$1.3 Billion in Total Savings from PennEast Pipeline for Two Winters Alone
(Wyomissing, Pa.) – Independent market experts Concentric Energy Advisors issued a new report today finding that the PennEast Pipeline could have saved New Jersey and eastern Pennsylvania families and businesses $435 million in energy costs last winter.
The report conservatively excluded “extreme peak days,” like January 5, 2018, when natural gas prices in the New Jersey market reached 31 times higher than the Pennsylvania supplies the PennEast Pipeline will access. Concentric now has found that in two recent winters alone, the PennEast Pipeline would have saved the region more than $1.3 billion if it were operational.
“The PennEast Pipeline is the only project needlessly being debated in the region that can reduce carbon emissions, lower costs and provide reliable round-the-clock energy,” said Pat Kornick, spokesperson for the PennEast Pipeline Company. “In two winters alone, the PennEast Pipeline Project would have paid for itself by delivering more than $1.3 billion in energy savings to area families and businesses.”
“As policy makers look to renewable energy investments for the future, it is important to keep in mind that natural gas and the PennEast Pipeline are a commonsense partner with wind and solar,” added Kornick. “The low-cost and reliable nature of natural gas provides the foundation to make additional investments in renewables while protecting ratepayers, keeping energy costs low and ensuring a reliable grid.”
According to the study, approximately $246 million would have been saved on the electric markets – where natural gas increasingly has replaced coal and oil for electric generation – while simultaneously reducing carbon emissions. New Jersey has the 11th highest electric costs in the country. PJM, the independent electric grid operator for New Jersey and Pennsylvania, affirmed the PennEast Pipeline is needed for future grid reliability and geographic fuel diversity in a 2016 report to federal regulators.
Energy-intensive industrial customers, like manufacturing, would have seen $144 million in savings last winter, according to the report.
“Political leaders often talk about providing stable, middle-class jobs, and this is a clear opportunity not just during construction but for decades to come,” said NJBIA President Michele Siekerka. “For manufacturers that require low-cost energy to be competitive, the PennEast Pipeline is a lifeline to keep operations and jobs here in New Jersey. Anything that can lower costs and tackle the affordability problem for Garden State businesses helps our long-term economic growth and job creation.”
Though not factored into the recent study, additional savings could be realized during non-peak demand months. In October 2017, natural gas pricing in New Jersey was on average three times higher than Pennsylvania gas supplies.
The $435 million in higher costs incurred by area consumers last winter counter incorrect claims that there is sufficient pipeline capacity and even a surplus of natural gas in the region, – misguided assertions peddled by New Jersey opposition groups. Additionally, federal regulators found in their approval of the PennEast Pipeline such opposition claims, including findings by the New Jersey Division of Rate Counsel, were “unpersuasive,” “unavailing” and “misplaced.”
The lack of natural gas pipelines into New Jersey and Pennsylvania also has negative implications for the environment, when power generators are forced to rely on dirtier forms of energy to provide power. PJM released a February 26 report on the performance of the grid during the 10-day cold snap last winter, finding 47 percent of the power generation came from coal and oil, with 68 percent of oil generation needed because units couldn’t run natural gas as their primary fuel.
In Massachusetts, power generators burned 2 million barrels of oil to maintain power, which the state Environmental Secretary called “nothing but a disaster.” Massachusetts also needed, for the first time in American history, Russian liquefied natural gas to warm homes in the Boston after years of blocking new natural gas infrastructure.
A copy of the 2018 Concentric Study can be found here.
What Others Are Saying
“Natural gas has helped New Jersey lower energy bills by 35 percent since 2010, reduce carbon emissions under 2000 levels and support a diverse and reliable grid,” said Anthony Russo, president of the Commerce and Industry Association of New Jersey. “Despite that, this winter has shown that we still don’t have enough natural gas infrastructure, and our economy and environment remain vulnerable. The PennEast Pipeline would have delivered another $435 million in savings this past winter had it been in operation. Every dollar that isn’t spent on overhead is another dollar spent on reinvestment in businesses and employees. To build a stronger economy, we need projects like the PennEast Pipeline.”
“From an economic standpoint, PennEast makes complete sense for New Jersey,” noted Mark Longo, director of Engineers Labor-Employer Cooperative. “Businesses, developers and residents don’t want unstable energy sources and high energy bills. PennEast would give us more reliable, stable energy, lower rates for ratepayers and catalyze growth throughout the region. New Jersey needs to seize this opportunity.”
“As the recent study shows and has been a cogent argument since the beginning of the PennEast project, investments in natural gas infrastructure are necessary to achieve an affordable and competitive business environment, both of which need improvement if we are to begin an economic revival in New Jersey,” added Tom Bracken, president and CEO of the New Jersey Chamber of Commerce. “For a project that has already been found to be safe for the environment, able to create thousands of jobs, and bring substantial cost relief to businesses, the PennEast Pipeline is a vital infrastructure project our policymakers should embrace. It will also help to offset investments needed in higher-cost renewable energy, to protect ratepayers.”
“The facts are the facts: PennEast would be a win for New Jersey ratepayers,” said Greg Lalevee, business manager of International Union of Operating Engineers Local 825. “The project would generate hundreds of millions in savings, reduce carbon emissions, create jobs and significantly improve the reliability of our energy infrastructure. It’s a smart move for New Jersey.”
About PennEast Pipeline Company
Representing an approximately $1 billion investment, the approximately120-mile, primarily 36-inch, underground PennEast Pipeline will reduce energy costs and support thousands of jobs with clean, American energy. The PennEast Pipeline will originate in Dallas, Luzerne County, in northeastern Pennsylvania, and terminate at Transco’s pipeline interconnection near Pennington, Mercer County, New Jersey.