Building on its success developing the first salt cavern storagefacility in the Northeast, Energy East announced plans to developanother high-deliverability gas storage facility in the same areaof southwestern New York about five miles north of Watkins Glen.The proposed plant will be designed by Energy East subsidiarySeneca Lake Storage in two caverns owned by U.S. Salt and will beconnected to Columbia Gas Transmission via a proposed 3.2-milepipeline. It is expected to be in service in November 2001 with750,000 Dth of working gas capacity and 75,000 Dth of dailydeliverability.

“This new facility will provide much needed storage able torespond to the growing demand for natural gas in the Northeast andMid-Atlantic regions,” said George E. Bonner, president of EnergyEast Enterprises.

Unlike its existing Seneca Lake salt cavern, which is operatedby subsidiary New York State Electric and Gas (NYSEG) for its ownin-state needs, the new facility will be FERC regulated andconnected to the interstate pipeline grid to serve Energy East’sgrowing list of distribution subsidiaries. Energy East currentlyhas three acquisitions (valued at a collective $2.4 billion in cashand debt) in the works, one with CMP Group, parent of Maine’slargest electric utility Central Maine Power, another with CTGResources, Inc., parent of Connecticut Natural Gas (CNG), and athird with Connecticut Energy, parent of Southern Connecticut Gas.Following the completion of all three, which is expected by nextsummer, Energy East will have 1.3 million electric customers andabout 542,000 gas customers, excluding any added through CMPNatural Gas, its new Maine gas distribution partnership with CMP.

“We’re looking to go into a different realm. Energy East is avery different company now than when it first started constructionon 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 themost rapid gas-fired power generation growth, high-deliverabilitystorage will play an increasingly important role and so far EnergyEast is the only regional operator with local access to saltstorage. NYSEG’s existing salt cavern has 1.45 Bcf of working gascapacity and 145 MMcf/d of peak deliverability.

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

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.