A year after pulling the plug on Northeast Energy Direct, Tennessee Gas Pipeline is soliciting contracts for new natural gas pipeline capacity in New York and New England — suggesting that tentative plans for new infrastructure may be in the works.
Tennessee, a Kinder Morgan subsidiary, announced an “open season” on May 23, seeking binding 20-year commitments for new capacity that could be in place by November 2018. The offer to anchor shippers will close on June 30.
The solicitation “will ultimately determine the level of customer interest for any additional gas service,” said Kinder Morgan spokesman Richard Wheatley.
The new capacity would be available in Tennessee’s Zone 5 and Zone 6, which serves utilities in Massachusetts, New York, Connecticut, New Hampshire and Rhode Island.
Tennessee “is working to address the needs of local distribution companies that are unable to fully serve their customers,” Wheatley told The Republican.
Although the $5 billion NED pipeline has been terminated, “there is still demand for expansion capacity in the Northeast,” according to Tennessee.
While no specific plan is on the table, capacity could be increased through three means: new compression or pipeline facilities; reserved capacity; or through building other facilities or modifications.
Tennessee will continue to reserve capacity “to facilitate the development of a future expansion” in the Northeast, the notice states.
“Given these market conditions, continuing to develop the project is not an acceptable use of shareholder funds,” said a Kinder Morgan spokesman at the time.
It’s not clear if market conditions have changed since then. Locally, Berkshire Gas and Columbia Gas, citing pipeline bottlenecks, maintain moratoriums on new service in parts of Western Massachusetts, but have signaled that a solution may be imminent.
Liberty Utilities in New Hampshire has said it plans to convert a propane-based distribution system in Keene to natural gas, and voters in Vernon, Vermont, have expressed support for a possible natural gas plant to replace the now-shuttered Vermont Yankee nuclear reactor.
Fossil fuel critics, including U.S. Senator Ed Markey, D-Massachusetts, have charged that the new capacity is not needed and that New England pipeline expansion will ultimately serve the export market for liquefied natural gas, or LNG. Plans for an export terminal in Nova Scotia are in fact inching forward, and Pieridae Energy last year won federal approval to export U.S. natural gas to non-free-trade agreement countries from its planned Goldboro LNG facility.
Pipeline expansion plans in Massachusetts have met with relentless opposition.
However, many business and industry interests support increased capacity in New England, where in past years pipeline constraints led to price spikes in wholesale power markets. ISO New England, which operates the six-state power grid, has warned that such fuel constraints may threaten system reliability.
Questions still remain over the financing of pipeline expansion in New England, where around half of all electricity is generated by natural gas power plants that won’t enter into long-term contracts for the fuel.
Customers with binding agreements tend to be local distribution companies such as Berkshire Gas. Power plants buy any fuel that’s left over on the spot market. An effort by Massachusetts regulators to let electric utilities enter into long-term natural gas pipeline contracts on behalf of power plants was shot down last year by the state’s highest court.