Utilities in New England have announced electricity rates hikes on the order of 30 percent to 50 percent, making prices some of the highest in the history of the continental United States, according to a recent article by National Public Radio (NPR).
These changes appear to have come out of nowhere to consumers, but in reality, they have been a long time coming, according to NPR. “Between the years of 2000 and 2013, New England went from getting 15 percent of its energy from natural gas to 46 percent,” the article states. “ That’s dozens of power plants getting built. But the pipelines to supply those power plants? Not so much.”
In addition to the increased reliance on natural gas for electricity, the region is also becoming more reliant on natural gas for heating. “So now when it gets cold and everyone turns on their heat, the pipelines connecting New England to the Marcellus Shale are maxed out,” NPR wrote.
“New England, this winter, based on what’s been recently trading, is likely to have the highest natural gas prices on planet Earth,” Taff Tschamler, chief operating officer of energy supplier North American Power, told NPR. Gas for January delivery is trading at nearly $19 per million BTUs, according to NPR. Gas in Japan, which relies entirely on imported gas and often has the world’s highest prices, is forecast to cost less than $18 this winter.
Big pipelines in New England are on the drawing board, but they won't be built until 2018 at the earliest — and that’s only if they don't get swamped by local opposition.
The environmental community is weighing in on the question, too. Peter Shattuck with Environment Northeast put out a paper arguing the region could save money by using less power. “If demand for gas remains low, because of things like energy efficiency, distributed generation, renewable heating technologies like heat pumps and biomass, we may not need any infrastructure overall,” he wrote.
So while it’s certain that some pipelines will get built, the big question is how much additional capacity, and who will pay, according to NPR. A plan from the six New England governors to subsidize bigger pipes was tabled recently when Massachusetts announced it wanted to study the question further before committing.
To read the National Public Radio article, click here.