New England’s gas constraints mean more help with hefty heating bills

Published on November 02, 2022 by Hil Anderson


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The Biden administration’s announcement this week that it was chipping in another $4.5 billion for heating assistance came in the nick of time for New Englanders who will be facing some stiff utility bills this winter.

Prices for heating oil and natural gas are both expected to run at a sobering high level in the coming months and put a financial strain on more ratepayers than ever this winter, and it may not be a short-term phenomenon in New England where fundamental supply constraints will continue to create tough sledding for a region that still has a long way to go before a green-energy future takes over.

The White House increased its funding for the Low Income Home Energy Assistance Program (LIHEAP) in response to urgent appeals from lawmakers and utility executives, particularly from Massachusetts and the rest of New England. A spike in competition for liquefied natural gas (LNG) from gas-starved Europe is making it more difficult for the region to supplement its already inadequate supplies of gas shipped in from nearly Appalachia via an undersized pipeline system that doesn’t measure up to the vital task of meeting the region’s growing demand for both electricity and heating.

“This represents a serious public health and safety threat,” Joseph R. Nolan, Jr., president and CEO of Eversource Energy, wrote in a letter to President Biden last month urging him to take steps to head off a potential crisis before the first snow arrives.

“Consumers in New England are already experiencing skyrocketing electricity and gas costs given supply constraints and global price pressures following the Russian invasion of Ukraine.”

Nolan specifically asked Biden for a waiver of the Jones Act that would allow foreign-flagged ships to bring in more LNG during the winter, that is if it can be found on the world market as western Europe becomes an aggressive bidder for LNG cargoes to cover the loss of Russian gas supplies.

At the same time, Biden received a similar letter from a bipartisan cadre of House members from throughout New England calling on him to authorize the release of heating oil from the Northeast Home Heating Oil Reserve (NEHHOR). The letter stated that the NEHHOR can be called on in times of severe supply disruptions. “Unfortunately, Putin and the COVID pandemic have inflicted a ‘severe energy supply disruption,’ and with winter approaching it is critical that you quickly release oil from these reserves to help families stay warm this winter.”

Customers are already having a tougher time with heating costs projected to rise sharply nationwide this year. The National Energy Assistance Directors Association (NEADA) estimated that national average home heating costs, already at a 10-year high, would increase 17.8 percent over last winter. At the same time, customer arrearages have not come down in more than a year and were at around 16.7 percent, or 29 million households nationwide.

Mark Wolfe, executive director of NEADA, said at the time the hammer would fall on “millions of lower-income families at risk of falling behind on their energy bills,” and that his organization was asking the White House for $5 billion in additional LIHEAP funding to cover both upcoming heating bills and cooling costs during summer heat waves.

But the sense of urgency over fuel supplies and prices has been even greater in New England and has been building all year. A UMass Amherst/WCVB poll released at the end of October showed 83 percent of Massachusetts voters were “somewhat” or “very concerned” about heating costs this winter as opposed to the 4 percent who were not worried.

National Grid, one of Massachusetts’s two major utilities, notes it does not control energy prices – it buys energy from the wholesale market and passes it directly on to customers at the same price with no markup or profit. In order to help customers that need assistance, National Grid added $17 million to its philanthropic fund to provide additional aid to strapped ratepayers. The company also has launched a Winter Customer Savings Initiative to help consumers lower their energy use and save money, manage their energy bills, and connect with payment assistance programs.

New Hampshire took steps to face the issue of higher energy costs back in September by earmarking $42 million from a timely budget surplus to beef up energy assistance while also raising the income ceiling for eligibility.

Marc Brown, director of the Consumer Energy Alliance for the Northeast region, told Daily Energy Insider that financing increased energy assistance from a state’s general fund rather than through utility rate hikes was an unusual step. “It is a Band-Aid, but that doesn’t mean we shouldn’t do it.”

“It is also going to be a regularly occurring situation,” Brown added. “What if you don’t happen to have a budget surplus in a particular year?”

The obvious answer would be to find ways to increase the flow of natural gas into New England, particularly into Massachusetts with its limited pipeline capacity and relatively large population. Massachusetts considers itself to be an “end of the line” market for the major interstate pipelines, but it is also handy to the major gas fields in Pennsylvania and other Appalachian states that would be more than happy to satisfy the needs of their neighboring New Englanders.

“The only real solution is to realize that this is a situation that is going to be with us for a long time,” Brown said, adding that raising the region’s pipeline capacity would put New England in a position to ride out future winters comfortably while giving the renewables sector more time to develop. “It is foolish to pay additional costs year after year and also be in opposition to a pipeline,” he said.

Unfortunately, Brown said, the typical timeline to add a new pipeline stretches five-to-seven years and would require state legislatures to run interference for the builders and prevent such a project from being killed off in the courts or fall apart in the permitting process. “It speaks to our lack of (pipeline) infrastructure,” he said. “Some people are just going to have to change their attitudes toward gas.”

The Federal Energy Regulatory Commission and ISO New England have both predicted that Massachusetts and the rest of the region will be able to make it through the coming winter with adequate fuel for both power and heating, but also cautioned that a potent nor’easter or a bitter polar vortex event could squeeze supplies.

Brown summed it up, “We’re hoping that we don’t have a really cold stretch.”