Algonquin Gas Transmission LLC told FERC that it plans to “take additional time to solidify the commercial foundation” of its Access Northeast Project, which suffered a number of regulatory setbacks this year.
Algonquin said in a monthly progress report filed late last week with the Federal Energy Regulatory Commission that it “expects limited activity” in the project docket [PF16-1] “while this evaluation is ongoing.”
Algonquin pointed out that ISO New England Inc. has made it clear that the region needs additional natural gas infrastructure to improve reliability and prevent heating and electric demand from competing for limited capacity during winter months. Natural gas constraints have led to both electric and natural gas price blowouts in New England during periods of extreme cold the last few winters.
Calling it “critically needed infrastructure,” Algonquin said it is “continuing its comprehensive analysis of the Access Northeast Project and remains fully committed to providing a regional solution for more reliable and affordable energy service for the benefit of New England’s consumers and to meet each state's energy and environmental goals and policies.”
The company said it plans to “re-engage with FERC staff, agencies and other interested stakeholders through pre-filing activities in the first half of 2017.”
Algonquin parent Spectra Energy Partners LP said in November that it’s not giving up on Access Northeast, but the project had a rough 2016 in terms of securing needed regulatory approvals despite New England’s price volatility pointing to a clear need for additional capacity.
Access Northeast would add 900,000 Dth/d and additional liquefied natural gas (LNG) storage to the existing Algonquin system. With the project designed to serve electric generation demand, Spectra looked to add state-regulated, ratepayer-backed commitments from New England electric distribution companies (EDC) Eversource Energy and National Grid. The EDCs wouldn’t use the capacity but would release it to power generators reluctant to commit long-term to firm transportation contracts.
The proposal encountered pushback from competitors that claimed Algonquin’s plan was anti-competitive and would artificially suppress prices. To an extent, FERC agreed, denying a capacity release waiver proposed to allow the EDCs to sign up for the space on Access Northeast.
The project also had mixed results at the state level. While Maine utility regulators agreed to join in a regional electric reliability effort that would have benefited Access Northeast, the Supreme Judicial Court of Massachusetts in August overturned a plan approved by that state’s regulators to move forward with the EDC pipeline contracts. In October, New Hampshire regulators nixed a proposed contract between Eversource and Access Northeast. Connecticut regulators subsequently dropped a request for proposals to add pipeline and storage capacity, as well as LNG resources.