Maine Revised Statutes Title 35-A Sec. 1904 – Energy cost reduction contracts; physical energy storage contracts
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The commission in consultation with the Public Advocate and the Governor’s Energy Office may execute an energy cost reduction contract or a physical energy storage contract, or both, in accordance with this section. In no event may the commission execute energy cost reduction contracts for the transmission of greater than a cumulative total of 200,000,000 cubic feet of natural gas per day. In no event may the commission execute physical energy storage contracts for a total amount that exceeds $25,000,000 annually, and in no event may the total amount of all contracts entered into under this section exceed $75,000,000 annually. [PL 2015, c. 445, §5 (AMD).]
1. Prior to executing an energy cost reduction contract. Before executing an energy cost reduction contract, the commission shall:
A. Pursue, in appropriate regional and federal forums, market and rule changes that will reduce the basis differential for gas coming into New England and increase the efficiency with which gas brought into New England and Maine is transmitted, distributed and used. If the commission concludes that those market or rule changes will, within the same time frame, achieve substantially the same cost reduction effects for Maine electricity and gas customers as the execution of an energy cost reduction contract, the commission may not execute an energy cost reduction contract; [PL 2015, c. 329, Pt. E, §1 (AMD).]
B. Explore all reasonable opportunities for private participation in securing additional gas pipeline capacity that would achieve the objectives in subsection 2. If the commission concludes that private transactions, within the same time frame, achieve substantially the same cost reduction effects for Maine electricity and gas customers as the execution of an energy cost reduction contract, the commission may not execute an energy cost reduction contract; and [PL 2015, c. 329, Pt. E, §1 (AMD).]
C. In consultation with the Public Advocate and the Governor’s Energy Office, hire a consultant with expertise in natural gas markets to make recommendations regarding the execution of an energy cost reduction contract. The commission shall consider those recommendations as part of an adjudicatory proceeding under subsection 2. [PL 2013, c. 369, Pt. B, §1 (NEW).]
[PL 2015, c. 329, Pt. E, §1 (AMD).]
Terms Used In Maine Revised Statutes Title 35-A Sec. 1904
- Basis differential: means the difference between the so-called Henry Hub spot price for natural gas and the corresponding cash spot price for natural gas in New England. See Maine Revised Statutes Title 35-A Sec. 1902
- Commission: means the Public Utilities Commission. See Maine Revised Statutes Title 35-A Sec. 102
- Contract: A legal written agreement that becomes binding when signed.
- Energy cost reduction contract: means a contract executed in accordance with this chapter to procure capacity on a natural gas transmission pipeline, including, when applicable, compression capacity. See Maine Revised Statutes Title 35-A Sec. 1902
- Gas utility: includes every person, that person's lessees, trustees, receivers or trustees appointed by any court owning, controlling, operating or managing any gas plant for compensation within this State, except when gas is made or produced on and distributed by the maker or producer through private property alone solely for its own tenants and not for sale to others, or when the gas is sold solely for use in vehicles fueled by natural gas or to a liquid gas system that serves fewer than 10 customers as long as no portion of the liquid gas system is located in a public place or that serves a single customer if the liquid gas system is located entirely on the customer's premises. See Maine Revised Statutes Title 35-A Sec. 102
- in writing: include printing and other modes of making legible words. See Maine Revised Statutes Title 1 Sec. 72
- ISO-NE region: means the region in which the New England bulk power system operated by the independent system operator of the New England bulk power system or a successor organization is located. See Maine Revised Statutes Title 35-A Sec. 1902
- Liquefied natural gas storage capacity: means storage capacity for liquefied natural gas installed in the State on or after January 1, 2016 that will benefit the State's energy consumers during times of regional supply constraint due to capacity limitations of interstate or intrastate pipelines or local distribution systems. See Maine Revised Statutes Title 35-A Sec. 1902
- Natural gas pipeline utility: includes every person, its lessees, trustees, receivers or trustees appointed by any court owning or operating for compensation within this State any pipeline, including pumping stations, storage depots and other facilities, for the transportation, distribution or sale of natural gas, or any person or corporation which has applied to the Federal Energy Regulatory Commission for a certificate of public convenience and necessity or to the Public Utilities Commission for a certificate of authorization to operate a natural gas pipeline within the State. See Maine Revised Statutes Title 35-A Sec. 102
- Physical energy storage capacity: means liquefied natural gas storage capacity. See Maine Revised Statutes Title 35-A Sec. 1902
- Physical energy storage contract: means a contract executed in accordance with this chapter for physical energy storage capacity. See Maine Revised Statutes Title 35-A Sec. 1902
- Transmission and distribution utility: means a person, its lessees, trustees or receivers or trustees appointed by a court, owning, controlling, operating or managing a transmission and distribution plant for compensation within the State, except where the electricity is distributed by the entity that generates the electricity through private property alone solely for the use of:
1-A. Prior to executing a physical energy storage contract. Before executing a physical energy storage contract, the commission shall:
A. Pursue, in appropriate regional and federal forums, market and rule changes that will reduce the reliability risk faced by off-system natural gas users or on-system consumers and will provide a physical hedge to higher priced on-peak, winter period natural gas supplies. If the commission concludes that those market or rule changes will, within the same time frame, achieve substantially the same cost reduction effects for the State’s electricity and gas customers as the execution of a physical energy storage contract, the commission may not execute a physical energy storage contract; and [PL 2015, c. 445, §5 (NEW).]
