Maine PUC declines funds for new LNG peakshaving plant

The Maine Public Utilities Commission (PUC) declined funding for a new LNG peakshaving facility in the U.S. northeasternmost state. 

The commission has been authorized by the state legislature to provide up to $25 million each year to fund capacity at new LNG peakshaving facilities, however, after evaluating 11 proposals, it declined the funding, stating that expanding regional pipelines would mitigate price spikes during the winter peak periods.

PUC noted in its order that none of the proposals satisfy the statutory requirements, hence the commission cannot order the execution of the physical energy storage contract (PESC).

None of the proposals were commercially reasonable, or were in the public interest, the PUC’s order says.

The Maine local distribution companies argue that the proposals don’t demonstrate a need in Maine for a long-term PESC with an off-system LNG storage facility of the size and design proposed by the various project sponsors in this case.

Moreover, the Maine LDCs state that there is an unacceptable amount of uncertainty and risk associated with entering into any of the proposed PESCs. This is especially case in that adding the costs of PESC to Maine LDC rates will render natural gas less able to compete with other fuels, the order reads.

Argus cites Repsol as saying that the additional peak shaving facilities are not needed as Maine’s gas demand tops out at 300 million cubic feet per day in peak demand periods.

The company that owns the Canaport LNG terminal in Canada, added that over the last three winters, it supplied over 600 million cubic feet per day of natural gas to the New England states, during the peak demand periods.