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Mass. faces new energy challenges


By: George Barnes |

With a natural gas pipeline proposed for northern Massachusetts still in the planning stages and strong opposition in communities along its route, power experts are saying a shortage of gas supplies in the state and New England in general is driving up prices and forcing greater reliance on coal and oil power generation.

The problem is expected to get worse this winter regardless of the weather, but a cold winter similar to last year would significantly add to the problem.

Fossil fuel generation is not the direction the state wants to move, but until large wind energy projects both off shore and inland go online, natural gas and the dirtier oil and coal plants are what is available to meet energy needs.

Marcia Blomberg of Independent System Operator-New England in Holyoke said the region’s dependence on natural gas power generation has been growing rapidly since 2000. With natural gas prices dropping dramatically because of increased domestic production, including from the Marcellus Shale in parts of New York, Pennsylvania and West Virginia, she said fuel for electricity generation from coal and oil has shifted to natural gas. The percentage of the state’s electricity from natural gas-fired power plants has grown from 15 to 46 percent of the total. It has grown so much that there was not enough natural gas available to meet the power and commercial and home heating demand during periods last winter.

Lacy Ryan of ISO said generators, especially in the winter, have found it difficult to get enough natural gas to serve their needs. She said it has been a twofold demand: Because of low prices, many power plants have converted to natural, but for the same reasons, more and more homeowners are also converting their home heating systems to natural gas.

“Not enough gas can get through the pipeline to supply home heating and power generating,” she said.

Because of constraints in the delivery system, the price of natural gas spiked last winter, forcing ISO to call on what are normally more expensive coal and oil power plants.

ISO-New England is not in the weather-prediction business or in the business of producing power. It is an independent, nonprofit corporation established by the federal government in 1997 to operate the high-voltage electricity system across New England and to administer wholesale electric markets in those states to ensure they are fair and competitive.

The organization coordinates and directs the daily flow of energy on the region’s electric transmission system, designs and runs the wholesale electric markets and conducts 10-year planning to ensure the region’s electric needs are met.

Last winter was particularly challenging for the power grid. The price of natural gas spiked during colder weather to the point where oil- and coal-fired plants were relied on heavily to fill energy needs.

The temperatures during the first three months of this year regularly dipped below 20-year lows, especially in January, and the supply of natural gas could not keep up with the power-generating and home-heating demands.

Coal- and oil-generated electricity has been more expensive in recent years, but with the natural gas delivery system constrained, when there is not enough gas to meet the demand, the price spikes.

“We dispatch the least costly generators to meet the demand,” Ms. Blomberg said.

The system is designed to provide power at the lowest possible price, but ISO-New England also needs to ensure the reliability of the system.

“The major risk is that we could call on natural gas-fired generators at times of system stress or high demand, but they will not be able to get the fuel they need,” Ms. Blomberg said.

To illustrate the point, she said one day in January, out of 11,000 megawatts of natural gas-fired power plants in the New England region, only 3,000 megawatts of generation were running.

To address the deficit, ISO-New England turned to other sources of power, including the normally more expensive oil and coal.

But some oil and coal plants do not run regularly and do not keep extra fuel supplies on hand. Some take up to 24 hours to get online.

To address the availability of backup generation, last year ISO-New England implemented a winter reliability program in which oil and dual-fuel power plants were paid to store extra fuel in tanks so they would be available to generate if needed. The program helped keep the power grid operating last year and Ms. Blomberg said the program will be in place again this year.

The simple answer for solving the natural gas availability problem might be to increase pipeline capacity, a need ISO-New England has identified to meet the high demand, but the issue is not as simple as it sounds.

The announcement in the spring that Tennessee Gas Pipeline Co., a subsidiary of Kinder Morgan Co., was exploring building a pipeline across northern Massachusetts raised a storm of protest from residents of communities along the route from Richmond to Dracut and communities in lateral extensions proposed from existing lines to connect Fitchburg and Worcester.

No Fracked Gas in Mass., an organization formed to fight the proposed pipeline, is calling for increased energy efficiency and a great focus on solar, hydro and wind power and other green energy alternatives, rather than piping more natural gas into the state.

Power companies, including National Grid, which serves many communities in Central Massachusetts, have little control over how energy is produced, but buy at the price available and have to pass on increased prices to consumers.

To address this, power companies encourage their customers to participate in various energy-saving programs. National Grid spokesman David Graves said energy prices are related to both fuel supply and weather- and storm-damage.

He said to keep power bills under control, he recommends customers do what he did and take advantage of home energy audits, which point out improvements they can make to save heat and electricity.

The programs have resulted in $2.4 billion in savings for Massachusetts electric customers in the past three years and $673.5 million for gas customers over the same period.

Energy-saving measures are promoted by the state, but long-term changes in how the state gets power are needed.

Mark Sylvia, undersecretary for energy for the state Office of Energy and Environmental Affairs, said Gov. Deval L. Patrick remains skeptical of the proposal to build the pipeline in northern Massachusetts. He has not rejected it outright but wants the state to look at all its options for power.

Mr. Sylvia said the governor is working with governors of the other New England states to find solutions to energy costs and needs in New England.

“We share their concern about capacity constraints for natural gas throughout New England,” he said.

The state’s Clean Energy and Climate Plan the state drew up in 2010 calls for the state to produce 15 percent of its energy from renewable sources by 2020. This spring, the state also announced signing New England’s largest long-term procurement contract for renewable energy for 409 megawatts of renewable energy.

These are for projects expected to come online in the next few years, but in the near future, the state will need to fill gaps.

Mr. Sylvia said 8,300 megawatts of generating capacity is expected to be retired, including the closing of the Vermont Yankee nuclear power plant.

In December the state signed a pact with the other New England states to jointly address energy needs, focusing on the need for clean energy resources and the challenges of natural gas capacity.

Among other things, the New England governors and energy officials would consider new natural gas pipeline infrastructure and investing in new transmission infrastructure as needed.

The infrastructure expansion would be paid for by separate tariffs on power bills to pay for the clean energy transmission improvements and natural gas line expansion.

Since signing the agreement, Mr. Patrick has asked for a delay in implementing it while the state analyzes all energy possibilities, including solutions that do not rely as heavily on natural gas.