Whether it is safety enhancement work in California, pipeline extensions to service new electric generation plants in the Midwest or new distribution pipelines to serve formerly oil-heated homes in New England, low natural gas prices are being felt nationally in the operations of various local utility distribution companies (LDC).

The American Gas Association (AGA) trumpets the new-found abundance of domestic gas supplies and their impact on lower energy costs for residential and commercial customers. “Natural gas utilities are using this opportunity to continue to improve and expand our nation’s natural gas infrastructure,” an AGA spokesperson told NGI.

While cheap natural gas has been weighing on producers, it has been a boon for consumers and economic development, according to a report earlier in 2012 by the AGA, which indicates that consumers have saved $250 billion over the last three years. “Identifying Key Economic Impacts of Recent Increases in U.S. Natural Gas Production” credits shale gas production in the United States for lower commodity prices.

Todd Shipman, a director with Standard & Poor’s Ratings Services, said he is not sure what the hard data shows on gas utility capital expenditure growth, but anecdotally he thinks there has been “an uptick in capex — not particularly tied to gas prices — but I think it has more to do with the ‘San Bruno factor,'” referring to the 2010 gas transmission pipeline rupture and explosion on a Pacific Gas and Electric Co. pipeline south of San Francisco.

“Some of the growth is attributable to expansion, but a lot is centered on reliability and integrity of the system,” Shipman said. “A lot of it is fairly incremental and not tied to the gas prices coming down.”

In New England, National Grid has plans for $221 million in distribution enhancements and expansions covering its utility operations in New York, Massachusetts and Rhode Island.

“Our fiscal 2012-2013 goal for upstate New York [one of four separate utility areas] was to install approximately 3,270 new gas services, adding about 4,200 new customers,” a National Grid spokesperson told NGI. “That would be accomplished by conversions and adding about 23 miles of new distribution main.”

For the current fiscal year in the United States, UK-based National Grid is looking to install more than 20,000 new gas services, adding about 42,100 new customers through conversions and an additional 94 miles of distribution pipelines. “Gas growth has increased by 10% from fiscal 2010-2011 to the next fiscal year; and 23% from fiscal 2011-2012 to this fiscal year,” the utility spokesperson said.

While the AGA is still compiling its latest national growth statistics, a spokesperson said the most recent full-year results (2011) will indicate more than 25,000 miles of additional distribution main, or a total of 1.23 million miles of distribution piping, “the highest number reported to date.”

Two weeks after Michigan’s governor touted natural gas as a fuel for economic revival, hometown utility Consumers Energy said it was building a 700 MW gas-fired power plant in Genesee County, whose county seat is Flint, birthplace of General Motors. On the natural gas distribution side of its business, the company is laying pipe to serve new customers who’ve gotten word of cheap gas.

“Vast new supplies of natural gas have reduced prices, and they are expected to stay low for the long term,” said Consumers Energy CEO John Russell. “We selected natural gas as the fuel source for this new power plant because we project it will be the most economical way to serve our customers in the future and continue to bring them value.”

Late last month, Gov. Rick Snyder released a 19-page message on energy and the environment in which natural gas figured prominently (see NGI, Dec. 3, 2012). “Michigan produces natural gas. It has a lot of places where natural gas can be stored. And it has pipelines built to help move that natural gas,” he said. “That’s a great advantage and an opportunity for the state of Michigan to do a little of its own economic gardening.”

Consumers Energy also is a gas distribution utility, serving more than 1.7 million gas customers in Michigan (half in the Detroit metropolitan area) and operating more than 27,000 miles of transmission and distribution pipelines, as well as gas storage fields with a working capacity of 130 Bcf. More than 90% of the company’s gas customers are residential users, and natural gas is the state’s primary heating fuel. The news of abundant gas supplies at lower prices has not been lost on customers, Consumers Energy spokesman Dan Bishop told NGI (see NGI, Dec. 17, 2012).

“This year we provided natural gas service to 1,300 new customer attachment program customers,” he said. “This is an intentional, strategic plan that we’re on to work with people that have indicated an interest in getting gas service and developing an appropriate program to lay pipe and to serve them with natural gas.

“We’ve gotten more aggressive in doing this than previously. Obviously, the market is attractive right now in terms of gas supply. Customer interest is very good, very strong. It’s well known that the price of gas is declining.”

©Copyright 2013Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.