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October 2, 2014

To the Commission:

As a Massachusetts gas and electricity consumer, and a resident of Dracut, MA, I am writing to
express my concern that the Energy Cost Reduction Contact proposals outlined by Kinder
Morgan and Spectra Energy may actually increase costs to Maine and Massachusetts
consumers. Can the commission model the price impact of new LNG exports that would result
from all proposed ECRC plans? This issue was not addressed in the hearing examiner’s report.

The statements filed yesterday by TGP attorney Anthony Buxton contain an unsupported
assertion that pipeline capacity in the Northeast is the sole factor in the projected increase in
winter electricity rates. In fact, the maintenance of sufficient winter reserves is of equal if not
greater importance. Disinterested observers do not come to the conclusion that gas pipelines in
Massachusetts are the sole driver of winter prices. Lack of reserves is clearly a factor in the
commodities markets as the following graph from the US EIA clearly shows (source:
http://ir.eia.gov/ngs/ngs.html, accessed on September 30):



The plan for “cost reduction” proposed by Kinder Morgan -- the construction of a $6 billion, 2.2
BCF per day pipeline from Pennsylvania to Dracut -- enables exports that may deplete seasonal
reserves that are now critical to the New England winter gas supply. The issue of the relationship
between exports and winter storage thus deserves closer examination by the PUC.


(continued)
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Here are a few facts:

● The Northeast Energy Direct plan proposes a 2.2 BCF increase, equivalent to a 56%
jump in firm pipeline capacity for the six-state region over 2015 levels of 3.9 BCF. A
combination of Spectra’s plans could yield a 50% increase from the same baseline.

● The reversal of the Maritimes Northeast (MNE) pipeline proposed in the application for
Northeast Energy Direct (FERC PF14-22, cover page 1) is cited by Canadian maritimes
LNG exporters as the source of up to 1 BCF per day of natural gas.*

● Three companies besides Canaport and Goldboro are also claiming they would be able
to export gas sourced from the MNE pipeline, if they can build export terminals.

The problem is that storage levels are already almost 500 BCF below normal levels (as of
September 19). Additional demand from an export market would worsen this problem. Maine
consumers deserve to know the effect that spring, summer and fall exports of natural gas will
have on our ability to accumulate sufficient winter reserves.

None of this gas storage is in New England, so the problem cannot be fixed with additional
pipeline capacity into New England. Plus, eastern reserves on which we now depend (both
seasonal and long terlm) will be further drained by the addition of terminals in Cove Point, MD
and Sabine Pass, TX, now approved for approximately 1 BCF per day of new LNG exports.

Rather than contribute to the approval of export pipelines that would send far more natural gas to
Canada, Brazil, or Japan than Maine consumers will ever see, the PUC might consider
intervening in the deliberations of other states to assure that lower-cost gas resources are not
squandered rapidly through exports, leading to year-round natural gas price increases and winter
supply problems far worse that what we have seen to this date.

Sincerely,

Rich Cowan
Dracut, MA

cc: Senators Warren, Markey of MA; Senators King, Collins of ME
Rep. Niki Tsongas; Attorney General Martha Coakley
Gubernatorial candidate Mike Michaud; Gubernatorial candidate Charlie Baker

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*Page 1 of the TGP pref ile cover letter f or NED highlights "the interconnection with the Joint Facilities [in Dracut], together with the
anticipated reversal of the primary f low direction of the Joint Facilities." The article "Canaport LNG a can-do Exporter,
Consultancy Says, Natural Gas Intelligence," on May 21, 2014 (see: http://goo.gl/UJnyhf ) describes how Maritimes (Joint
Facilities) reversal would supply the proposed Goldboro LNG terminal.