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PUC Staff Recommends Against Natural Gas Pipeline Expansion

Staff at Maine’s Public Utilities Commission are recommending against a proposal to use consumer money to buy long-term contracts for natural gas pipeline capacity. But some stakeholders say the proposal would ultimately save ratepayers money.

The new proposal would require electricity consumers to pay for up to $75 million worth of long-term natural gas capacity contracts. The idea is to encourage the build-out of pipelines in southern New England that would make sure that when demand for natural gas is highest — on the coldest winter days, for instance — generators still can get access to gas at a good price.

But in an analysis this week, PUC staff argue new pipeline capacity in the works and lower gas prices are already creating market conditions that will avert the wild price spikes that were seen in the winter of 2013.

Public Advocate Tim Schneider, whose job it is to represent consumers before the PUC, says its staff is wrong.

“Everybody agrees that as a region we’re going to become more and more reliant on natural gas-fired generation in the near-term, and those generators are going to need to get gas from somewhere, and right now there’s not guaranteed pipeline capacity that serves those generators,” he says.

Industrial electricity users also want the PUC to allow the contracts. But environmentalists say the move would lock the region into further dependence on the fossil fuel at a time when renewable energy should be the priority.

The Commission is expected to decide the question within a month.