Spectra Energy Corp SE, Spectra Energy Partners SEP and
Northeast Utilities NU today announced details of the Access Northeast
project, designed to reliably meet growing demand for natural gas in New
England while providing environmental and economic benefits to the region.
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 gas pipeline expansion project will enhance the Algonquin and Maritimes
pipeline systems, using existing routes to minimize effects on communities,
landowners and the environment. The project will be scalable to meet growing
needs by expanding access to clean, abundant and affordable natural gas, and
will be capable of reliably delivering in excess of one billion cubic feet of
natural gas per day to serve the region's most efficient power plants and meet
increasing demand from heating customers.
“Spectra Energy is excited to offer this unique solution with Northeast
Utilities, one that calls for collaboration and cooperation with key New
England natural gas providers in order to customize a scalable project around
existing assets,” said Greg Ebel, Spectra Energy's chairman, chief executive
officer and president. “We've had a very positive response from natural gas
asset holders as the region comes together for a solution. This is another
step in our commitment to improving power system reliability, reducing
electric costs to make the region more economically competitive, and
protecting New England's quality of life by minimizing environmental and
community impacts.”
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.
Tom May, NU chairman, president and chief executive officer, said the project
will address a critical energy supply challenge in New England. Over the past
15 years, natural gas-fired generation has grown from serving 15 percent of
New England's annual electric requirements to serving approximately half. At
the same time, tens of thousands of New England homes and businesses have
converted to natural gas heating, while pipeline capacity into the region has
not grown. In the bitterly cold first quarter of 2014, gas demand for heating
customers rose significantly, leaving much less gas available for electric
generation. Older coal and oil plants filled in the gap, forcing prices to
skyrocket and at a cost to the environment. The addition of this project into
the region will enable new, efficient gas generation, which emits up to 50
percent less carbon than older oil and coal plants, to operate much more
frequently during cold winter weather.
“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 May. “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.”
Historically, New England's pipeline capacity has been built for average daily
usage while relying on supplemental facilities for high demand times. Spectra
Energy and Northeast Utilities will partner with interconnecting pipeline and
regional storage facilities to enhance grid reliability at peak demand times
and augment existing pipeline facilities within existing right of ways.
Spectra Energy and Northeast Utilities' collaborative 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
* An environmentally-responsible approach that will minimize impact by using
existing asset footprints
* 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.
Given the advanced nature of the project, expressions of interest from natural
gas service providers for regional assets will be secured by October 31, 2014.
Interested parties may contact Rich Paglia at 617-560-1310 to discuss any
questions or to seek additional information.
Please see further details at Spectra Energy's New England solution website:
spectraenergy.com/NewEngland.
Spectra Energy and NU will hold a media conference call Tuesday, September 16,
2014 at 10:00 a.m. ET with Greg Ebel and Tom May. News media wishing to
participate may call 800-531-3039 and use confirmation code 38112734.
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