Eversource 2006 Annual Report Download - page 15

GAS SUPPLY
GUARANTEED
The LNG facility provides a
reliable and safe supply of
natural gas. On the coldest
days, when gas prices are
highest, this facility will
provide a lower-cost supply
for our customers.
Lower the temperature of natural gas to -260
degrees and it condenses and becomes liquid –
taking up 1/600th of the space it did in its
gaseous state.
This bit of simple chemistry means that if
YankeeGas can efficiently store natural gas in
the form of liquefied natural gas (LNG), it can
buy it in periods of low demand when the price
is typically lower. We can then draw on it in
winter, when demand is up and prices tend to
behigher and more volatile.
Storagecapacity is vital to making this strategy
work. That’s why Yankee Gas blended a little
chemistry of its own with the community of
Waterbury, Connecticut, and is here building
an LNG storage facility capable of storing
the equivalent of 1.2 billion cubic feet of
natural gas, giving it enough capacity to heat
85,000 homes for a month, more than one-
third of Yankee Gas customers.
Infact, the LNG facility represents a win for
Yankee Gas customers and the community. It’s
the centerpiece of Yankee Gas’ efforts to lower
customers’ natural gas pipeline capacity and
energy charges by $26.5 million annually. The
site we selected is strategically located in one of
YankeeGas’ largest local distribution systems.
The location also is near a major distribution
pipeline interconnection that enables efficient
distribution of natural gas – a valuable
operational benefit.
But at the same time, it was a former
manufactured gas plant site slated for clean-up,
so there were challenges to developing it.
With strong support and cooperation among
the Waterbury mayor’s office and various
local government boards from the Zoning
Commission to the city’s Department of
Emergency Management, as well as the state
Department of Environmental Protection
and the Department of Public Utility Control,
Yankee Gas began environmental remediation
of the site, and then construction of the facility.
On schedule for operation in the 2007/2008
heating season, the $108 millionLNG storage
and production facility – Yankee Gas’ largest-
ever capital project – represents an operational,
financial, environmental and partnering success.
Itassures additional security of fuel supply,
operational flexibility and gas price stabilization,
all of which benefit our customers.
At the same time, the new facility will be a
substantial addition to Yankee Gas’ rate base
for financial return purposes. The results:
customer benefits, company benefits and
shareholder benefits all in one package.
THE CAPACITY FOR GROWTH
NU 2006 ANNUAL REPORT 13
The $108 million storage
facility is the largest
construction project in
Yankee Gas’ history.