Holyoke utility imposes moratorium on new gas service, citing pipeline constraints

The municipal utility serving the town that hosts the headquarters for the operator of the regional electric grid has informed its customers that the utility “is unable to accommodate new natural gas service requests due to the lack of natural gas availability in the region.” Holyoke Gas & Electric adds, “Recent proposals that would increase natural gas capacity in the region have been met with opposition, and the current pipeline constraints are causing significant adverse environmental and economic impacts on the region's ratepayers."

Holyoke Gas & Electric is a consumer-owned municipal utility established in 1902 through the purchase of a gas and electric plant from the Holyoke Water Power Company. According to the utility, the town saw ownership of a municipal utility "as a way to stabilize rates and keep local control over their energy services." As a municipal utility, Holyoke Gas & Electric is operated as a not-for-profit concern, and is owned by the community it serves. The utility cites public power advantages from this structure including operating in the local public interest, with local control over rates and services, local ownership, and reliance on local employees. In 1999, the utility acquired the Holyoke Dam, the city's canal system, and the remainder of the Holyoke Water Power Company's assets. The utility touts its ability to produce over 65% of its electricity needs from these renewable hydropower resources and cites "some of the lowest utility rates in New England."

Holyoke's Gas Division provides natural gas service through about 9,900 meters in Holyoke and Southampton. But on January 28, 2019, the utility gave its customers notice that it had placed a moratorium on most new natural gas service installations. According to that notice, the utility's natural gas customers are served by an interstate pipeline "which has become severely constrained due to a dramatic increase in demand over the last two decades," with "no corresponding increase in pipeline capacity to deliver additional supply to the region." As a result of significant growth in demand for natural gas by Holyoke's customers, HG&E said it is "forced to impose a moratorium on new natural gas connections until the capacity issue is addressed."

The utility further explained, "While inexpensive natural gas has never been more plentiful in the United States, there is insufficient pipeline capacity in our region to deliver additional load. Recent proposals that would increase natural gas capacity in the region have been met with opposition, and the current pipeline constraints are causing significant adverse environmental and economic impacts on the region's ratepayers." In its notice, the utility noted that due to the lack of natural gas during peak demand periods, "more electric generators are forced to switch to oil, while coal generators are called upon to operate, causing significant spikes in greenhouse gas emissions." Regional electric grid operator ISO New England, which is headquartered in Holyoke, reported that during a 15-day cold spell in January 2018, over two million barrels of oil were burned to generate electricity due to the lack of natural gas, more than the total amount of oil burned in 2017.

Beyond increased emissions, the utility also used ISO-NE data to show how "the lack of natural gas has a significant impact on energy costs throughout New England." Citing data from ISO-NE, the utility observed that during the two-week period from December 26, 2017 to January 8, 2018, electricity prices experienced an "approximately $700 million increase in energy costs for New England ratepayers compared to the prior year."

Holyoke Gas & Electric says it is working with gas utility Columbia Gas of Massachusetts to explore a solution involving system upgrades in other communities to "address local capacity issues, which will help reduce regional carbon emissions, improve reliability, and support local economic development." In the meantime, HG&E says its moratorium on new natural gas connections will remain in place "until the capacity issue is addressed."