American Gas - November 2013 - (Page 28)
Many states are now looking to expansion as a
way to reduce consumer energy costs and support
economic development By peter haapaniemi
s tate
re po rt
Expanding
the reach of the
Gas Infrastructure
W
ith its vigilant
emphasis on
safety and
reliability, the
natural gas
industry has
accelerated the pace of replacing pipelines
no longer fit for service. This work is
facilitated by the type of innovative rate
mechanisms and associated legislation
that exist in 34 states. Increasingly, those
replacement efforts are being coupled
with a growing focus on expanding the
infrastructure to provide more gas to more
customers-something that can best be
described as "smart modernization."
The increased interest in expansion is
driven largely by the low price of gas-
as well as the fact that such prices are
expected to be the norm for some time
to come. States are looking at natural gas
infrastructure expansion as a key to driv28
november 2013 AmericAn GAs
ing economic development and reducing
consumer energy costs. At the same time,
many states also see natural gas as a way to
help reduce greenhouse gas emissions and
improve environmental quality. Where
natural gas is available, research shows,
builders will use it in their projects 84 percent of the time. However, there are many
areas where there is currently no natural
gas service.
"Governors, legislators, and commissioners alike are all looking at this abundant, low-priced, environmentally sound
fuel source, and are exploring policies to
expand its use," says Kyle Rogers, vice
president of government relations at AGA.
Often, however, they are finding that there
are impediments to expansion that they
need to address, such as how to ensure
that an expansion project is economically
viable, how to best streamline the complex
process for obtaining construction and
environmental permits, and how to access
land to conduct surveys.
A key question is how to pay for
infrastructure expansion programs. A new
main line extension typically costs about
$1 million per mile to build. A utility
must determine whether the increased
throughput from expansion will be sufficient to pay for the cost of expanding a
line. Under traditional rate plans, it often
is not economical. Thus, new and innovative approaches to funding expansion are
being approved and/or considered around
the country. The issue is being tackled by
legislatures, commissions, and utilities,
and a number of approaches to funding
expansion are emerging, ranging from rate
trackers to bonds and economic development grants. During its 2013 meeting,
the National Association of Regulatory
Utility Commissioners passed a resolution
that "encourages states to fully explore,
Table of Contents for the Digital Edition of American Gas - November 2013
American Gas - November 2013
Contents
President’s Message
Subject Index
Head Start: On Energy Education
Digest
Issues
Updates
By the Numbers
Need to Know
Places
The Wheels on the Bus...
California
Michigan
Michigan
New Jersey
Long Island
Fueling the Future
U.S. Secretary of Energy Ernest Moniz
A Tight Ship
Expanding the Reach of the Gas Infrastructure
Company Profiles
Jobs
Marketplace
Headway
American Gas - November 2013
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