NGI The Weekly Gas Market Report / NGI All News Access

Maine Governor Proposes Regional Gas Conservation Initiative to Cut Demand 5% by 2011

Maine Gov. John Baldacci has proposed a regional natural gas conservation effort with a goal of cutting gas consumption by 5% by 2011. Baldacci sent a letter to the governors of Connecticut, Massachusetts, New Hampshire, Rhode Island and Vermont recently proposing a joint conservation initiative with a targeted 1% reduction per year in gas consumption in each of the states.

Baldacci said the initiative was in response to the impact of Hurricanes Katrina and Rita on gas supply, sharply higher gas prices and the potential for shortages in the region this winter.

A top KeySpan Energy official warned federal energy regulators two weeks ago that electric generators in New England face potential natural gas curtailments this winter, given that a large number of them have failed to negotiate firm transportation contracts to ensure the delivery of gas to power their facilities. A spokeswoman for ISO New England, the operator of the region's bulk power system and wholesale electricity markets, said it shares KeySpan Energy's concerns (see NGI, Oct. 17).

"As you and the other governors in New England know, we are facing a potentially serious energy problem this winter," Baldacci told the other governors. "The recent meetings ISO New England has been holding with our respective offices includes a natural gas outlook that suggests that we may face some very tight natural gas supply margins this winter and, because of our heavy reliance on natural gas to fuel our electricity production, a remote risk that we may face electricity shortages during a portion of this winter. Though it is important to recognize that actual shortages of natural gas are remote, the situation warrants immediate contingency planning."

He said ISO New England believes the region's electricity demand can be reduced by 250 MW to 500 MW with a coordinated and sustained public conservation campaign. In 2004, about 40% of the region's power generation was gas-fired so by reducing power demand, gas demand also will be reduced.

"I have directed the chairman of our Public Utilities Commission, Kurt Adams, to work with the ISO and the appropriate officials from your state[s] on a regional conservation campaign," Baldacci said. "Kurt stands ready to work with your representative on developing a regionwide conservation campaign."

Attached to the letter was a draft proposed memorandum of understanding for the "New England Electricity and Natural Gas Conservation Initiative." Baldacci said the MOU "draws on similar efforts recently agreed to by our colleagues, the Midwest Governors Association. I believe this MOU can form the basis of effective regional efforts that can reduce our region's demand of natural gas while helping to reduce the cost of natural gas by an estimated 13% over the next five years," Baldacci said. "It will give us the most effective tool to offset a portion of the dramatic increase in the price of natural gas we've experienced in the past year."

Beth Nagusky, Maine's director of energy independence and security, said the MOU is likely to be discussed at a meeting on Nov. 17. "We clearly have put too many eggs in this basket" by making 40% of New England's power generation (or about 10,000 MW) natural gas-fired, Nagusky said in an interview with NGI.

But she noted that several studies have shown that conservation and greater efficiency can make substantial short-term reductions in demand. A study done last year by the New England Energy Efficiency Partnership estimated that "New England has a potential for saving by 2008 about 17,000 GWh, or 4,317 MW of power demand, which is equal to fourteen 300 MW power plants," she said. "They say we could double that by 2013. If we do only 48% of that, we could still offset expected demand growth. They have identified that we could reduce natural gas demand by between 11% and 68% depending on how much of that energy efficiency potential is captured."

Nagusky said the efficiency gains identified in the study would be achieved mainly through appliance standards and energy codes. Some of that can be done over the next few years, but in the short-term the governor intends to simply get the word out about high prices and the need for conservation. "We plan to be prepared for the possibility of shortages and will do everything we can to prevent them," Nagusky said.

"We're currently doing some market testing of different messages and strategies in preparation for running a statewide conservation campaign in Maine. We will wrap up the polling this week and then we hope by the end of this week to define some messages that will work to promote conservation. We will be designing ads after that.

"The governor was out on Saturday (Oct. 15) for Operation Keep Maine Warm where we go into [low income] homes to [make them more energy efficient]." The heating assistance program has 15,000 households waiting for weatherization but can only do 1,000 with current resources. Last year, 1,000 volunteers winterized homes for 1,500 Maine seniors. The goal this year is to winterize 3,000 homes. Each homeowner will save about $80 in energy costs per year.

Last year Maine was able to provide $480 per household in heating fuel assistance to 51,000 Maine people; but this year the Housing Authority projects it will only be able to provide $435 despite skyrocketing gas and fuel oil costs.

"The federal LIHEAP program is not keeping pace with increases in fuel costs," Nagusky noted. "If we only have the same number of [low income] people that we had last year, which is stretching it, we can't even fill their tanks once; that's how bad it is. The governor has asked for more. I think 27 governors have asked for more."

To find out more about Operation Keep ME Warm, go to www.volunteermaine.org and to find out more about energy issues in Maine, go to www.maineenergyinfo.com.

©Copyright 2005 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Copyright ©2018 Natural Gas Intelligence - All Rights Reserved.
ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus