New England Power Grid Warns of Winter Natgas Constraints

New England should have enough electricity to meet demand this winter but the natural gas pipeline constraints that caused price spikes on the coldest days last winter will be a "concern" again this year, the region's power grid operator said Thursday.

ISO New England, the grid operator, warned the region's dependence on gas puts it in a "vulnerable position" because current pipelines cannot deliver all the gas required for both heating and power generators, especially during cold weather.

Last winter, gas demand and prices hit record highs because there was not enough gas available to heat homes and businesses and for power generation on the coldest days due to the pipeline constraints. That left several generators unavailable when needed most, threatening grid reliability.

"Because of the retirement of several generators since last winter, as well as the possibility of pipeline constraints, the ISO and stakeholders implemented another winter program to increase the fuel availability for oil- and natural-gas-fired power plants," said Vamsi Chadalavada, executive vice president and chief operating officer of ISO New England.

Under its winter reliability program, the ISO said so far 81 oil and dual-fuel units have committed to store more than 4 million barrels of oil and eight gas-fired units have contracted for about 900 million British thermal units of liquefied natural gas (LNGLF) in case gas supplies run short again.

Since last winter, the ISO said more than 1,800 megawatts of nuclear, coal and oil-fired generation will be unavailable, including Entergy Corp's 615-MW Vermont Yankee nuclear reactor that will be retired at the end of 2014.

Despite the retirements, the ISO said the grid should have access to about 32,400 MW of generation if needed.

The ISO forecast power demand this winter will peak at 21,085 MW under normal weather conditions or 21,705 MW under extreme cold.

Last winter, demand peaked at 21,453 MW in December 2013. The highest demand ever recorded in New England was 28,130 MW in August 2006.

The biggest power companies in New England include units of National Grid Plc, Northeast Utilities, Iberdrola SA, NextEra Energy Inc, Dominion Resources Inc , Exelon Corp and NRG Energy Inc.

(Reporting by Scott DiSavino; Editing by Richard Chang)