Natural Gas: The bridge (fuel) to nowhere for New England

I wrote this back in late June.  So much has changed.  The NH PUC is advising against divestiture of Eversource's generating assets and for imposing a tariff on electric ratepayers to build out natural gas infrastructure.

But, here' how it looked back in June.  The link is a result of the lobbying efforts mentioned below.  http://www.usnews.com/news/articles/2015/09/10/bill-to-reverse-ban-on-us-oil-exports-advances-in-house
And here is a link that lists the status and co-sponsors of SB 1312
https://www.congress.gov/bill/114th-congress/senate-bill/1312/cosponsors

This is NOT a partisan issue.  There's no "liberal" versus "conservative" view.  President Obama is pushing the fossil fuel agenda for increased drilling, fracking, pipelines and export at the same time that he supports the EPA's Clean Power Plan.  Keystone XL is temporarily stopped, but only because of the terrible optics of the tar sands and the devastating spills from their pipelines.  New drilling is being allowed in the arctic on President Obama's watch...even as climate scientists note it is thawing even faster than expected.
On a conference call sponsored by the US Chamber of Commerce, Senator Murkowski of Alaska assured the audience that if Senate Bill 1312 passes both chambers, they expect President Obama's support.  That bill lifts the export ban on crude oil exports which have been in effect since the 1970s.
Among other things, the Chamber claims that exporting crude oil on the world market will lower prices at the gasoline pump.  To whose benefit?  The Energy Information Administration reports that exporting at the levels suggested will raise prices at the pump.  But, the Chamber isn't listening to them. 
Look for a big push on exports over the 4th of July and August recesses.  The Chamber is sending out marching orders to all their member Chambers on how to create a "grassroots" surge in support of exports.  Supporting exports also means supporting pipeline infrastructure. 
The other drumbeat being sounded is "strengthening" foreign policy and providing an alternative to fossil fuels from Russia and/or Iran.  Senator Murkowski calls the lifting of sanctions on Iran's oil exports an affront to American businesses which have had a ban in place for more than 40 years.  She argues that if they lift the ban on Iran, they should lift the ban on American exports. 
In a June 25, 2015 article by Keith Johnson for Foreign Policy Magazine, the dysfunctional nature of relationships between members of the energy sector can be demonstrated in two paragraphs.  Despite the Chamber's arguments that exporting oil will lower energy prices, this first paragraph shows exactly why the industry is dying to ramp up exports.
"The prospect of an end to sanctions, which have targeted Iran’s energy sector and have sharply curtailed oil exports, have raised hopes inside the country and fears without that the long-shunned Persian giant will storm back onto global energy markets. Other oil producers inside OPEC — as well as U.S. oil producers working in the shale patch — fear that quick sanctions relief could unleash a glut of Iranian oil, which would push already low prices down even further."  (Bold and underlined emphasis is mine.)
And, how is this loyalty from the Chamber rewarded by the big oil giants?
" In early June, international firms including Shell, BP, Total, and Eni expressed interest in pouring money into Iran’s oil and gas fields as soon as sanctions are lifted. After meeting Iranian energy officials in Vienna this month, Shell’s boss told Bloomberg that Iran is a “wonderful country with a fantastic resource base”; Total’s chief simply declared, “We like Iran.” Shell has also trekked to Tehran to talk business. Iranian officials themselves are even courting U.S. firms, which unlike their European rivals, have kept Iran at arm’s length so far."
Needless to say, there was no discussion of the impact such exports and enthusiastic extraction will have on climate change during the Chamber conference call.
If we really wanted to help countries like Poland, we would be exporting renewable technology and supporting capital investment in storage and energy efficiency.  That's what would make sense for everyone; except the oil and gas industry, of course.
In New Hampshire, Democratic Representative Howard Moffett (Hills 07) has submitted testimony in support of building natural gas pipeline infrastructure in the NH Public Utilities Commission (PUC) Docket IR 15-124.  He joins three of the four NH utilities, the Business Industry Association, BAE Systems, and the front group for Kinder Morgan, the Coalition to Lower Energy Costs (CLEC).
Have you seen the television commercials pushing the pipeline projects?  The disclosure says it's paid for by CLEC, but Kinder Morgan is a major donor to the organization which formed in November of 2014.
The Kinder Morgan propaganda campaign is in full swing and in addition to running ads, KM is joining all the local and state level chambers of commerce.  They sponsored "The Best of New Hampshire" celebration and "The Granite State Music Festival" this year.
Good.  I hope all this propaganda will make people throughout the State of New Hampshire start paying attention to these projects and what they mean for our future.
The television ad makes two major assertions that are not factual:
1.) Bringing more fracked gas to New England will lower our energy costs
and
2.) We need these plants so that we can shut down the "dirty" nuclear and coal plants.  In other words, natural gas is the "bridge" to some far off future when renewable energy is cost effective.

