PORTLAND, Maine — Utilities regulators on Tuesday opened the door to proposals for new natural gas storage facilities in the state, as one company already eyes sites in Brewer and Rumford.
Maine Energy Storage, a joint venture of the Boston-based Energy Management Inc. and a subsidiary of the Japanese JGC Corp., earlier this month submitted its proposal for both sites to regulators, outlining potential storage sites off Sid Arey Drive in Brewer and near Emera Energy’s natural gas plant in Rumford. It plans to develop only one.
The company asked regulators on Sept. 1 to have electricity customers pay up to $25 million per year to support one or both of its natural gas storage facilities. The Maine Public Utilities Commission did not formally open that proposal process until Tuesday.
In its proposal, the company urged regulators to select one site or the other for a storage facility that could hold up to 1.3 billion cubic feet of liquefied natural gas that could be tapped when other sources of gas are limited.
The formal request for proposals follows a law passed during the last legislative session that expands regulators’ authority to try and address a wintertime shortage of pipeline capacity for natural gas.
In the winter, gas goes first to heating uses and then to power electricity generators. During winters colder than the last, that led to spikes in the price, first experienced by large power customers and later by smaller commercial and residential customers.
A 2013 energy bill gave regulators the ability to have ratepayers fund up to $75 million in annual contracts with pipeline companies, in a case that resulted in two years of study and now depends on actions taken by other states in the region.
Another bill passed during the last session allows regulators to set aside $25 million of that annual allotment for gas storage, if the $75 million is not used for pipeline contracts, at a term of 20 years.
Just like a pipeline, a storage facility could contract with generators, liquified natural gas exporters or others to supply gas.
In its proposal, Maine Energy Storage said it has already secured options on the land in Brewer and Rumford. The Brewer facility would receive gas from the Maritimes and Northeast Pipeline and the Rumford facility would connect with the Portland Natural Gas Transmission System.
The company’s proposal anticipated that either project would cost up to $250 million, an investment financed by JGC, the Japanese firm with about 200 engineers at its U.S. headquarters in Houston.
Approval of the project will depend on regulators’ assessment of the value to electricity ratepayers. The company asserted in its application that its proposal will cost electric ratepayers less than having them pay to expand gas pipelines.
Either of the facilities would offload gas from existing pipelines, liquefying and storing it for times of peak demand or capacity constraints. The facility would vaporize and redeliver the gas to customers as needed.
The joint venture also includes Clear Energy LLC, which also worked on a natural gas generator proposal in Rockland, scuttled by local officials.
Clear Energy owner Evan Coleman told lawmakers in testimony last year that the Rumford proposal had support from nearby mill owner Catalyst Paper, General Electric, the Maine Department of Economic and Community Development, the Mahoosuc Land Trust, the Oxford County Commissioners and Rumford Hospital.
Those groups praised the economic benefits for the region, and the Mahoosuc Land Trust said it supported the proposal for the possibility of addressing peak natural gas demand while possibly preventing construction of natural gas pipelines that executive director James Mitchell wrote “may not be needed.”
In a proposed timeline, the company said that it hopes to secure a contract from regulators by June 2017, close financing and secure permits by August 2018 and begin construction in 2019 for operation in 2021.
View Maine Energy Storage’s full proposal below.