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Algonquin Withdraws Pre-Filing Application For Access Northeast Project

Citing "gaps in energy policy" in New England, Algonquin Gas Transmission LLC has withdrawn its Access Northeast Project from FERC's pre-filing review process, though it said it remains committed to addressing the region's need for natural gas pipeline infrastructure for electric generation.

"Algonquin will continue working with state and federal agencies, as well as other stakeholders, to help address the energy policy inconsistencies that are currently preventing the region from achieving significant reliability and cost benefits from the utilization of affordable and environmentally friendly and reliable energy resources," Algonquin said in a letter to FERC Thursday [PF16-1].

The project has been in a regulatory/contracting holding pattern since late last year, and suffered a number of regulatory setbacks in 2016.

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, parent Spectra Energy Partners LP 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 last 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.

In December, Algonquin told the Federal Energy Regulatory Commission it needed more time "to solidify the commercial foundation" for Access Northeast.

AGT is an affiliate of Spectra Energy, which merged with Enbridge Inc. earlier this year. Access Northeast is sponsored, along with Spectra, by New England's two largest utilities: Eversource Energy and National Grid USA.

recent poll by industry group Consumer Energy Alliance found that a large majority of voters in energy-short Connecticut, Massachusetts, New Hampshire and New York embrace affordable and reliable energy in New England, but a much smaller majority embrace natural gas pipelines to make that happen. At the same time a growing number of gas-fired power plants are being built in the area, several natural gas pipeline projects have been shot down. It’s a situation that bears watching, especially in winter.

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