Liberty Utilities seeking to buy more natural gas from proposed pipeline

They nearly cause a major disaster in Keene and are now looking to more people in danger to increase profits before there is even a need ,,

 

By Meghan Foley Sentinel Staff

CONCORD — Liberty Utilities officials want to buy more natural gas than they’ve already signed up for from the proposed Northeast Energy Direct pipeline, saying the move will benefit their customers and the project. Meanwhile, a coalition of 15 southern New Hampshire communities fighting the pipeline — including five from Cheshire County — wants to get involved in the state proceedings to decide whether the company should be allowed to buy more.

Liberty Utilities officials submitted a petition to the N.H. Public Utilities Commission earlier this month asking it to approve an agreement allowing the company to buy 78,000 dekatherms a day of natural gas from the supply path component of the pipeline.

That amount is less than the 115,000 dekatherms per day Liberty already has the OK to buy from the market path component of the pipeline. The commission approved that agreement in October.

The supply path is an industry term used to designate the section of pipeline that will carry natural gas from its source to another pipeline called the market path. There, the natural gas will be transported to the area where it would be distributed.

A dekatherm equals 10 therms. One therm equals about 29.3 kilowatt hours of electricity, which is a small portion of the 10,908 kilowatt hours the average American household consumed annually in 2013, based on data from the U.S. Energy Information Administration.

Both agreements, which Liberty officials signed within 14 months of each other, are with Tennessee Gas Pipeline Co. Inc., a subsidiary of Kinder Morgan, which is proposing the 419-mile interstate natural gas pipeline.

Liberty spokesman John Shore said this morning that company officials sought the market path agreement first because it would deliver natural gas directly to the company’s service territory.

“Without the market path capacity, it would make no sense to contract for supply path capacity as the supply path would only deliver to Wright, N.Y., and Liberty would have no way of transporting that supply to its service territory,” he said.

Liberty Utilities, which is also known in New Hampshire as EnergyNorth Natural Gas Inc., has about 90,000 customers in the southern and central parts of the state and Berlin, according to Public Utilities Commission filings.

The company has 1,250 customers in Keene who buy a propane-air mixture. The company is looking at converting that system to natural gas service and expanding into other Monadnock Region communities that aren’t served. It has a pending application before the N.H. Public Utilities Commission seeking approval to own and operate gas franchises in Jaffrey, Rindge, Swanzey and Winchester.

At this time, Liberty officials don’t anticipate buying more gas from the pipeline, Shore said.

However, they will re-evaluate their needs every two years, as required by the N.H. Public Utilities Commission, he said.

N.H. Municipal Pipeline Coalition members are preparing to seek intervenor status in the most recent petition, as it’s important the towns and their residents have a voice in the process, Brookline Town Administrator Tad Putney said Wednesday.

“It was fully expected they’d go after the supply piece. It was just a matter of when,” he said.

There are several concerns about the pipeline — including if there is a need for it, he said — and he hopes the coalition’s intervenor request will be accepted.

They have until today to file.

The coalition covers the towns of Amherst, Brookline, Fitzwilliam, Greenville, Litchfield, Mason, Merrimack, Milford, New Ipswich, Pelham, Richmond, Rindge, Temple, Troy and Winchester.

In their Dec. 8 petition to buy more natural gas, Liberty officials asked the Public Utilities Commission to approve a 20-year contract to purchase gas from the pipeline’s supply path.

The contract would take effect Nov. 1, 2018, which is when Tennessee Gas Pipeline officials plan to have the high-pressure transmission line operating.

“The Supply Path (agreement) provides the Company and its customers with the opportunity to take advantage of what has been an exceptional source of natural gas both in terms of quantity and price over the past five years,” Sarah B. Knowlton, a Concord attorney representing Liberty, wrote in the petition.

An analysis done by Liberty officials showed the agreement could lead to potential cost savings and increased price stability for its customers, according to the petition.

In addition, it would provide Liberty with direct access to the Marcellus Shale — a large and growing natural gas resource in the Northeast — and to numerous storage facilities near natural gas production areas, and enhance the diversity of Liberty Utilities’ portfolio, the petition said.

Liberty officials request in the petition that the Public Utilities Commission find the agreement “is prudent, reasonable and consistent with the public interest,” and ask members to issue a final decision no later than April 2, 2016.

Liberty Utilities has until May 2, 2016, to terminate the supply path agreement at no cost to its customers if it doesn’t receive the required approvals, according to testimony from Francisco C. DaFonte, Liberty’s vice president for energy procurement.

Liberty Utilities officials decided to purchase less natural gas per day from the supply path compared to the market path because the modeling they performed “suggested that the best cost option for its customers was a contract volume of 78,000 (dekatherms) per day,” he said.

The Northeast Energy Direct pipeline would run from the shale gas fields in northern Pennsylvania to Dracut, Mass. Along the way, it’s slated to pass through 19 communities in southern New Hampshire, including the Cheshire County towns of Fitzwilliam, Richmond, Rindge, Troy and Winchester.

Tennessee Gas Pipeline officials filed the $5.2 billion project’s application Nov. 20 with the Federal Energy Regulatory Commission. They’ve asked the commission to approve it by the fourth quarter of 2016.

As part of getting the commission to approve the project, Tennessee Gas has to show there is a need for the pipeline. That includes having agreements with companies to buy natural gas off the pipeline.

In addition to Liberty Utilities, other gas companies, generators and producers — mostly in New England and New York — have signed on to benefit from the project, but space remains on the pipeline.

Approximately 174 miles of the pipeline — from Susquehanna County, Pa., to Wright, N.Y. — would be the supply path component. It would have the capacity to transport up to 1.2 billion cubic feet of natural gas per day, or 1,230,000 dekatherms.

Of those dekatherms, 751,650 have been claimed by electric generators, producers and local distribution companies, according to Tennessee Gas Pipeline’s FERC filing.

The remaining roughly 188 miles of pipeline would travel from Wright to Dracut as the market path component, which would have the capacity to transport up to 1.3 billion cubic feet of natural gas per day, or 1,332,500 dekatherms.

Of those dekatherms, 552,262 have been spoken for, according to the FERC filing.

Richard N. Wheatley, spokesman for the Northeast Energy Direct project, said Wednesday Tennessee Gas Pipeline officials continue to discuss capacity commitments with potential customers and shippers for the supply and market paths.

Based on the capacity of each pipeline path component and what has already been claimed, he said, there are approximately 748,000 dekatherms available remaining on the supply path, and about 448,000 dekatherms remaining on the market path.

Wheatley said it’s up to company management and Kinder Morgan’s board as to how much space on the pipeline it’s looking to sell to prove to federal regulators the project is needed.

DaFonte said in his testimony filed with Liberty Utilities’ petition that officials entered into the supply path agreement with Tennessee Gas Pipeline primarily to “lower costs to our customers by displacing higher cost supplies.”

Debra A. Howland, executive director of the Public Utilities Commission, scheduled a prehearing conference on the supply path petition for Tuesday, and gave a deadline of today to file for intervenor status.

The deadline to file for intervenor status in the Federal Energy Regulatory Commission’s review of the Northeast Energy Direct pipeline project is Wednesday.

Meghan Foley can be reached at 352-1234, extension 1436, or mfoley@keenesentinel.com. Follow her on Twitter @MFoleyKS.