8/11/2019 Oct 2 Letter to Maine Public Utilities Commission on Effect of Exports on Energy Costs

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October 2, 2014

To the Commission:

As a Massachusetts gas and electricity consumer, and a resident of Dracut, MA, I am writing toexpress my concern that the Energy Cost Reduction Contact proposals outlined by Kinder

Morgan and Spectra Energy may actually increase costs to Maine and Massachusetts

consumers. Can the commission model the price impact of new LNG exports that would result

from all proposed ECRC plans? This issue was not addressed in the hearing examiners report.

The statements filed yesterday by TGP attorney Anthony Buxton contain an unsupported

assertion that pipeline capacity in the Northeast is the sole factor in the projected increase in

winter electricity rates. In fact, the maintenance of sufficient winter reserves is of equal if not

greater importance. Disinterested observers do not come to the conclusion that gas pipelines in

Massachusetts are the sole driver of winter prices. Lack of reserves is clearly a factor in thecommodities markets as the following graph from the US EIA clearly shows (source:

http://ir.eia.gov/ngs/ngs.html, accessed on September 30):

The plan for cost reduction proposed by Kinder Morgan -- the construction of a $6 billion, 2.2

BCF per day pipeline from Pennsylvania to Dracut -- enables exports that may deplete seasonal

reserves that are now critical to the New England winter gas supply. The issue of the relationship

between exports and winter storage thus deserves closer examination by the PUC.

(continued)

http://www.google.com/url?q=http%3A%2F%2Fir.eia.gov%2Fngs%2Fngs.html&sa=D&sntz=1&usg=AFQjCNH8UQpmWpHowRi68K7CdnlRNMBgfw

8/11/2019 Oct 2 Letter to Maine Public Utilities Commission on Effect of Exports on Energy Costs

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Here are a few facts:

The Northeast Energy Direct plan proposes a 2.2 BCF increase, equivalent to a 56%

jump in firm pipeline capacity for the six-state region over 2015 levels of 3.9 BCF. Acombination of Spectras plans could yield a 50% increase from the same baseline.

The reversal of the Maritimes Northeast (MNE) pipeline proposed in the application for

Northeast Energy Direct (FERC PF14-22, cover page 1) is cited by Canadian maritimes

LNG exporters as the source of up to 1 BCF per day of natural gas.*

Three companies besides Canaport and Goldboro are also claiming they would be able

to export gas sourced from the MNE pipeline, if they can build export terminals.

The problem is that storage levels are already almost 500 BCF below normal levels (as ofSeptember 19). Additional demand from an export market would worsen this problem. Maine

consumers deserve to know the effect that spring, summer and fall exports of natural gas will

have on our ability to accumulate sufficient winter reserves.

None of this gas storage is in New England, so the problem cannot be fixed with additional

pipeline capacity into New England. Plus, eastern reserves on which we now depend (both

seasonal and long terlm) will be further drained by the addition of terminals in Cove Point, MD

and Sabine Pass, TX, now approved for approximately 1 BCF per day of new LNG exports.

Rather than contribute to the approval of export pipelines that would send far more natural gas toCanada, Brazil, or Japan than Maine consumers will ever see, the PUC might consider

intervening in the deliberations of other states to assure that lower-cost gas resources are not

squandered rapidly through exports, leading to year-round natural gas price increases and winter

supply problems far worse that what we have seen to this date.

Sincerely,

Rich Cowan

Dracut, MA

cc: Senators Warren, Markey of MA; Senators King, Collins of ME

Rep. Niki Tsongas; Attorney General Martha Coakley

Gubernatorial candidate Mike Michaud; Gubernatorial candidate Charlie Baker

_____________________*Page 1 of the TGP pref ile cover letter f or NED highlights "the interconnec tion w ith the Joint Facilities [in Dracut], together w ith the

anticipated reversal of the primary f low direction of the Joint Facilities." The article "Canaport LNG a can-do Exporter,

Consultancy Says, Natural Gas Intelligence," on May 21, 2014 (see: http://goo.gl/UJnyhf) describes how Maritimes (Joint

Facilities) reversal w ould supply the proposed Goldboro LNG terminal.

http://goo.gl/UJnyhf