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September 18th, 2013:

With Natural Gas Supplies Squeezed, Prices Will Be Volatile in New England

American Energy Coalition - September 18th, 2013

New England is overly reliant on natural gas and has limited access to supply, which causes prices to spike to 800 or 900 percent higher than the rest of the country, according to a municipal utility official quoted in a Springfield Republican article

Daniel Howard, General Manager of Westfield Gas & Electric, in Westfield, Mass., said those price spikes can drain the wallets of energy consumers. In Holyoke, Mass., James Lavelle, general manger Holyoke Gas & Electric, said the problem hits every natural gas customer in the region. “You have a lot of heating demand and a lot of electricity demand,” Lavelle told the newspaper. 

The situation is made worse by the region’s reliance on natural gas for electrical generation. Today, 51 percent of New England’s power comes from natural gas up from 30 percent in 2001, according to a recent report from the U.S. Energy Information Agency. The closure of Vermont Yankee nuclear power station and its 620 megawatts of power-generating capability will only make the region more dependent on natural gas.

The EIA’s report says that during peak heating days in winter natural gas can average $6 more per million BTU at Boston than closer to the source in New York City. The futures market indicates that that differential will grow to $8 per million BTU in winters of 2013-14 and 2014-15 once Vermont Yankee closes, according to the article.

“The reason is that there just is not enough room in the pipelines servicing New England to deal with demand now that natural gas is the fuel of choice for electrical generation,” the article states. “It’s an awful soup,” said Barbara Kates-Garnick, a state undersecretary for energy. “And it affects every city and town in the state.”

To read the Springfield Republican article, click here.

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