The first claim to bring cheaper energy to New Hampshire with additional pipeline capacity seems reasonable on its face.  More supply brings lower prices, right?  Should be a "no brainer" until you examine the true situation.

Here are the basics.  NE has pipeline capacity of about 3.4 BCF/day.  Electric generation requires about 1 BCF/day year round.  During the winter months, on about 40 days, for a few hours, heating demand for the pipeline soars to 100% of capacity and this pushes up the price for natural gas for electric generation which is purchased on the "spot market" without long term contracts for reserving capacity. During these times they can use LNG and some have the capability to burn oil as well. 

For eight months out of the year, New England has plenty of pipeline capacity.  Electricity prices during those eight months are as low as natural gas generators can make them.  In fact, during the summer months, the shortfall that requires some oil and coal plants going online comes from not having enough generators.  So, if you think you're going to get electricity for several pennies less per KWH, think again.  All the gas we could possibly use would only help during four months of the year.  Based on the difference between the January and July default utility prices, an average bill in NH during plentiful summer gas capacity will save the average residential customer about $6 on a monthly bill.  So, for example, we could argue that the annual cost to residential customers with default service from Eversource is $36 (since prices are set twice per year) because of constrained pipelines.

One could ask why the electric power generators don't reserve capacity just the way the gas/heating utilities do.  Why aren't they buying pipeline capacity and committing to long term contracts?

The New England Power Generators Association (NEPGA) has argued that the market problem caused by too little generating diversity is already being addressed with the Pay for Performance program and building/converting dual oil/gas generating plants.  They point out that the first BCF/day will produce most of the savings and that projects set to come online in 2016 (AIM and C2C) should address the biggest spikes in price.  They caution the NH PUC to wait for the market to respond before launching into an infrastructure project that will prove burdensome to ratepayers.

So, because NEPGA won't commit to reserving capacity, three of the four utilities and some politicians have decided that the ratepayers should commit to those long term contracts.  Why not?  There's no risk to them and, like the Scrubber on the Merrimack Coal Plant, they make a 10% profit and we pick up any losses.

Here we are, just finishing the settlement agreement for Eversource to divest of all it's generating assets, and we're being asked to pick up new obligations.  The settlement agreement is probably a good idea, but the Large Commercial and Industrial customers will bear a lighter burden of the settlement costs ($100s of Millions) than Small Commercial and Residential customers.  This is in part because there was a lawsuit by business customers over the cost overruns on the Scrubber.

Commissioner "603"

I spent an hour and a half listening to the July 2nd Executive Council confirmation hearing of Kate Bailey as the newest New Hampshire Public Utilities  Commissioner yesterday.  You can hear it here: http://sos.nh.gov/GCHearings.aspx  I suggest opening the link in Internet Explorer.  I couldn't get the player to launch in other browsers.
Here is my favorite story from the hearing.  It was told in response to a question for Ms. Bailey about her proudest accomplishment while working for the PUC.
Some years ago, the PUC was asked to come up with a plan for adding at least one more area code for New Hampshire.  Everyone was very concerned because it meant businesses would all have to get new letterhead and most people would not be happy dialing a 10 digit number to call in state.
Kate Bailey looked at the issue differently.  She's an engineer, after all.  Engineers are trained to ask questions.  Kate Bailey wondered why on earth we needed additional area codes.  A 10 digit number should allow for 10 billion phone numbers!  New Hampshire has about 1.3 million people. 
She found out that when a new company set up an account in New Hampshire, the phone companies were reserving blocks of 10,000 numbers at a time!  Kate called the agency that was in charge of number assignments and asked if those reservations couldn't be cut back to 1000 at a time.  After much arguing back and forth, they finally agreed. 
So, today, when you see "The 603" on a t-shirt or hear it in the lyrics of a song (Super Secret Project), you can thank Ms. Bailey for using logic to help prevent the loss of a New Hampshire icon.
Of course, as someone very concerned about pipeline projects that are set to double the amount of natural gas flowing into New England to address a problem that occurs for a few days during the winter, I listened to the hearing with great interest.
Overall, I really liked what I heard.  She is articulate, prepared, and intelligent. 
There was really only one area of concern.  One of the people testifying in support of her appointment was Attorney Susan Geiger, who is currently representing Kinder Morgan through the law firm, Orr & Reno.  
Given that the Governor nominated Ms. Bailey and the lead attorney for Kinder Morgan endorsed her, it would be naive not to feel concern. 
Will Ms. Bailey lives up to her "proudest moment" in her new position?  Let's hope that she can see that doubling the amount of natural gas into New England is like adding area codes to our little state; it's illogical, will lead to stranded costs for ratepayers, and likely to wreck the identity of the entire southern tier of New Hampshire.  

