Transcript Slide 1

Policy Research Shop
Natural Gas Consumption and
Cost in New Hampshire
Presented to the New Hampshire
House Science, Technology and
Energy Committee
April 9, 2015
Hamza Abbasi, Maggie Fiertz, and Mark Sheridan
Support for the Policy Research Shop is provided by the Fund for the Improvement of
Postsecondary Education, U.S. Department of Education.
The contents of this report were developed under grant P116B100070 from the U.S. Department of
Education. However, these contents do not necessarily represent the policy of the U.S. Department of
Education, and you should not assume endorsement by the Federal Government.
Policy Research Shop
Overview of Presentation
1.
2.
3.
4.
Recent Trends
Overview of Natural Gas and Energy Demand
Energy in New Hampshire
Options for Reducing Constraints on Natural
Gas Capacity
5. Energy Policy in New England
6. Conclusion
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Recent Trends in Natural Gas Use
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Recent Trends: New England
• Natural gas consumption likely to continue to
increase
• Closure of Vermont Yankee, Salem Harbor and
Brayton Point coal plants
• New Hampshire less dependent on natural gas
than other NE states
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Overview of Natural Gas
• Fossil Fuel
• Cleaner burning than coal
• Still contributes to climate change, has other
environmental impacts
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Overview of Energy Demand
• Peak Demand
– Demand is based on the highest capacity required
during the given billing period
– Peak period refers to when demand for electricity
is at its highest
• Energy Constraints
– Imported energy resources
– Pipeline limitations
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Energy in New Hampshire
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Energy Goals in New Hampshire
• 25% renewables by 2025
• Only 16% renewables in 2013
• Natural gas cleaner than other fossil fuels, but
not a renewable source
• Important to evaluate New Hampshire’s
energy future - role of natural gas, renewable
energy
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Situation in New Hampshire
• Winter of 2014: demand skyrocketed due to
extreme temperature drops
– Electricity prices briefly shot up to $1,290 per
megawatt hour compared to a yearlong average of
$36 per megawatt hour due to shortages
• Winter 2015: defied expectations
– Worldwide prices have dropped
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Options for Reducing Constraints on
Natural Gas Capacity
• Energy Efficiency
– New England states lead the nation in energy
efficiency, but New Hampshire lags behind
– Many programs have specifically targeted natural
gas utilities
– Improved energy efficiency could help NH
immediately reduce constraints on natural gas
capacity
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Options for Reducing Constraints on
Natural Gas Capacity
• Improving existing natural gas infrastructure
• New England has old infrastructure and
highest leakage rates
• Few incentives in place to reduce leakage
• States that have passed legislation have very
low leakage rates
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Energy Policy in New England
• NEGC/ECP
• Emission reduction: “20% by 2025”
• Renewable energy sources and more efficient
fuels
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State by State Emission Reduction
•
•
•
Maine - 2003 emission
reduction goals
– Department of
Environmental Protection
to create a Climate Action
Plan (CAP)
Massachusetts - Climate
Protection Plan - 2004
– 2008 Global Warming
Solutions Act - 80 percent
by 2050
Rhode Island
– Inter‐agency Greenhouse
Gas Stakeholder Project in
2001
• Connecticut - statewide Climate
Action Plan in 2004
– Increase the amount and
accessibility of electricity
generated by renewable fuels.
– Natural Gas = bridge fuel
• Vermont
– Governors’ Commission on Climate
Change in December 2005
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Natural Gas Specific New England
State Legislation- Maine
• 2012 - “An Act to Expand the Availability of Natural
Gas to Maine Residents”
– Finance Authority of Maine to issue bonds for energy
distribution system projects
– Applicant contributes at least 25% of the expected cost
• 2013 - Maine Energy Cost Reduction Authority Bill did NOT pass
– Entering into contracts to procure and resell natural gas
pipeline capacity and for pipeline corridors
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Natural Gas Specific State
Legislation- Massachusetts
• Focus on environmental safety and efficiency
of natural gas
• 2014 - requires utilities to improve their gas
leak inspection protocols and establish a
timeline for fixing all hazardous leaks
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Natural Gas Specific State LegislationVermont
• 2012 - First state to ban hydraulic fracturing to
extract oil or natural gas.
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Natural Gas Specific State
Legislation- Rhode Island
• 2014 - promote a regional six-state effort
• Two main plans:
– Bringing hydropower to the New England states
– Increasing supplies of natural gas to address the
fact that the region is being serviced by pipelines
that are at or near capacity
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Natural Gas Specific State LegislationConnecticut
• 2013 - Passed legislation expanding
Connecticut’s natural gas distribution system
• Companies have filed a proposal with state
regulators outlining plans to connect 280,000
customers over 10 years
• Future possibility: ban on storing or recycling
wastewater?
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NESCOE Report
• Examined natural gas in New England in the
period 2014-2029
• Base and high demand scenarios, New
England could face high costs due to capacity
constraints—recommend cross-regional
pipeline
• Low demand scenario, no new infrastructure
needed
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Conclusion
• Major shifts in New Hampshire’s energy mix in
the past decade
• Pipeline infrastructure has not kept pace
• Short-term and long-term options to reduce
infrastructure constraints
• Key to reduce vulnerability to price volatility