On April 20, 2016 Kinder Morgan announced that it has decided to suspend work and spending on its plans to build the 1.27 million Dth/d Tennessee Gas Pipeline Northeast Energy Direct (NED) Pipeline Project. This could lead to increased risks of winter price spikes in New England.

The NED project was proposed to transport more than 1 Bcf/d of natural gas from the shale-gas production regions in Pennsylvania to markets in New England. Kinder Morgan reported it was suspending all work on the pipeline project due to its lack of contractual commitments from New England customers (power producers & natural gas utilities). Kinder Morgan also cited regulatory procedures in New England states that do not allow electric utilities to enter into binding commitments for pipeline capacity as a factor behind their decision. Lastly, Kinder Morgan cited the combination of low natural gas prices, current market conditions, and counter-party financial instability that created uncertainty into Kinder Morgan’s sourcing of incremental supply for the project as additional reasons behind the decision to suspend the project. Although Kinder Morgan did not attribute growing opposition to the proposed project from politicians, local residents, and environmentalists as a reason behind their decision to suspend the project, it appears likely the company did take that into consideration to indefinitely shelve the project.

Although the additional gas expected to be available from the Algonquin Incremental Market (AIM) project scheduled to be in service in November 2016 should keep natural gas and electricity prices during milder winter weather (like that seen during winter 2015-16) relatively stable, any return to colder-than-normal weather still presents considerable risk as the demand for natural gas for heating and the regional dependence on natural gas for electric generation grows. NED originally had been expected to alleviate that risk when it began service in November 2018 and its indefinite postponement has the potential to leave New England vulnerable to winter price spikes in the coming years during periods of extreme cold.