Worcester Business Journal

www.wbjournal.com October 12, 2015 • Worcester Business Journal 13 A large portion of electricity cost — and the reason it jumps in the winter — comes back to natural gas. In the last 10 years, electricity production from natural gas has grown from 15 percent to 44 per- cent, according to Marcia Blomberg, spokeswoman for regional power grid administrator ISO New England that manages the region's energy transmission. "The region is very reliant on natural gas for power production. At the same time, with the dropping price for natural gas, the demand has increased for heat- ing," Blomberg said. "During very cold weather, the pipelines are running full or almost full, and the gas is going to heat- ing customers." When the pipelines have no gas left for the power plants, they then buy their fuel from the more expensive spot mar- kets, Blomberg said. At the same time, higher cost generation plants fire up using oil and coal, and the result is higher electricity prices. Constrained supply This increased demand for natural gas is compounded by constrained pipelines of natural gas into Massachusetts. While the solution to increased energy costs is multifaceted, with alternative energy and efficiency programs being an integral part, in the >> E N E R G Y 860.871.1111 Toll Free: 800.741.6367 nemsi.com License #'s: E1-104939 • S1-302974 • P1-203519 • F1-10498 • SM1-192 • MC-1134 M E C H A N I C A L • E L E C T R I C A L • P L U M B I N G • S H E E T M E TA L • B U I L D I N G A U T O M AT I O N • F A C I L I T I E S S E R V I C E S SERVICE SOLUTIONS… ONE SOURCE Only one company can build, power, protect, and maintain the critical systems in virtually every type of facility. Our clients trust us to deliver end-to-end facilities solutions, so they can focus on their core business. We are experts in: Facilities Services Preventive Maintenance Programs Onsite Operations & Maintenance High natural gas prices drove electricity prices up immediate term there is simply too little natural gas coming into the area to handle the winter electricity load. "There is still and will continue to be a capacity shortage even though the prices for our gas customers has come down," National Grid spokeswoman Mary-Leah Assad said. "The capacity restrictions to electricity providers is still there." The answer To relieve pipeline constraints, the natural gas transmission companies want to expand or add new lines, including the Kinder Morgan pipeline and Access Northeast Project, which has received funding from Eversource and National Grid. Access Northeast would route a pipe- line through Rhode Island and Connecticut into Massachusetts. The project is projected to save $1 billion every winter by allowing more power plants to run on natural gas, said Durand. "It's to stabilize electrical supply pric- es… but also on the gas heating and cooking side," Assad said. "We need additional natural gas to serve the addi- tional demand." This will also stabilize energy in the region when combined with other ener- gy sources, such as liquid natural gas and transmission of alternative energy, Blomberg said. "ISO is concerned about it from a reliability perspective. We administer the markets, so we don't project prices. Our number one responsibility is keeping the lights on in New England," she said. n Massachusetts relies heavily on natural gas for electricity production. This chart shows the close connection between wholesale electricity and natural gas prices. July 2008 Winter 2012/13 Winter 2013/14 Source: ISO New England

• Cover