Tennessee Gas Pipeline Company Files Historic Natural Gas Capacity Proposal to Benefit the State of Maine and its Consumers
Tennessee Gas Pipeline Company (TGP), a Kinder Morgan Energy Partners, L.P. company, today filed a proposal with the Maine Public Utilities Commission offering the State of Maine a long-term contract for natural gas pipeline capacity with the goal of lowering overall energy costs for Maine consumers.
“We are thrilled to be able to offer the State of Maine a contract for capacity on TGP’s proposed Northeast Energy Direct Project that will bring needed natural gas to New England and support both gas and electric reliability. We hope our proposal will help the Commission obtain the greatest possible benefit for Maine from the ongoing Commission proceeding,” said Kimberly S. Watson, president, East Region Natural Gas Pipelines for Kinder Morgan. “We believe this is an historic opportunity for Maine, and we at Kinder Morgan admire the combined efforts of the governor, legislature and others to try to lower the overall energy costs to Maine families and businesses. As a company that has served markets in New England safely and reliably for many decades, TGP is delighted to have the opportunity to help Maine and its consumers achieve their goals.”
TGP previously announced an agreement with multiple local gas distribution companies across New England for approximately 500,000 dekatherms per day of capacity (roughly equivalent to 500 million cubic feet per day) on TGP’s Northeast Energy Direct project for the needs of those particular companies. Negotiations continue with other potential customers and shippers.
The Maine Public Utilities Commission has authority to execute an Energy Cost Reduction Contract under the Maine Energy Cost Reduction Act, which authorizes the Maine PUC to purchase up to 200 million cubic feet per day of pipeline capacity for up to 20 years, subject to satisfying certain conditions. TGP’s proposal is being filed in response to a proceeding the Commission opened in March 2014 to implement its authority. During the proceeding, the Commission has encouraged the filing of gas pipeline capacity proposals at any time in the proceeding to assist in the refinement of the Commission’s analyses.
“We have offered Maine a set of agreements, quite standard in our industry, that provide for flexibility and, importantly, the avoidance of any costs to Maine before the pipeline is in operation and the benefits for Maine may be realized,” continued Watson. “Recent testimony and studies before the Maine Public Utilities Commission shows that the savings of Maine electricity consumers would exceed the annual cost to Maine of the purchase of pipeline capacity.”
Analyses by ISO-New England, the regional grid operator, have shown that New England energy consumers are paying huge premiums for gas and electricity because of a lack of incremental natural gas pipeline capacity into New England from the south. Last winter, for example, New Englanders spent approximately $3 billion more for electricity than they would have if sufficient pipeline capacity had been available.
“Our project is scalable,” said Watson, “up to 2.2 billion cubic feet of gas per day, an amount that would virtually eliminate the shortages that make gas and electricity so expensive in New England in the winter. With this project fully developed, Maine and New England would pay gas and electricity costs roughly similar to most of the rest of the nation.
“Although a regional effort among the six New England governors to arrange for large regional purchases of gas pipeline capacity has stalled, this contract, which benefits the state of Maine, will fit seamlessly with the commendable regional effort of the governors. We hope that effort continues,” said Watson. “We all continue to work so that New England can be certain of competitively priced and reliable electricity in the winters of the future. The Northeast Energy Direct Project seeks to accomplish that.”
Watson added, “We’ve been pleased by the acceptance of our initiative by customers and shippers and the public, whose budgets are strained by cold winters. As an example, a recent poll by the Boston Globe indicated that a majority of Massachusetts’ citizens, 52 percent, said they favor expansion of a natural gas pipeline in Massachusetts from western Massachusetts to Dracut. Their responses show that ratepayers in New England recognize the importance of lower energy costs and cleaner air.”
Separately, on Sept. 15, 2014, TGP filed a letter at the Federal Energy Regulatory Commission (FERC) requesting to use FERC’s pre-filing procedures for the proposed Northeast Energy Direct Project. During the pre-filing process, TGP will engage with FERC staff and interested stakeholders to refine the proposed route and draft the Environmental Report that will accompany its FERC certificate application, which TGP expects to file in September 2015. This initial FERC filing begins the regulatory process for the Project and moves it to the next level for authorization to build. TGP is committed to New England and its customers to provide reliable pipeline transportation into the region as soon as possible and this action will help insure new pipeline infrastructure into New England during the winter of 2018.
Kinder Morgan Energy Partners, L.P. (NYSE:KMP) is a leading pipeline transportation and energy storage company and one of the largest publicly traded pipeline limited partnerships in America. It owns an interest in or operates approximately 54,000 miles of pipelines and 180 terminals. The general partner of KMP is owned by Kinder Morgan, Inc. (NYSE:KMI) . Kinder Morgan is the largest midstream and the third largest energy company in North America with a combined enterprise value of approximately $125 billion. It owns an interest in or operates approximately 80,000 miles of pipelines and 180 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals and handle such products as ethanol, coal, petroleum coke and steel. KMI owns the general partner interests of KMP and El Paso Pipeline Partners, L.P. (NYSE:EPB) , along with limited partner interests in KMP, Kinder Morgan Management, LLC (NYSE:KMR) and EPB. For more information please visit www.kindermorgan.com.
This news release includes forward-looking statements. These forward-looking statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management, based on information currently available to them. Although Kinder Morgan believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance that such assumptions will materialize. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include those enumerated in Kinder Morgan’s reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they were made, and except to the extent required by law, Kinder Morgan undertakes no obligation to update or review any forward-looking statement because of new information, future events or other factors. Because of these uncertainties, readers should not place undue reliance on these forward-looking statements.
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