arizona. Oh, that's right. The bullet train is projected to run north-south.
Monkey bites woman outside Riverside County pizzeria. I assume the monkey will get the blame, but we haven't heard the monkey's side of the story. Probably one-too-many "monkey's uncle" stories.