JUST MINUTES BEFORE Charlie Baker became governor, the Patrick administration released a $250,000 study suggesting winter electricity prices are likely to remain very high for the next four years and additional natural gas pipeline capacity is needed to address the problem.
The report by Synapse Energy Economics of Cambridge said the state is likely to continue experiencing sharp spikes in natural gas prices during the winter months for the next four years because of insufficient pipeline capacity coming into the region. Prices this winter are soaring to their highest level ever in some cases.
The Synapse report said peak demand for power will be met during the 2015-2019 period using alternative fuels, primarily oil, to produce electricity. By 2020, however, additional natural gas pipeline capacity will be needed to meet electricity demand, the report said.
Synapse analyzed the demand for natural gas under eight different scenarios and concluded the state would face a shortfall of between 600 to 800 million cubic feet of gas on a winter day in 2020 when demand for the fuel is at its peak. By 2030, the shortfall could range from 600 million to 900 million cubic feet of gas per day. For comparison purposes, Massachusetts used an average of 1.8 billion cubic feet of gas per day during January 2014.
The report said the state needs to tap hydroelectricity from Canada, develop more renewable energy, and promote energy efficiency above levels supported by existing policies, but concluded these efforts will still not be enough to avoid building more natural gas pipeline capacity.
Synapse said it based its analysis of the potential for energy efficiency and renewables to offset the need for more power from fossil fuels on the latest available studies. The study regarded an alternative power resource as “economically feasible if its net avoided cost (that is, it costs less than its benefits such as avoided energy, avoided transmission, and distribution etc.) did not exceed the costs of building additional pipeline capacity.”
The study did not address the potential for reducing natural gas demand by fixing leaks in the existing pipeline system or the environmental impact of fracking in other states.
Baker, in prepared remarks for his inaugural, took note of high electricity prices this winter. “This increase is being driven in large part by inadequate delivery systems, the result of poor planning and coordination. I look forward to working with my colleagues here in Massachusetts and with leaders like Governor Raimondo of Rhode Island as well as the other New England Governors to solve this problem while we continue to reduce our carbon footprint,” he said.
Supporters of expanding natural gas pipeline capacity say the study is significant, particularly because it was commissioned by the administration of Gov. Deval Patrick, who backed away from a region-wide effort to build more pipeline capacity and import more Canadian hydroelectricity because he wasn’t convinced the pipeline was needed.
But opponents said the report doesn’t make a convincing case for adding natural gas pipeline capacity because it failed to approach the problem from a region-wide perspective and because it didn’t include all possible forms of renewable energy, including offshore wind.
Peter Shattuck, Massachusetts director for the Acadia Center, which advocates for clean energy, said it might not make sense to require customers across New England to pay for new pipeline capacity that may only be needed for about three years under the report’s most optimistic demand scenario. He said the report also failed to consider what might happen to energy markets if the price of oil remains unusually low.
Opponents of building new pipelines into the region attacked Synapse’s preliminary results, released in late December. The opponents accused the Patrick administration of stacking the deck in favor of natural gas and said the preliminary Synapse report contained a monumental calculation error that would significantly change the results if corrected.
In documents released along with the report, Synapse said corrections and updates to the modeling results were made after receiving feedback from various stakeholders. But Synapse described its calculation errors as small and said correcting them did not have a substantive impact on the estimate of gas capacity shortages.
Yet the changes appeared fairly significant. The original report projected the natural gas shortfall at 600 million to 1.1 billion cubic feet of gas initially and 1.2 billion to 2.2 billion cubic feet by 2030. The final report put the shortfall at 600 to 800 million cubic feet in 2020 and 600 million to 900 million cubic feet by 2030.

