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
President’s Message
Subject Index
Head Start: On Energy Education
By the Numbers
Need to Know
The Wheels on the Bus...
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

American Gas - November 2013