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Sunday, July 13, 2014

Liberty Utilities: Pipeline would help expand service, but location could be moved from Hollis

LONDONDERRY – The state’s biggest natural gas provider would like to see a new pipeline built to bring more supply from U.S. shale fields to help it expand, including selling trucking fuel from a
Concord-based operation, but the pipeline doesn’t have to run through Hollis or connect to its existing network in Nashua.

“Certainly our preference is to have it on the west side of the system, for system reliability and flexibility,” Richard Leehr, president of Liberty Utilities’
New Hampshire operations, said Thursday. “But the specifics of the route aren’t up to us.” ...

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LONDONDERRY – The state’s biggest natural gas provider would like to see a new pipeline built to bring more supply from U.S. shale fields to help it expand, including selling trucking fuel from a
Concord-based operation, but the pipeline doesn’t have to run through Hollis or connect to its existing network in Nashua.

“Certainly our preference is to have it on the west side of the system, for system reliability and flexibility,” Richard Leehr, president of Liberty Utilities’
New Hampshire operations, said Thursday. “But the specifics of the route aren’t up to us.”

The company, which has 75,000 residential and 15,000 business, industrial or utility customers in New Hampshire, gets all of its natural gas in pipelines that come from Massachusetts to the east of Nashua.

A controversial connection proposed by Kinder-Morgan’s Tennessee Gas Pipeline Co. would come from Massachusetts to the west of Nashua, running through Hollis from Pepperell, Mass., and connect with Liberty Utilities’ pipeline along Route 101A near Pennichuck Square.

Leehr said the extra gas would help the utility expand its footprint – that is, lay more pipes to reach more customers – and also help it balance out pressure and supply during tight periods, such as midwinter, obtaining a more reliable supply of gas for existing or new customers.

Prominent among those customers is a proposed contract iNATGAS to build a facility to compress natural gas into CNG, short for compressed natural gas, at a facility on Broken Bridge Road in Concord. That aims at providing CNG fuel, which is cheaper than diesel, for trucks – a growing market.

“They have the potential of being our largest customer,” Leehr said of iNATGAS. The contract must be approved by the state Public Utilities Commission.

Also in front of the PUC is a proposal by Liberty Utilities to buy New Hampshire Gas Corp. of Keene. That is a small, isolated company, with about 1,200 customers served by propane storage systems and no pipeline connections to the outside world, but it offers a foothold in part of the state with room for expansion.

Biggest provider

Liberty Utilities is a subsidiary of Canadian energy giant Algonquin Power & Utilities Corp., which has a half-million customers in this country. It entered New Hampshire when it bought National Grid in 2012, taking over the former Keyspan gas franchise area that covers much of Greater Nashua as far west as Milford.

It also bought the National Grid’s electric distribution franchise in New Hampshire, which touches Greater Nashua in Pelham and Windham but is concentrated in towns along the Connecticut River.

In New Hampshire, Liberty has the natural gas franchise for 30 communities in the Merrimack River valley past Concord. It just opened a new headquarters and call center in Londonderry, and has 290 employees in the state for gas and electric business.

With virtually no customers in Hollis, however, many people in that town only became aware of Liberty in May, when it was named as the main or only customer for gas that would be carried through town in Kinder-Morgan’s proposed extension.

That pipeline plan remains the subject of much debate; the next step in its progression will be Kinder-Morgan’s filing before the Federal Energy Regulatory Commission in September.

All of this expansion and turmoil is the result of the low price of natural gas caused by explosive development of natural gas from shale fields, notably the Marcellus and Utica fields in Pennsylvania and New York.

This has driven the fuel’s price so low that it is outcompeting every other energy source in the market, not just in the traditional New England business of heating, but in power generation: Half of New England’s electricity is now generated by plants burning natural gas; coal-fired power plants, and even Vermont Yankee nuclear plant, are closing because they can’t compete economically.

Customers, providers, suppliers and transportation companies are scrambling to take advantage of this boom, but it isn’t easy when it can cost $3 billion and take three years to build a single interstate pipeline, such as the one Kinder-Morgan wants to create clear across northern Massachusetts, connecting to its hub in Dracut.

“It has taken even the experts in the system by surprise,” Leehr said about the rise of natural gas.

He said much of the nation’s gas pipeline and production network was built mostly to ship gas from the Rockies and the Gulf Coast to the East Coast, with no expectation that the Appalachian region would start outproducing other areas.

In fact, a major transmission line built to bring natural gas from Canada’s Atlantic provinces through Maine to the Boston area may be reversed so it could carry gas from U.S. shale fields to Canada.

Local need

That’s exactly the suspicion of some pipeline opponents in Hollis, who fear that Kinder-Morgan wants to disrupt their community so it can make money by shipping gas elsewhere, not by serving the local or regional market.

Natural gas can’t be exported from the U.S. under federal law, but there is increasing discussion about changing that as shale drilling expands the country’s supply of natural gas, as well as oil.

Leehr couldn’t rule out the possibility that gas might be exported in the future, but said there’s plenty of demand in New Hampshire because gas – except for a few weeks in the winter, when heating and electricity production collide – is cheap.

“We have a New Hampshire-centric focus,” he said. “There’s substantial demand for more service connections. There’s tremendous growth opportunities for New Hampshire and for us.”

Getting a connection into the system to the west of Nashua is important to meet that growth, he said. So what happens if opposition to the pipeline keeps it from being built?

“Hopefully, that will not be the case,” Leehr said. “I think the Northeast needs new infrastructure, and bringing it from the west is preferable … it serves the needs of the region better.”

David Brooks can be reached at 594-6531 or dbrooks@nashua
telegraph.com. Also, follow Brooks on Twitter (@GraniteGeek).