Regional Market Update

Transcription

1 March 14, 2014 Providence, RI Regional Market Update Presentation to: NGA Sales & Marketing Conference Thomas Kiley Northeast Gas Association

2 Continued on NGA web site

3 Issues The Current Winter Developments in the Region Proposed Infrastructure Power Generation

4 It s Been Cold and Winter isn t Over Mid-Atl. Normal Mid-Atl. Actual Heating Degree Days, Nov Feb Coldest winter in a decade, heating degree days 10% higher than 10-year average in U.S. Polar Vortex Northeast 13% colder than last year New Eng. Normal New Eng. Actual Source: U.S. NOAA Consistent throughput High demand on system infrastructure Several LDCs and pipelines set new records for sendout including South Jersey Gas, Con Edison, National Grid, Transco, Texas Eastern, etc.

5 Bill Impacts Being Felt but Gas Remains Comparatively Best Chart: U.S. EIA, March 12, EIA chart uses Midwest homes as basis for fuel cost comparison.

6 Weather Impacts: Spot Price Up Weather impacted spot price volatility

7 Spot Price in Regional Market Sets Records: example 1 Chart: U.S. EIA, February 2014

8 Spot Price in Regional Market Sets Records: example 2 1/6/14 1/21/14 1/27/14 Chart: Intercontinental Exchange (ICE)

9 Weather Impacts: Storage Did its Job, but Refill Needed Chart: U.S. EIA, March 13, 2014 After long winter, Storage now 45% below 5-year average

10 Short-Term Price Outlook: EIA Henry Hub Natural Gas Price dollars per million Btu Historical spot price STEO forecast price Jan 2013 Jul 2013 Jan 2014 Jul 2014 Jan 2015 Jul 2015 Note: Confidence interval derived from options market information for the 5 trading days ending Mar. 6, Intervals not calculated for months with sparse trading in near-the-money options contracts. Source: Short-Term Energy Outlook, March Chart: U.S. EIA, March 11, 2014

11 Connecticut Gov. Malloy released Comprehensive Energy Strategy last Feb. Gas utilities gained approval from CT PURA in Nov for their expansion plans. Proposed pipeline projects: Tennessee s CT Expansion and Spectra s AIM. Goal: to add as many as 280,000 customers in next 10 years.

12 Maine Legislature passed bill last June to enable PUC to contract for up to 200 million cubic feet of gas. Trying to jumpstart infrastructure devl t in the state. Utility expansions: Unitil conversions, Maine Natural Gas Kennebec Valley project, new LDC with Summit Natural Gas, Bangor Gas and its Loring Pipeline

13 Massachusetts DOER commissioned Gas Expansion study; stakeholder process held, Sussex Economic Advisors doing analysis MA House passed gas leaks bill in Feb. seeking to accelerate replacement of older distribution pipe components

14 New Hampshire CNG virtual pipeline and LNG plants proposed at several points to be fueled by LDC and pipeline systems Proposed pipeline expansions: PNGTS C2C Tennessee s Northeast Expansion Spectra s Atlantic Bridge

15 New Jersey Infrastructure replacement programs advancing among all utilities NGV station development advancing in several areas

16 New York DPS initiated proceeding on gas expansion in late 2012 next steps expected in May LDC growth example: Enbridge St. Lawrence Gas Franklin County expansion

17 New York City PlaNYC phasing out the use of #4 and #6 oil in city buildings. About 1,300 city buildings converted from oil to gas on Con Edison system in National Grid has converted or is in the process of converting 537 heavy (#6 & #4) oil buildings in its NYC footprint in Brooklyn, Queens, and Staten Island. In Sept. 2013, Mayor Bloomberg announced the city s air was the cleanest in 50 years and noted that the expansion of the regional natural gas supply and local gas distribution infrastructure had saved money and lowered emissions.

18 Rhode Island Infrastructure replacement program advancing with full regulatory support from PUC

19 Vermont Addison Natural Gas Project Phase I approved by PSB in Dec. Extending distribution system south to Middlebury by Future proposed phases: Phase 2: Extend line under Lake Champlain to serve further towns in paper mill in Ticonderoga, NY. Phase 3: Extension to serve Rutland.

20 Infrastructure Developments Copyright: Northeast Gas Association Prepared by: Coler & Colantonio, Inc. February 2012

21 Interstate Transmission Projects In-Service in 2013 Tennessee s Northeast Upgrade : 636 MMcf/d Tennessee s MPP Project : 240 MMcf/d Millennium s Minisink Compressor : 150 MMcf/d National Fuel Gas s Line N : 30 MMcf/d Transco s Northeast Supply Link : 250 MMcf/d Spectra s NJ-NY Expansion : 800 MMcf/d Photo courtesy of Spectra Energy

22 Proposed Pipeline Projects Empire, Tioga County II Columbia, East Side Expansion Project National Fuel / Empire, Tuscarora Lateral Tennessee, Niagara Expansion Williams & Cabot, Constitution Pipeline Prepared by NGA, based on publicly available information. Green color indicates 2014 in-service date. Project locations approximate. As of Iroquois, Wright Interconnect Tennessee, Rose Lake Tennessee, Northeast Expansion VERMONT Tennessee, Connecticut Expansion PNGTS, C2C Spectra, Atlantic Bridge Spectra, AIM Iroquois, Eastern Long Island Williams, Rockaway Lateral Spectra/Texas Eastern, TEAM 2014 Millennium, North -South Upstate Connector Project Millennium, Hancock Compression Project

23 New England Governors Energy Infrastructure Initiative Need to increase pipeline capacity into region by 1 Bcf or more Need to increase electric transmission capacity from clean energy sources into region by 1,200 to 3,600 MW

24 Gas & Power Generation Renewed focus on gas & electric coordination on ISO-NE, NY ISO and PJM systems New England power system used a lot of oil this winter to offset its non-firm gas configuration FERC holding technical conference on April 1 to explore this winter experience and gas/electric operations For gas industry, central issue remains the over-reliance of the power sector on interruptible gas New pipeline infrastructure will help but will the power sector invest in its share of pipeline capacity? New England Governors current initiative is process to watch

25 Power Trends: Yes, No, and Restrictions New 640 MW gas plant approved for Salem, MA, to replace older coal unit Developer, Footprint Power, agree to settlement restrictions to close plant by 2050 Photo of proposed Salem, MA gas power plant: Footprint Power New gas plant proposed for Cape May, NJ to replace coal unit Pipeline proposal to move gas to plant rejected by Pinelands Commission

26 Summary The Northeast remains highest spot price point for natural gas new infrastructure needed, planned, in process Cold weather and customer bill impacts being felt gas retains its price advantage over other fuels Power market realizes it needs to facilitate its relationship with natural gas but can power market overcome its own market impediments? Challenges remain in terms of facility siting, environmental concerns, price pressures - New England Governors current initiative remains key process to watch

27 Thank you and enjoy the Conference 30.