Pipeline Manifesto - Serendipity - WIP

If you are reading this, you are probably already convinced that the NED pipeline project is a bad idea.   Most of you are concerned about the degradation of our ecosystems, safety, leaks, and damage to our groundwater and aquifers from blasting through the "Granite State."
You would think that people in other parts of the State would empathize with you.  You would expect outrage and a willingness to jump in to help when it is SO clear to us that the project is about corporate gain; not public convenience and necessity.
A poll by UNH showed that only 16% of respondents were familiar or very familiar with the NED pipeline project and among all respondents, only a small margin viewed it unfavorably.
How could nearly half the people favor the project? 
MONEY
I wish WMUR would offer to run a PSA in response to the ad by the "Coalition to Lower Energy Costs."
The ad promises to reduce electricity and heating costs by building more pipelines.  This is speculative at best.  NY, which has plenty of pipelines and cheap gas, has electricity prices very close to our own.  Also, we have plenty of gas in the summer, so we already know what our lowest prices will be.  Oh, well except that we will be paying a new "reservation" fee on top of gas and transportation costs.  That fee is part of the debate over a pipeline tariff for ratepayers.  The utilities (3 of 4 in NH) want permission to pass onto electric customers the fee for reserving capacity on these pipelines.  If the utilities are able to sell that capacity to power generators, the customers will be reimbursed.  But what if the fee makes the gas more expensive for the power generators than just buying on the spot market as they do today?  In fact, the New England Power Generators Association is so against this idea that they have NOT backed it at all.  Originally the utilities wanted the power generators to pay the reservation fees.  They weren't having it.  They are building and converting to dual fuel (oil and natural gas) generating plants so that they have price protections when natural gas prices soar.  Fuel diversity is very important to  sustainable pricing and reliability.  The NEPGA is concerned about over reliance on natural gas.  And we should be too.  I'll go into why we shouldn't trust the judgement of these utilities in another installment, but for now, let's just take a practical approach to paying less for electricity.

I can help people reduce their electric bills TODAY.

There are two actions people can take to reduce their electricity costs.

 1.) Go to the PUC Website http://www.puc.nh.gov/Consumer/consumer.htm and shop for an independent  supplier.  This winter my average bill was $58/month with Coal Free eNH Power.  The rate I pay is about 8 cents/KWh and was locked in for 20 months.  Right now, Fairpoint Energy is offering a 6 month contract for 100% Wind energy for less than 9 cents/KWh.  The only drawback is that you do have to pay attention and shop around before your contract is up to get the best price and not get dumped back into the utility default rate when the contract ends.
Only about 25% of residential electric customers have made the switch to an independent supplier.  75% of customers are paying non-competitive or default rates from the utilities!  If enough of us switched to 100% renewable energy from a competitive supplier, it would send a strong message to the utilities and the markets about what we want to support.

Consider it like a local version of the divestment movement at colleges.  The utilities are the ones pushing these pipelines.  Let's push back!

2.) All of the utilities and independent suppliers seem to have special energy efficiency programs.  Also, you can go to NHSAVES.com to take advantage of state level programs.  Get an energy audit and find out what programs you are eligible for to help save energy.  Again, having a large number of people suddenly asking for help would signal the utilities and markets that we are serious about the direction we want to go instead of building more fossil fuel infrastructure.

These two actions and all the publicity we can give them would pack the kind of punch that would get people really excited and wake up other people in the State who are only likely to be moved by money.

Oh!  And when you start saving money, please consider donating some of it to PLAN NE to help fight the pipelines.

