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Energy demand, prices soar as temps drop


HARTFORD — Utilities, power companies and New England’s grid operator moved on several fronts Tuesday to guarantee sufficient supplies of energy in the Northeast to keep homes and businesses warm as temperatures plunged to near-record low levels.

Not surprisingly, demand for natural gas and electricity in New York City and New England jumped significantly as temperatures hovered at or below zero, federal energy officials said. Natural gas demand was forecast to increase by 8 percent on Tuesday in New England and by 2 percent in New York, the U.S. Energy Information Administration said.

ISO-New England, the region’s power grid operator, told transmission and generating companies on Tuesday to halt routine maintenance to free up resources for power exports to other regions if necessary, spokeswoman Marcia Blomberg said. Some electric power plants have switched to burning oil and coal in New England in response to rising natural gas prices, she said.

With pipelines at capacity, utilities and generators are tapping into gas storage to meet demand. The flow of liquefied natural gas from a terminal in Canada and eastern Canadian imports into New England jumped 75 percent between Monday and Tuesday, federal officials said. And Algonquin Gas Transmissions, a unit of Spectra Energy in Houston, restricted gas purchases by customers to no more than what they’ve agreed to buy.

“It’s basically a way to keep the system in line,” Spectra spokesman Phil West said. “People need to play by the rules that are set.”

Utilities and generators are expected to pay a premium for access to stored natural gas. But federal energy officials say the impact of high prices could be reduced somewhat as regulators eventually rule on rate increases.

The price of oil rose Tuesday, with the unusually cold weather pushing up demand. Heating oil and natural gas prices also edged up.

Rising demand for natural gas for heat and power is straining regional pipeline capacity. Algonquin Gas Transmissions is proposing to build and replace pipelines in Connecticut, Massachusetts, New York and Rhode Island, install a new pipeline to span the Hudson River in New York and build compressor stations to boost gas flow.



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