Project Beacon Could Lower Massachusetts Gas Bills by $367 Million Annually
The Institute for Energy Research is studying the potential impact of Project Beacon on Massachusetts gas and electricity bills. The project, proposed by Enbridge, aims to expand the Algonquin Gas Transmission system through pipe replacements, pipeline loops, and added compression. This expansion would provide an additional 300 million cubic feet per day of firm capacity.
The study estimates that this increase in capacity could lower Algonquin Citygate natural gas prices by an average of $1.27 per million British thermal units during the winter months. The greatest benefit would come on particularly cold days when existing pipeline capacity is tight, causing gas prices to surge above those in producing regions.
The study also found that Beacon's additional capacity would lower winter wholesale electricity prices by an average of $4.78 per megawatt-hour. This reduction in prices would lead to a decrease in the need for oil-fired generators, resulting in an estimated 8.4 million gallon reduction in fuel oil consumption during the winter months.
The study estimates that applied to the seven winters from 2019-2020 through 2025-2026, the average gas and electricity savings for Massachusetts ratepayers would be around $367 million per winter. For a household heating with natural gas and buying electricity from the grid, the estimated average gross savings would be $95 per winter: $72 on gas and $23 on electricity.
The study also notes that Beacon's increased capacity could provide an additional source of gas for Massachusetts ratepayers, reducing their dependence on maritime shipments. However, it is essential to consider the impact of the Jones Act, which restricts domestic fuel delivery to New England, limiting the number of ships available to carry LNG or propane tankers.