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Energy East Plans New Salt Cavern Storage in Northeast

Energy East Plans New Salt Cavern Storage in Northeast

Building on its success developing the first salt cavern storage facility in the Northeast, Energy East announced plans to develop another high-deliverability gas storage facility in the same area of southwestern New York about five miles north of Watkins Glen. The proposed plant will be designed by Energy East subsidiary Seneca Lake Storage in two caverns owned by U.S. Salt and will be connected to Columbia Gas Transmission via a proposed 3.2-mile pipeline. It is expected to be in service in November 2001 with 750,000 Dth of working gas capacity and 75,000 Dth of daily deliverability.

"This new facility will provide much needed storage able to respond to the growing demand for natural gas in the Northeast and Mid-Atlantic regions," said George E. Bonner, president of Energy East Enterprises.

Unlike its existing Seneca Lake salt cavern, which is operated by subsidiary New York State Electric and Gas (NYSEG) for its own in-state needs, the new facility will be FERC regulated and connected to the interstate pipeline grid to serve Energy East's growing list of distribution subsidiaries. Energy East currently has three acquisitions (valued at a collective $2.4 billion in cash and debt) in the works, one with CMP Group, parent of Maine's largest electric utility Central Maine Power, another with CTG Resources, Inc., parent of Connecticut Natural Gas (CNG), and a third with Connecticut Energy, parent of Southern Connecticut Gas. Following the completion of all three, which is expected by next summer, Energy East will have 1.3 million electric customers and about 542,000 gas customers, excluding any added through CMP Natural Gas, its new Maine gas distribution partnership with CMP.

"We're looking to go into a different realm. Energy East is a very different company now than when it first started construction on the original storage facility," noted spokesman Dan Farley. Energy East CEO Wes Von Schack said the company intends to build a "super-regional" energy distribution company. In a region with the most rapid gas-fired power generation growth, high-deliverability storage will play an increasingly important role and so far Energy East is the only regional operator with local access to salt storage. NYSEG's existing salt cavern has 1.45 Bcf of working gas capacity and 145 MMcf/d of peak deliverability.

Seneca Lake said it intends to file an application with FERC soon with a request for market-based rates.

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