B. Explore all reasonable opportunities for private participation that would achieve the objectives in subsection 2?A. If the commission concludes that private transactions, within the same time frame, achieve substantially the same cost reduction effects for the State’s electricity and gas customers as the execution of a physical energy storage contract, the commission may not execute a physical energy storage contract. [PL 2015, c. 445, §5 (NEW).]
[PL 2015, c. 445, §5 (NEW).]
2. Commission determination of benefits for an energy cost reduction contract. After satisfying the requirements of subsection 1, the commission may execute or direct one or more transmission and distribution utilities, gas utilities or natural gas pipeline utilities to execute an energy cost reduction contract if the commission has determined, in an adjudicatory proceeding, that the agreement is commercially reasonable and in the public interest and that the contract is reasonably likely to:
A. Materially enhance natural gas transmission capacity into the State or into the ISO-NE region and that additional capacity will be economically beneficial to electricity consumers, natural gas consumers or both in the State and that the overall costs of the energy cost reduction contract are outweighed by its benefits to electricity consumers, natural gas consumers or both in the State; and [PL 2015, c. 445, §5 (AMD).]
B. Enhance electrical and natural gas reliability in the State. [PL 2013, c. 369, Pt. B, §1 (NEW).]
[PL 2015, c. 445, §5 (AMD).]
2-A. Commission determination of benefits for a physical energy storage contract. After satisfying the requirements of subsection 1?A, the commission may execute or direct one or more transmission and distribution utilities, gas utilities or natural gas pipeline utilities to execute a physical energy storage contract if the commission has determined, in an adjudicatory proceeding, that the physical energy storage contract is commercially reasonable and in the public interest and that the contract is reasonably likely to:
A. Materially enhance liquefied natural gas storage capacity in the State or the ISO-NE region and ensure that additional physical energy storage capacity will be economically beneficial to electricity consumers, natural gas consumers or both in the State and that the overall costs of the contract are outweighed by its benefits to electricity consumers, natural gas consumers or both in the State; [PL 2015, c. 445, §5 (NEW).]
B. Provide the opportunity for access to lower cost natural gas at times of regional peak demand for natural gas supplies or in the event of upstream natural gas infrastructure disruption; and [PL 2015, c. 445, §5 (NEW).]
C. Enhance electrical and natural gas reliability in the State. [PL 2015, c. 445, §5 (NEW).]
[PL 2015, c. 445, §5 (NEW).]
3. Parties to an energy cost reduction contract or a physical energy storage contract. The commission may execute, or direct to be executed, an energy cost reduction contract or a physical energy storage contract, or both, that contain the following provisions.
A. The commission may direct one or more transmission and distribution utilities, gas utilities or natural gas pipeline utilities to be a counterparty to an energy cost reduction contract or a physical energy storage contract, or both. In determining whether and to what extent to direct a utility to be a counterparty to one or more contracts under this subsection, the commission shall consider the anticipated reduction in the price of gas or electricity or a reduction in the on-peak winter period price of gas or electricity, as applicable, accruing to the customers of the utility as a result of one or more contracts as determined by the commission in an adjudicatory proceeding.
Any economic loss, including but not limited to any effects on the cost of capital resulting from an energy cost reduction contract or a physical energy storage contract for a transmission and distribution utility, a gas utility or a natural gas pipeline utility, is deemed to be prudent and the commission shall allow full recovery through the utility’s rates. [PL 2015, c. 445, §5 (AMD).]
B. If the commission concludes that an energy cost reduction contract or a physical energy storage contract can be achieved with the participation of other entities, the commission may contract jointly with other entities, including other state agencies and instrumentalities, governments in other states and nations, utilities and generators. [PL 2015, c. 445, §5 (AMD).]
C. The commission may execute an energy cost reduction contract or a physical energy storage contract as a principal and counterparty. [PL 2015, c. 445, §5 (AMD).]
[PL 2015, c. 445, §5 (AMD).]
4. Approval by the Governor. The commission may not execute or direct the execution of an energy cost reduction contract or a physical energy storage contract unless the Governor has in writing approved the execution of the energy cost reduction contract or a physical energy storage contract.
[PL 2015, c. 445, §5 (AMD).]
SECTION HISTORY
PL 2013, c. 369, Pt. B, §1 (NEW). PL 2015, c. 329, Pt. E, §1 (AMD). PL 2015, c. 445, §5 (AMD).