According to the study, which assessed various options to maintain electric reliability through 2030 with consideration to ratepayer costs and savings as well as carbon emissions, the most cost effective approach is additional investment in energy efficiency and demand response programs.
“This study demonstrates that we do not need increased gas capacity to meet electric reliability needs, and that electric ratepayers shouldn’t foot the bill for additional pipelines,” Attorney General Maura Healey said in a statement. “This study demonstrates that a much more cost-effective solution is to embrace energy efficiency and demand response programs that protect ratepayers and significantly reduce greenhouse gas emissions.”
Last July the AGO sent written commentary to the Massachusetts Department of Public Utilities announcing its plan to undertake a comprehensive electric reliability study for the region, citing the incompleteness of previous studies investigating, and conclusively supporting, the need for additional pipeline capacity. According to the AGO, “the very facts surrounding the need for additional gas capacity are highly disputed.”
The AGO’s comments also blast an initiative by the state Department of Energy Resources (DOER) to allow Electric Distribution Companies (EDCs) – investor-owned electric utilities – to contract with pipeline companies and pass the costs along to ratepayers. “DOER’s proposal to authorize EDCs to enter into the long-term capacity agreements to facilitate pipeline expansion – with the costs and risks of such long-term obligations borne exclusively by electricity ratepayers – suffers from numerous factual and legal infirmities.”
The AGO study, conducted by the Analysis Group, Inc., examined different approaches to maintaining system reliability particularly during peak winter demand, analyzing their cost/benefits and emissions impact.
The study intended to provide a transparent analysis of the benefits and drawbacks of potential reliability solutions addressing the region’s growing dependence on natural gas. New England already derives 44 percent of its electricity from gas – a figure grid operators project to increase as more efficient gas plants replace retiring generation facilities like coal and nuclear plants.
Absent this increase in natural gas dependency, the study found the electric system would maintain reliability over time with no deficiencies through 2030. Both declining peak winter demand due to energy efficiency and increasing availability of non-gas generating resources like oil backup contribute to this result.
However, under a “stressed system” assuming an increased reliance on natural gas, the analysis indicates a reliability deficiency of up to 2,400 megawatts – equivalent to 0.42 billion cubic feet per day of additional gas pipeline capacity – for 26 hours total through 2030. The study then looked at five potential solution sets to maintain system reliability, analyzing the ratepayer cost/savings and the greenhouse gas (GHG) emissions impact of each option.
The solution of increased investment in energy efficiency and demand response yielded the greatest ratepayer benefit – estimated $146 million in net savings – while lowering CO2 emissions by an estimated 1.86 million tons per year.
The other two options involving additional energy efficiency, each in combination with low carbon imports such as hydropower, provide the greatest reduction in CO2 emissions (estimated 4.86 million tons annual decrease). These low carbon resources would be transmitted through either new or existing power lines. The new power lines option has the highest upfront cost of the five solution sets studied. By contrast, the solution set involving adding dual-fuel capability to existing power plants or contracting for more liquefied natural gas (LNG) represents the lowest upfront investment for ratepayers.
The option of additional incremental natural gas pipeline capacity, while lowering wholesale electricity costs, involves upfront and long-term costs to ratepayers and results in increased annual CO2 emissions. While resolving the reliability issue, none of these solutions would meet New England’s climate goals through 2030.
The study also analyzed two “infrastructure scenarios,” including one representing new gas pipeline sized above the stressed system reliability deficiency. This oversized pipeline option yielded significant net ratepayer savings (estimated $133 million) but lower savings than the energy efficiency/demand response solution.
The bottom line is that, even under a stressed system, electric reliability can be maintained through means other than building new pipeline capacity, with the alternatives providing greater ratepayer savings in some cases as well as reducing CO2 emissions.
“This study gives us more evidence that expanding natural gas pipelines is an unnecessary, massively expensive risk,” said Claire B.W. Miller, Lead Organizer at Toxics Action Center in a press release. “By focusing on energy efficiency investments and local sources of energy like solar and wind rather than new gas pipeline subsidies, we can protect both consumers and the environment,” added Clean Water Action’s Joel Wool.