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Model of New England Pipe Market Being Created

Model of New England Pipe Market Being Created

Interstate pipelines will want to be on the look-out for the results of a model simulation of the New England pipeline infrastructure that will analyze its potential to supply the "enormous" increase in the demand for natural gas by power generators in the region.

Boston-based Levitan & Associates Inc. has been commissioned by the New England Independent System Operator (ISO) to develop a technical model of the region's gas deliverability system that will serve as an "early warning sign of the [pipeline capacity] hotspots across the region," providing generators with a roadmap of where to and where not to build new gas-fired facilities, said Levitan President Richard Levitan.

In addition, Levitan said the analysis will recommend "what types of initiatives make sense" for the pipelines to improve their deliverability to generators - expansions, looping, compressor changes or "regulatory problem-solving that will improve the liquidity of the region."

Levitan, a management consulting firm for the energy industry, will design the model to focus on five pipelines serving New England: Portland Natural Gas Transmission System, Maritimes & Northeast, Algonquin Gas Transmission, Tennessee Pipeline and Iroquois Gas Transmission. It also will review the region's storage and liquefied natural gas availability.

The New England ISO is concerned "there's not enough pipeline capacity to meet the enormous new demand of the generation facilities that are being added across the region," Levitan noted. "Also, it's concerned about the liquidity of the pipelines to meet some of the peak requirements, not just in the winter but during the summer when sometimes the pipelines are conducting their own maintenance."

Even if the 1 Bcf/d Independence Pipeline project, which recently was approved by FERC, is built to the Northeast, Levitan said it would make only a dent in the gas needs of the region's generators. Although 1 Bcf is an "enormous increase in pipeline infrastructure, it only corresponds to something in the vicinity of 5,000 MW of generation. More pipeline capacity has to be rationalized [added or reallocated] to meet the requirements of all the new entrants in the market."

He said Levitan will be working to design the model "certainly through the beginning of next year." He indicated the results may be forwarded to FERC, which has been reticent about approving Northeast pipeline projects for fear of overbuilding to the region. "I hope the pipelines will work with us in a productive fashion" since the results of the effort will be as much a benefit to the pipelines as they will be to the New England ISO and the region's power generators, Levitan said.

Susan Parker

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