SKU: 52848
Author: Wood Mackenzie

Insight 14 October 2016

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Report summary

The New England gas market features the largest seasonal price swing in North America. Gas pipeline capacity into the area is limited and while it is sufficient to meet the area's demand during the bulk of the year, it often falls short in the winter. Until recently, pipeline expansion seemed the most likely solution to the New England peak day problem, however pipeline expansion has met with heavy opposition in the area and finding a regulatory solution to pay for pipeline has proved challenging. Recent rulings in Massachusetts and New Hampshire blocking electric utilities from socializing pipeline expansion costs to rate payers makes the path forward for Spectra's Access Northeast even more difficult. In this insight we will explore the New England winter market's need for a peak day solution given power retirements compounding the already constrained market, and examine what the winter markets will look like without additional pipeline expansion.

Introduction
- With the new Massachusetts Supreme Court ruling, only a small amount of new pipeline build remains
- Power retirements further stress the gas markets
- Canadian imports can rise--but not offset--the peak demand
- LNG and oil to fill the gap left by pipeline build
- Weak global prices keep Algonquin prices in check
- Algonquin (AGT) Price Scenarios
Conclusion