The chief executive officer of Eversource Energy is asking President Joe Biden to take action so that utilities across New England, including Connecticut, will have enough natural gas to meet the region’s electric power generation needs.
Eversource’s Joe Nolan sent a letter to Biden on Oct. 27 as the President “to swiftly address the growing concerns about winter electric reliability in New England.”
“New England region remains dependent on natural gas to meet our power needs this winter and for the foreseeable future as we work expeditiously to bring additional renewables online,” Nolan’s letter to Biden said in part. “As both an energy company CEO and a lifelong New Englander, I am deeply concerned about the potentially severe impact a winter energy shortfall would have on the people and businesses of this region.”
Nolan told Hearst Connecticut Media Monday that if the state and the region “has a moderate winter, we have nothing to worry about,” although he noted that energy prices will be higher this winter than last winter .
“But we can’t bank on that and if we have a really cold winter, there is a potential we could see rolling blackouts,” Nolan said. “I would encourage people to prepare for the possibility of one or two hour blocks without electricity.”
Nolan said Eversource’s natural gas customers in Connecticut and elsewhere in New England will not face that impact. The reason for that, he said, is because natural gas utilities sign contracts with fuel suppliers that guarantee the delivery of the fuel to their customers.
But power plant operators whose electric generating units run on natural gas have no such guarantee of the fuel being available during periods of peak demand. They purchase what are known as “non-firm capacity contracts,” which means in the event that the high demand for natural gas brings the space in interstate transmission pipelines to nearly full capacity, the pipeline operators are under no obligation to make sure the power plants get the fuel they need.
Nearly half of the region’s electric generating capacity uses natural gas as its primary fuel, according to officials with regional grid operator ISO New England. And natural-gas-fired power plants produce nearly half of the electricity consumed in a year that is delivered via the grid.
Nolan said the interstate natural gas pipelines that are New England’s primary source of natural gas “operate at maximum capacity during the winter.”
Nolan’s letter to Biden comes two months after Gordin van Welie, president and chief executive officer of ISO-New England, raised similar concerns with U.S. Energy Secretary Jennifer Granholm .
“During the coldest days of the year, New England does not have sufficient pipeline infrastructure to meet the region’s demand for natural gas for both home heating and power generation,” van Welie wrote to Granholm in a letter. “For years, the region has relied heavily on foreign liquefied natural gas shipments into import facilities near Boston and New Brunswick, Canada to ensure reliable grid operations when pipeline gas is not
available in sufficient quantities to support the generation sector. The current uncertainty surrounding the global market for LNG has the potential to stress electric grid reliability this upcoming winter under certain weather scenarios.”
van Welie told Granholm that “beyond this winter, the ability to import sufficient quantities of LNG will be essential for New England to meet its reliability, electrification, and clean energy goals for many years to come.”
Pedro Azagra, chief executive officer of Orange-based Avangrid, which is the corporate parent for The United Illuminating Co, and two Connecticut natural gas utilities said “since ISO New England raised winter reliability as an issue of serious concern, Avangrid and United Illuminating have been working with stakeholders and our industry partners to prepare for potential controlled outage events if ordered by ISO-NE.
“We are prepared to respond in a manner that prioritizes safety and security for our customers,”Azagra said. “Avangrid and UI echo the industry’s concerns regarding a potential energy shortfall this winter, and we urge ISO NE, stakeholders, and leaders across the region to come together to identify critical solutions to this significant challenge.”
One action Nolan is urging Biden to take is issuing a waiver of the federal Jones Act.
The Jones Act requires goods shipped from one U.S. port to another be transported on ships that are built, owned, and operated by United States entities. As an example, the federal law regulating maritime commerce prevents foreign tanker ships that carry liquified natural gas from stopping at more than one U.S. port to off load its cargo, said state Sen. Norman Needleman, D-Essex, who is the co-chairman of the Connecticut General Assembly’s Energy and Technology Committee.
“There’s a real shortage of domestic tankers available out there right now,” Needleman said Monday.
Nolan said if Biden waived the Jones Act, foreign registered LNG tankers could be sent to U.S.-based natural gas production facilities in the Gulf of Mexico, load up on the fuel and then bring it back to New England.
“It seems silly to bring in fuel from outside America,” Nolan said.
Needleman said the threat of natural gas shortages for the power plants “is not new, but it has been exacerbated by current conditions.”
“I’d say that it’s worse than in previous years, but at this point, I don’t know how much worse,” he said. “I think Joe was right to write the letter because winter electric reliability issues are much more dangerous than summer reliability issues.”
Nolan said he’d also like to see the Biden Administration take action that would make it easier for power plants that have dual fuel capability – meaning they can operate on either natural gas or fuel oil – to operate this winter and encourage other electricity generators develop that capability..
In 2020, ISO New England submitted a plan to the Federal Energy Regulatory Commission to provide incentives to encourage power plant operators to develop dual fuel capability and other measures to keep them operating. But FERC officials rejected the proposal in October 2020.
Nolan said Biden administration officials have not yet responded to his letter to the President.
“We’ve had a very good working relationship with the administration thus far and I’m confident he will bring the necessary focus to bear on this situation,” he said. “I think a good start would be to convene a meeting of key stakeholders and policy makers. I think it would give folks in the region more of a level of comfort or a sense of peace.”