Next Day:
Serendipity.  Solar City came to see my neighbor about installing a leased solar PV system on his roof tonight.  He sent the consultant over to see me when they finished talking.  I was really interested in chatting with him about it as I've noticed that companies like SolarCity haven't been working in New Hampshire the way they do in Massachusetts and Vermont. 
I did look into buying a solar PV system a few years ago, but because we don't pay enough in taxes, we can't really take advantage of the federal tax credit.  Also, my electric bill tops out at about $58/month, so it would take a long time to reach a payback on the system.  When I looked into financing the system at the bank, they wanted collateral.  They won't accept the avoided costs as security on the loan.
What SolarCity does is install the system on your roof at no expense to you and then guarantees you a fixed contract for electricity rates.  They promise you will save 30% compared with the Eversource Default rate.
I need to look a little deeper into this and am waiting for a proposal for my own house, but it sounds like a great solution for someone who is prepared to pay extra for renewable energy from a competitive supplier.
If you can afford to buy a solar PV system yourself and can take advantage of the tax credits, you should go for it, but for my situation, a lease is a great option.
What came next is the Serendipity part.  It turns out that if you get a system installed, for every person you refer who also installs a system, you receive $250.  There's more to this deal that makes it even sweeter, but it gave me a terrific idea for fighting the pipeline.  For every person who signs up for SolarCity because of the pipeline, we could stipulate that the $250 go to the PLAN NE legal defense fund.  That will be who referred us.
I talked the solar consultant into coming to the pipeline opposition meeting tonight where he was welcomed to give a brief presentation.  What a great fundraiser this could be for us!
It just tickles me to think that we could actually fight back in a meaningful way that might give us the funds for lawyers and to run our own commercials!

Is your electric bill too high?

My electric bill last month was $58.58.  I don't think that's unreasonable.  I saw no increase in my bills this winter because I buy my electricity through eNH Power and had a 20 month contract for coal free electricity at 8.7 cents per KWH.  

Did you know that only 50% of Residential Customers have taken advantage of deregulation to buy their electricity from competitive suppliers?  You can learn about suppliers at the PUC website.  http://www.puc.nh.gov/Consumer/Residential%20Suppliers.html  The deals aren't very good right now, though Fairpoint has an 8 month fixed contract for 100% renewable energy for about 9 cents per KWh.  The prices will get better later this year, so don't rush into a purchase right now.  The other thing that helps me keep my bill low is that most of our appliances and lights are energy efficient and we use motion detector LED nightlights on our stairs and in hallways. 
The cheapest electricity are the KWh you don't use.  Visit NHSAVES.org for tips on how to conserve energy and consider signing up for an energy audit.
As a matter of full disclosure; I am opposed to the building of significant Natural Gas infrastructure in New Hampshire.  Because of that, I have been accused of "Wanting people to pay more for electricity," or being a "greenie liberal."  I think otherwise.  I think that helping people conserve energy and invest in tomorrow's technology is a true Conservative value.  Former Congressman Charlie Bass agrees with me on this subject: http://www.sentinelsource.com/opinion/columnists/guest/undoing-key-laws-to-preserve-energy-is-a-bad-move/article_b2698970-7c1d-5f46-89a3-14f7beef1c6f.html
So does the US Military:  http://www.theburdenfilm.com/

Sticker Shock?

Many people have written about the pros and cons of building the Kinder Morgan Tennessee Gas Pipeline known as Northeast Direct or NED.  Our Governor, in her inaugural address on Thursday talked about bringing more affordable electricity prices to New England because of better access to Natural Gas.  She didn't mention the NED project explicitly, but we can assume that she had it in mind.
I have a question.
What's the plan? 
Building a transmission pipeline and claiming it will deliver cheaper electricity is like promising a new car and then showing the customer four tires.  What's the price for the rest of the car?  What does it look like?  What new Natural Gas fired electricity generating plants are being proposed?  Where will they be sited and who will pay for them?  It won't matter later because we will be committed once we build the pipeline.  We'll pay any price they ask.
I have another question.
No matter how inexpensive Natural Gas is, it can't beat the fuel price of solar, wind, hydro, energy efficiency and weatherization programs.  The "fuels" for those are free.  With weatherization and energy efficiency programs, customers see lower energy bills immediately.  They don't have to wait until they finish paying for a $3 Billion dollar pipeline and the many Billions of dollars required to build the infrastructure to take advantage of it. Why aren't we investing those dollars in systems that use free fuel? 
I think we all know the answers to both of those questions.