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Natural Gas Consumption and Cost in New Hampshire

Natural Gas Consumption and Cost in New Hampshire. Presented to the New Hampshire House Science, Technology and Energy Committee. April 9, 2015. Hamza Abbasi, Maggie Fiertz, and Mark Sheridan. Overview of Presentation. Recent Trends Overview of Natural Gas and Energy Demand

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Natural Gas Consumption and Cost in New Hampshire

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  1. Natural Gas Consumption and Cost in New Hampshire Presented to the New Hampshire House Science, Technology and Energy Committee April 9, 2015 Hamza Abbasi, Maggie Fiertz, and Mark Sheridan The contents of this report were developed under grant P116B100070 from the U.S. Department of Education. However, these contents do not necessarily represent the policy of the U.S. Department of Education, and you should not assume endorsement by the Federal Government.

  2. Overview of Presentation • Recent Trends • Overview of Natural Gas and Energy Demand • Energy in New Hampshire • Options for Reducing Constraints on Natural Gas Capacity • Energy Policy in New England • Conclusion

  3. Recent Trends in Natural Gas Use

  4. Recent Trends: New England • Natural gas consumption likely to continue to increase • Closure of Vermont Yankee, Salem Harbor and Brayton Point coal plants • New Hampshire less dependent on natural gas than other NE states

  5. Overview of Natural Gas • Fossil Fuel • Cleaner burning than coal • Still contributes to climate change, has other environmental impacts

  6. Overview of Energy Demand • Peak Demand • Demand is based on the highest capacity required during the given billing period • Peak period refers to when demand for electricity is at its highest • Energy Constraints • Imported energy resources • Pipeline limitations

  7. Energy in New Hampshire

  8. Energy Goals in New Hampshire • 25% renewables by 2025 • Only 16% renewables in 2013 • Natural gas cleaner than other fossil fuels, but not a renewable source • Important to evaluate New Hampshire’s energy future - role of natural gas, renewable energy

  9. Situation in New Hampshire • Winter of 2014: demand skyrocketed due to extreme temperature drops • Electricity prices briefly shot up to $1,290 per megawatt hour compared to a yearlong average of $36 per megawatt hour due to shortages • Winter 2015: defied expectations • Worldwide prices have dropped

  10. Options for Reducing Constraints on Natural Gas Capacity • Energy Efficiency • New England states lead the nation in energy efficiency, but New Hampshire lags behind • Many programs have specifically targeted natural gas utilities • Improved energy efficiency could help NH immediately reduce constraints on natural gas capacity

  11. Options for Reducing Constraints on Natural Gas Capacity • Improving existing natural gas infrastructure • New England has old infrastructure and highest leakage rates • Few incentives in place to reduce leakage • States that have passed legislation have very low leakage rates

  12. Energy Policy in New England • NEGC/ECP • Emission reduction: “20% by 2025” • Renewable energy sources and more efficient fuels

  13. State by State Emission Reduction • Maine - 2003 emission reduction goals • Department of Environmental Protection to create a Climate Action Plan (CAP) • Massachusetts - Climate Protection Plan - 2004 • 2008 Global Warming Solutions Act - 80 percent by 2050 • Rhode Island • Inter‐agency Greenhouse Gas Stakeholder Project in 2001 • Connecticut - statewide Climate Action Plan in 2004 • Increase the amount and accessibility of electricity generated by renewable fuels. • Natural Gas = bridge fuel • Vermont • Governors’ Commission on Climate Change in December 2005

  14. Natural Gas Specific New England State Legislation- Maine • 2012 - “An Act to Expand the Availability of Natural Gas to Maine Residents” • Finance Authority of Maine to issue bonds for energy distribution system projects • Applicant contributes at least 25% of the expected cost • 2013 - Maine Energy Cost Reduction Authority Bill - did NOT pass • Entering into contracts to procure and resell natural gas pipeline capacity and for pipeline corridors

  15. Natural Gas Specific State Legislation- Massachusetts • Focus on environmental safety and efficiency of natural gas • 2014 - requires utilities to improve their gas leak inspection protocols and establish a timeline for fixing all hazardous leaks

  16. Natural Gas Specific State Legislation- Vermont • 2012 - First state to ban hydraulic fracturing to extract oil or natural gas.

  17. Natural Gas Specific State Legislation- Rhode Island • 2014 - promote a regional six-state effort • Two main plans: • Bringing hydropower to the New England states • Increasing supplies of natural gas to address the fact that the region is being serviced by pipelines that are at or near capacity

  18. Natural Gas Specific State Legislation- Connecticut • 2013 - Passed legislation expanding Connecticut’s natural gas distribution system • Companies have filed a proposal with state regulators outlining plans to connect 280,000 customers over 10 years • Future possibility: ban on storing or recycling wastewater?

  19. NESCOE Report • Examined natural gas in New England in the period 2014-2029 • Base and high demand scenarios, New England could face high costs due to capacity constraints—recommend cross-regional pipeline   • Low demand scenario, no new infrastructure needed

  20. Conclusion • Major shifts in New Hampshire’s energy mix in the past decade • Pipeline infrastructure has not kept pace • Short-term and long-term options to reduce infrastructure constraints • Key to reduce vulnerability to price volatility

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