Workers from Cianbro and Shaw Brothers install a natural gas pipeline along Route 88 in Cumberland Foreside on September 10, 2014. Gordon Chibroski/staff photographer

Three natural gas pipeline operators are looking to raise the rates paid by Maine consumers, who are already dealing with rising electricity prices.

Algonquin Gas Transmission and Maritimes & Northeast Pipeline have asked the Federal Energy Regulatory Commission to authorize higher rates. And Granite State Gas Transmission has reached a settlement with regulators that will result in higher bills for ratepayers.

Interstate pipelines are used by companies that supply gas to thousands of Maine homes and businesses for heat, hot water and cooking. The pipelines also send natural gas to power plants that generate electricity, meaning the changes will have a ripple effect on the cost of electricity.

The Granite State line serves customers of its owner, Unitil Corp. Summit Natural Gas, Bangor Natural Gas and Maine Natural Gas tap the Algonquin and Maritimes lines.

Unitil’s settlement with state regulators and consumer advocates in Maine and New Hampshire would raise costs by about 2.6 percent from what they were in the 2023-24 heating season, or about $4 per month – $24 for the season – for a residential heating customer, a spokesman said.

The other pipeline operators proposed rate increases of around 30%. The impact on Maine taxpayers, particularly those served by Algonquin, could be less because of negotiated contracts with the gas utilities that distribute the fuel, said Carol MacLennan, senior attorney for the Maine Public Utilities Commission. Settlement negotiations are ongoing and, if successful, likely won’t be concluded before late November or December, she said.

“They usually go big,” MacLennan said of the proposed increases. “In the process of either litigation or settlement, there’s usually a tug-of-war and things get worked out.”

Four natural gas distribution companies operate in Maine and serve a relatively small number of users: Unitil, the largest supplier, has about 33,000 customers; Bangor Natural Gas has 8,500; and Maine Natural Gas and Summit Natural Gas each have about 6,000 customers. In contrast, Central Maine Power and Versant Power, Maine’s two dominant electric utilities, together serve about 800,000 customers.

Assistant Public Advocate Andrew Landry said the proposed 30 percent increase applies to firm service rates, which is the rate that guarantees space on a transmission line for gas delivery. The firm’s services are part of the total revenue, he said.

A price increase would affect plants that use natural gas – rather than hydro, oil, coal, wind or solar – to generate electricity. Natural gas accounts for approximately half of the region’s electricity production, conformable to ISO-New England, the network operator. Higher natural gas prices could increase across the region electricity costs that are already on the rise. To reduce greenhouse gas emissions, electricity is increasingly used to heat and cool buildings and power vehicles.

“It’s really, really needed in the New England region to keep the heat on and the lights on,” MacLennan said. “Whenever gas prices go up, electricity prices go up.”

Algonquin, which has 1,100 miles of the pipeline that stretches from New Jersey to north of Boston, said the rate request is in response to more than $500 million in capital improvements to modernize its system and represents “substantial increases” in operating expenses and maintenance and increased costs for property insurance, labor and materials. He also cited rising property taxes and rising cost of debt due to higher interest rates.

Maritime and Northeastwhich has 343 miles of pipeline connecting Nova Scotia and New Brunswick to the Canadian-US border near Baileyville, Maine and continuing into Massachusetts, said the tariff announcement “comes at a time of uncertainty” for the company.

“The Maritimes has historically been a supply-driven pipeline system, but (the) amount of capacity available in the Maritimes system far exceeds the amount of supply available to the system,” it said.

Some pipeline users oppose the proposed rate increase.

“Maritimes has not demonstrated that its proposed tariffs and other tariff changes as part of … a general tariff case are fair and reasonable,” Repsol Energy North America Corp said. FERC. “Accordingly, the proposed tariffs and tariff changes should be suspended for the entire statutory period and subject to refund.”

Regulators should also set the rate case for a full hearing before an administrative law judge “so that every aspect of the Maritimes’ proposals can be fully examined and evaluated,” it said.

National Grid Gas Deliveries Cos. told FERC that the Maritimes is looking for an overall increase of about 31.4 percent and that a “significant amount of unsubscribed capacity” would result in a “reduced economic life of the Maritime system.” It asked FERC to require the Maritimes to schedule a hearing “on all aspects of the Maritimes’ rate filing.”

A National Grid spokesman did not respond to an email seeking details on the rate hike it cited.

Max Bergeron, a spokesman for Enbridge Inc., the parent company of Algonquin and Maritimes, based in Alberta, Canada, said the final rates will not be known until FERC proceedings are concluded. It could take a while: Pipeline companies are responding to requests for information, and meetings are scheduled for this fall with regulators and customers, he said.

The regulatory rate-setting process gives FERC and its clients the opportunity to review filings and obtain documents “regarding the pipeline costs that underlie the submitted rates,” Bergeron said.

The volume of residential natural gas use in Maine changed little between 2018 and 2022, even as total consumption rose 27 percent to 59 billion cubic feet, conformable to the Energy Information Administration. Residential consumption in 2022 was 3.1 billion cubic meters, down 1% from four years earlier.

HIGH DEMAND, FIXED COSTS

Andrew Price, president and chief executive of Competitive Energy Services, a Portland consulting group, credited Maine’s widespread use of electric heat pumps for reducing natural gas consumption.

To help meet greenhouse gas reduction goals, New England states are looking to phase out natural gas for uses other than industrial consumption and power generation. Maine Legislature this year scaled back an ambitious proposal to limit the expansion of natural gas and instead required state studies of its use.

If natural gas prices rise, alternatives like home heat pumps are more attractive, Price said.

“As people switch to these alternatives, natural gas consumption declines and rates have to rise again per unit of energy to recover fixed asset costs in a declining unit volume, and the cycle accelerates,” he said .

Electric power generation accounted for the largest portion of Maine’s natural gas consumption at 24.7 billion cubic feet in 2023, up 79.5 percent from 2018, reflecting a shift away from coal and oil, which they are bigger polluters.

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