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Connecticut Drops NatGas RFP as New England Cooperation Falls Apart

Connecticut is abandoning a request for proposals (RFP) for natural gas pipeline/storage capacity and liquefied natural gas (LNG) resources as support for project cost sharing among New England states has fallen away. Hydropower and renewables are slated to get more business from the Constitution State.        

"As noted in the 2014 IRP [integrated resource plan], DEEP [Connecticut Department of Energy and Environmental Protection] believes that this problem of inadequate gas infrastructure is greater than one state can solve alone," the department said in its RFP cancellation notice. "Regional investment is necessary to ensure that no one state disproportionately bears the costs of addressing what is a problem endemic to our regional electric system."

However, plans in neighboring states for shouldering the burden of large-scale natural gas infrastructure have stumbled.

Regulators in New Hampshire recently refused to approve a 20-year contract between Spectra Energy's Algonquin Gas Transmission LLC and Eversource Energy, with costs to be borne by ratepayers. The contract would have supported the pipeline's Access Northeast project to serve New England (see Daily GPI, Oct. 10). In late August, the Federal Energy Regulatory Commission rejected a blanket capacity release waiver sought by Algonquin (see Daily GPI, Sept. 1). Separately, an August Massachusetts Supreme Court ruling invalidated capacity contracts on Access Northeast when it overturned a previously approved natural gas-electricity harmonization plan (see Daily GPI, Aug. 30; Aug. 18). Earlier in the summer, though, regulators in Maine went the other way -- over the recommendation of regulatory staff -- and voted to put ratepayers on the hook for pipeline development costs (see Daily GPI, July 21).

DEEP said it had received seven proposals under the natural gas RFP. Instead of sticking with natural gas, DEEP has selected projects submitted in response to an RFP issued jointly by Connecticut, Massachusetts and Rhode Island for large-scale hydropower, Class I renewables above 20 MW in size, and associated transmission. The selected projects will now advance to negotiate power purchase contracts with Connecticut's two electric distribution companies: Eversource and United illuminating, and will be subject to regulatory approval by Public Utilities Regulatory Authority.

"Our actions on the three energy procurement RFPs will protect the interests of Connecticut's ratepayers while moving our state forward to best address the energy challenges that we face," said DEEP Commissioner Robert Klee. "While we are not selecting projects under the natural gas RFP at this time, we are taking steps to secure additional clean energy resources that address gaps in our energy infrastructure. Bringing these projects online will also play a real part in helping us achieve this state's carbon reduction targets for 2020 and beyond, which will continue Connecticut's leadership in efforts to address climate change."

DEEP said it is retaining its authority to issue future RFPs to procure natural gas resources as needed to provide more reliable electric service. "DEEP will monitor conditions in the ISO New England market and proceedings of other New England states to determine whether to reissue this gas RFP," it said.

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