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Maine PUC Staff Report Says ‘No’ to All LNG Storage Proposals

In a draft order yet to be finalized, Maine Public Utilities Commission (PUC) staff argue for the rejection of all proposed liquefied natural gas (LNG) storage options recently presented to regulators.

Last year the PUC issued a request for proposals (RFP) for LNG physical energy storage in accordance with an act that established the authority for the PUC to execute or direct one or more of Maine's transmission and distribution utilities, gas utilities, or natural gas pipeline utilities to execute a physical energy storage contract.

“In this order, the commission concludes that, based on the record in this proceeding, none of the physical energy storage contract (PESC) proposals presented satisfy the statutory requirements specified in An Act To Allow the Public Utilities Commission to Contract for Liquefied Natural Gas Storage and Distribution...and, therefore, the commission cannot order the execution of a PESC.”

The draft order says the PUC “...cannot find that the statutory prerequisites regarding market rules and private participation are satisfied. Second, none of the proposed PESCs satisfy the requirements of the LNG Storage Act that such contracts (1) be commercially reasonable; (2) be in the public interest; (3) will materially enhance LNG storage in the region; (4) will significantly affect peak pricing; and (5) are reasonably likely to be cost beneficial to utility ratepayers.”

Additionally, the draft order says that eight of the 11 proposals may exceed the statutory spending cap for such a project.

A recent study of the 11 proposals by Navigant Consulting found little economic benefit from any of them.

The examiner’s report, which was published Monday, is subject to comments by the parties until the close of business Monday.

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