American Gas - August/September 2013 - (Page 19)

pass their higher natural gas costs on to consumers. “Our preference would be for the private sector to come forward and enter into these contracts, but because of the nature of the marketplace, that just hasn’t happened,” Cleveland said. While natural gas utilities buy “firm,” non-interruptible pipeline capacity months ahead of time, electricity generators in the region’s highly competitive wholesale market buy mostly lower-cost interruptible capacity. When gas demand peaks, the electricity generators are forced to buy expensive gas on secondary markets. New capacity would help to solve the problem, but pipeline builders require an upfront capital investment that electricity generators cannot provide. A new pipeline would save Maine consumers $200 million a year on electricity costs, according to a legislative study. The contracts, which would be capped at $75 million annually, would be funded through an assessment on ratepayers and would require the governor’s approval. The PUC would sell the capacity to electric utilities at rates that would reduce consumers’ electricity costs. While that $75 million wouldn’t be enough to fund construction of the pipeline, it would be a catalyst for private investment, Cleveland said. The new authority for the PUC was the centerpiece of the Omnibus Energy bill, which was initially vetoed by Gov. Paul LePage, who said he wanted wind power to be part of the plan. When legislators passed a separate bill giving support to a University of Maine offshore wind power project a week later, LePage withdrew his objections to the Omnibus Energy bill, and the Senate unanimously overrode the veto. The Omnibus Energy bill also expands funding for electricity conservation programs to $44 million from $28 million a year, and provides an additional $6.6 million to help homeowners switch from heating oil to more efficient natural gas, wood pellet, or propane systems. Patrick Woodcock, director of the governor’s energy office, said it remains to be seen if the legislature’s plan is the answer to natural gas supply problems in New England. “We certainly hope this fosters a dialogue on how to resolve this regional issue without exposing our citizens to unnecessary risk,” he told American Gas.—J.P.T. s tat e h o u s e Pennsylvania’s “Game Changer” Gas production fees help to revitalize communities harrisburg, pa —In 2012, Pennsyl- vania enacted a law—called Act 13—that required gas companies to pay “impact fees” based on their unconventional gas august/september 2013 AmericAn GAs 19

Table of Contents for the Digital Edition of American Gas - August/September 2013

American Gas - August/September 2013
Contents
President’s Message
Subject Index
Dual-Fuel CNG Beauties
Digest
Issues
Issues
Issues
Need to Know
By the Numbers
Places
In Las Vegas, Another Man-Made Wonder
State House
State House
Elm Street
Main Street
A Matter of Trust
Profile
Here Comes the Grid
Marketing
Jobs
Vendor News
Marketplace
Headway

American Gas - August/September 2013