New England’s governors have committed to work together to craft an energy future for the region that recognizes the six states can lower energy prices and clean up the region’s energy mix more effectively if they work together.
That’s encouraging news for Maine residents faced with some of the highest electric and heating bills in the nation. It’s also unprecedented for the region’s leaders to work together in a strategic manner on such a range of energy infrastructure issues.
So far, it’s only a statement of cooperation among the governors of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont, but it’s a promising sign Maine won’t go it alone in taking on significant energy issues that are regional in nature.
What’s notable about the regional pledge to cooperate is that each New England state has something the others want.
Maine Gov. Paul LePage, a Republican, wants access to more natural gas in Maine and New England, a region with the nation’s highest average gas prices and access to more large-scale Canadian hydropower.
Connecticut and Massachusetts, led by Democratic governors, have proximity to one of the cheapest natural gas resources in the nation, the Marcellus Shale in Pennsylvania and New York, and sit along natural gas pipeline routes that need to be expanded in order to ease congestion and lower New England’s natural gas prices — especially on high-demand winter and summer days. Both states also are interested in Canadian hydropower. And both states have aggressive renewable energy standards that are driving growing demand for renewable energy.
Maine is home to a growing supply of that renewable energy, in the form of onshore — and, perhaps, ultimately, offshore — wind energy. Also, Maine, along with New Hampshire and Vermont, sit along the routes that will be critical for transmitting wind and hydro power to the places that need it.
There’s a role for each state to play in the region’s energy future. There’s also a role for all states to play, together, to ease the region’s high natural gas prices.
New England has a proven demand for natural gas for electricity generation and home heating. But the pipeline infrastructure serving the region isn’t expansive enough to allow New England to take advantage of the same low gas prices that other regions have enjoyed. Cooperation among the six New England states can change that.
A handful of pipeline expansion projects are in the works in New England, but they’ve struggled to take off quickly and enlist subscribers — entities that commit to holding pipeline capacity before the pipeline is even constructed.
Local natural gas utilities that distribute gas to homes for heating often sign up for pipeline capacity, but their demand hasn’t been enough to spark a wave of pipeline construction in the region. The companies extracting natural gas also could buy capacity to ensure an avenue for their gas to get to gas-hungry New England customers, but they’re more tempted by the higher prices they can reap for gas by exporting it. As a result, producers extracting gas from the Marcellus Shale are more interested in developing pipelines to carry their gas to export terminals.
In New England, gas-fired electricity generators could sign up for natural gas pipeline capacity, providing developers with the demand they need to seek federal approval for their projects. But the way generators are paid provides them no incentive to hold long-term capacity. That’s something the six New England states could change, by directing the regional electric grid operator, ISO New England, to restructure the generators’ payment system to allow them to hold onto pipeline capacity.
The six New England states themselves also could buy pipeline capacity. A Maine law passed this spring allows the state to impose an assessment on ratepayers to buy pipeline capacity. But we would prefer to see the New England governors tell ISO New England to change the way it pays generators before having ratepayers directly foot the bill for new pipeline.
As lawmakers last spring debated the measure allowing Maine to buy pipeline capacity through an assessment on ratepayers, we feared the prospect that Maine on its own was attempting to solve a complicated regional energy dilemma.
While we don’t yet know what natural gas solution the six New England governors ultimately will recommend, we’re pleased to see the regional approach to solving this problem.