Protecting the New Hampshire Advantage

Market Opportunities & Economic Stability

Tennessee Gas Pipelines’ proposed NED Project will provide New Hampshire with additional access to lower cost, clean, abundant and domestic natural gas supplies enabling the development of gas distribution systems to serve communities and industries where natural gas is not available today. The availability of a low cost energy source is critical to attracting new industries, which can bring jobs and economic growth to the state. Conversely, lower cost natural gas is also critical in keeping existing industries in New Hampshire and their associated jobs either from conversion from higher cost fuels to natural gas or lowered electricity rates pursuant to power plants converting to lower cost natural gas. As reflected in the map below, natural gas service is currently not available in most areas of New Hampshire. Because of its close proximity, the NED New Hampshire pipeline would provide the opportunity for gas service to some of the following towns: Keene, Swanzey, Rindge, Jaffrey, Amherst, and New Ipswich among others.

Since fuel oil is currently one of the primary fuels used to heat New Hampshire homes, residents would greatly benefit from the cost advantage of natural gas. For example, Liberty Utilities has stated, “An average residential customer who switches to natural gas from a competing fuel could potentially save 40% on their heating bills. The availability of low cost natural gas will attract new business and encourage existing businesses to expand in the state.”

A large scale pipeline expansion like NED is required to lower energy prices in the region, benefiting families and businesses across New Hampshire. New England gas prices in the winter of 2014 were the highest in the nation, a direct result of natural gas transportation constraints caused by insufficient pipeline infrastructure in New England causing consumers in the region to spend at least $3 billion dollars for electricity. This amount paid by New England consumers for electricity would cover the cost of the additional pipeline infrastructure needed to reduce energy prices in just one year and would more economically meet the energy needs of the region for years to come.

The Price of a Gas Shortage

Despite abundant natural gas resources in the Marcellus shale region, there is a lack of pipeline capacity to get the gas from the region to markets in the northeast. This lack of capacity and readily available gas has resulted in natural gas prices in northeast cities like Boston and New York to be disproportionately higher than the rest of the country. The below chart from the US Energy Information Administration demonstrates how the price of natural gas in New York City (the “Transco Zone 6 NY” gas center), and Boston (the “Algonquin Citygate” gas center) is much higher than the US average (the “Henry Hub” rate).

Granite Staters paid over $16 per MMBtu for natural gas in the winter of 2013-2014, while most Americans paid less than $4 per MMBtu. Even with a milder winter this year, Granite Staters stilled paid an average of three times more for natural gas than the rest of the country. The NED Project aims to address this shortage and price difference by increasing the supply of gas to the region. The NED Project could The NED Project could significantly reduce the current pipeline capacity deficit of 2.1 Bcf per day, leaving just a .35 Bcf per day deficit when Canadian supply disappears (but not accounting for expected growth in natural gas demand). Furthermore, the NED Project would greatly diminish the likelihood that further oil and coal plant retirements and additional extreme winters would create a return to the destructive energy markets of 2013-15. The New England economy needs stability and certainty in pricing and supply.

Power Plants

TGP currently serves Granite Ridge Energy, a 734 MW combined cycle natural gas power plant, located in Londonderry, New Hampshire. NED would provide additional opportunities for new and existing natural gas fired generation facilities to take advantage of abundant, low cost natural gas supplies and to replace coal, oil and nuclear generation that is being retired in New England, which will increase the reliability of the electric grid. In addition to NED lowering natural gas prices, it will also lower electric prices since 52% of the New England electric grid is currently fueled by natural gas.

LNG/CNG Expansion Opportunities

TGP has received inquiries from developers of Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) fueling stations facilities proposed in New Hampshire. In addition, TGP has received inquiries from “CNG virtual pipeline” developers that utilize high capacity CNG delivery trailers designed to deliver natural gas to communities and businesses that are not located close to an interstate pipeline or distribution system. Some businesses and institutions, such as medical centers and universities, are opting for natural gas delivered by truck to meet energy needs at a more competitive price.

TGP currently serves Clean Energy, a Compressed Natural Gas fueling station (CNG) in Pembroke, New Hampshire. The use of LNG to supplant liquid fuels such as diesel and propane is making rapid inroads in the nation’s transportation industry. NED would provide more opportunities for the development of these types of facilities to fuel vehicles, including heavy-duty commercial fleets in New Hampshire with a cleaner, more environmentally friendly energy source.

Natural gas fuel costs up to $1.50 less per gallon than gasoline or diesel, depending on local market conditions. Natural gas fuel reduces operating costs for vehicles, and also reduces greenhouse gas emissions up to 30% in light-duty vehicles and 23% in medium to heavy-duty vehicles. NED would enable the development of more CNG and LNG facilities in New Hampshire, and residents and businesses could realize the economic benefits of a less expensive fuel source for transportation.

New Hampshire Local Distribution Companies

Liberty Utilities (EnergyNorth) is an Anchor Shipper on NED. NED provides Liberty with access to additional gas to meet their growth needs and the opportunity to expand their distribution system and convert more residences and businesses to a, cleaner more environmentally friendly fuel. In addition, there will be considerable savings for Liberty customers, who will be able to access abundant, lower cost natural gas. NED will also provide Unitil (Northern Utilities) the opportunity to meet their growth needs and the opportunity to expand their distribution systems.

New Hampshire Gas Corp., which is owned by Liberty Utilities, serves approximately 1,142 customers in Keene, NH with propane air gas. NED would provide the opportunity for this franchise to expand into natural gas service and serve more customers in the area.