New England electric power generation is heavily dependent on natural gas and now, one town at a time, utilities and pipelines are expanding their systems to add more residential, commercial and industrial natural gas customers.

On Thursday, Vermont Gas Systems announced that it is seeking regulatory approval for Phase 2 of its Addison Natural Gas Project (ANGP), which would extend service to portions of Addison and Rutland counties and the International Paper mill in Ticonderoga, VT.

“This second phase of the project will establish the infrastructure to bring natural gas service to Rutland many years sooner than otherwise possible, at no additional cost to Vermonters, by leveraging revenues from International Paper,” Vermont Gas said. The company anticipates filing a formal petition with the Vermont Public Service Board in mid-November.

Vermont Gas already serves more than 45,000 customers in Franklin and Chittenden counties. Bringing natural gas to Addison County is expected to bring $200 million in energy savings over the next twenty years, while reducing emissions by 300,000 tons, according to Vermont Gas CEO Don Gilbert. “These economic and environmental benefits continue to grow significantly if natural gas service is extended to Rutland. That is why many Addison and Rutland county residents, employers and community organizations have expressed their support for natural gas and the economic and environmental benefits to their communities,” he said.

ANGP, which would add a 41-mile extension to Vermont Gas’ western Vermont natural gas system, has been endorsed by Gov. Peter Shumlin, Middlebury College, the Middlebury Select Board, the Middlebury Planning Commission, and Cabot Creamery, one of the area’s largest employers (seeDaily GPI, May 20). Gas to be transported through the proposed pipeline originates in western Canada.

Further south, the New Canaan, CT, Utilities Commission has invited representatives from Yankee Gas and Connecticut Natural Gas (CNG) to a public hearing Wednesday to discuss bringing natural gas to the town. An initial overview performed by the commission concluded that switching the town and its schools from oil to natural gas would save at least $250,000 a year.

“The proximity of the Tennessee gas pipeline, running through Waveny Park, provides the town with the means to tap into natural gas supplies from traditional production sources in Texas and Louisiana or newer production in Pennsylvania,” according to the committee report. “The question then is how and where to connect the pipeline to serve New Canaan’s energy needs.”

Earlier this year, Yankee, CNG and Southern Connecticut Gas said they were “working together to dramatically redefine how to expand their systems to meet customers’ needs and provide savings to Connecticut residents and businesses alike.” The three gas companies filed a comprehensive joint gas expansion plan in June with the Public Utilities Regulatory Authority and Department of Energy and Environmental Protection outlining how they would meet gas expansion goals proposed in Gov. Dannel Malloy’s comprehensive energy strategy and legislation adopted by the state’s legislature (seeDaily GPI, July 11). The plan outlined a structured approach to add approximately 280,000 new gas heating customers over the next 10 years.

New England’s natural gas infrastructure will be increasingly under pressure from demand growth from the power sector in coming years, with 11 of 14 sub-regions expected to exceed constraint capacity levels on more than 30 days/year under the current infrastructure, according to Benjamin D’Antonio, counsel and analyst for the New England States Committee on Electricity (see Daily GPI,Sept. 30).

A quarterly update of various regional efforts to coordinate natural gas and electric markets released last month by the Federal Energy Regulatory Commission showed that the New England and Northeast generation markets will continue to be the most gas-dependent during the upcoming heating season (see Daily GPI, Sept. 20). The Commission recently passed an interim order that would make it easier for Northeast generators to substitute oil if natural gas was in short supply or was too high-priced. Preliminary estimates call for Northeast generators to replace as much as 6.2-9.8 GW of coal-fired capacity with gas by 2015.