On June 29, Enbridge Inc.’s Algonquin Gas Transmission, LLC (AGT) withdrew its pre-filing application with the Federal Energy Regulatory Commission (FERC) for its proposed Access Northeastpipeline expansion. The $3.2 billion Access Northeast project would have expanded or upgraded approximately 125 miles of the Algonquin pipeline system, which moves gas from an interconnect with the Texas Eastern Pipeline in New Jersey to the Boston area. The project would have added about 1.0 billion cubic feet per day (Bcf/d) of peak day capacity to the Algonquin pipeline’s existing 3.1 Bcf/d peak day capacity (including connections to the Everett and Northeast Gateway LNG facilities).
Access Northeast was initially proposed in 2015 by Spectra Energy Partners, LP, which owned the existing Algonquin system at that time, along with partners Eversource Energy and National Grid, each of which distributes electricity and natural gas in New England and elsewhere. (Enbridge acquired Spectra Energy Partners, LP in February 2017.) In addition to expanding pipeline capacity, the project also included a $600 million 6.8 Bcf liquefied natural gas (LNG) storage facility to provide natural gas to electricity generators at peak demand times.
Increased demand for natural gas has caused pipeline constraints in the region on especially cold winter days, leading to increased natural gas spot prices and, in turn, higher wholesale electricity prices. From 2000 to 2016, approximately 1.6 gigawatts (GW) of dispatchable non-gas electricity generation capacity (net) has retired in New England, and more than 10.4 GW of natural gas-fired generation capacity (net) has been added. Accordingly, during that time, natural gas-fired generation has gone from supplying about 20% to nearly 50% of New England’s electricity generation.
The Access Northeast project had challenges getting electricity generators to commit to firm transportation contracts. A surcharge on all electric ratepayers was proposed to recoup some associated costs. The Massachusetts Department of Public Utilities (DPU) had approved the basis for instituting the surcharge on December 21, 2015, but the Massachusetts Supreme Judicial Court overruled the DPU on August 17, 2016, and the surcharge was not instituted.
Although no new major pipeline expansions are currently pending with FERC, New England is currently served by nearly 6.5 Bcf/d of peak day pipeline capacity via five major pipeline systems. Included in that number is the 0.342 Bcf/d added by the Algonquin Incremental Market project, which entered into service at the end of 2016 and was the first additional pipeline capacity in New England since 2010. Lastly, the Atlantic Bridge project, which plans to add about 0.13 Bcf/d of capacity to the Algonquin pipeline system, was granted a Certificate of Convenience and Necessity by FERC in January 2017 and is targeting initial service in the second half of 2017.
