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
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.
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