Northeast Gas Market Capacity Release Program: Key Updates and 2024 Impact
The Northeast natural gas market faces significant challenges due to increasing capacity costs and infrastructure constraints. This article provides an overview of how these factors impact utility rates, supplier pricing, and ultimately, customer energy costs.
Authored by Dan Cwalinski | Director of Contracts and Pricing
Understanding the Northeast Capacity Release Program
Natural gas travels through pipelines from the source to your meter. In the Northeast, limited pipeline space and rising demand create market challenges, forcing utilities and suppliers to carefully manage pipeline, storage, and peaking capacity assets.
Utility companies assign customers a Total Capacity Quantity (TCQ) based on their peak-day usage needs. Suppliers are required to purchase capacity assets from utilities equal to the TCQ of their customers.
2024 Market Changes and Cost Drivers
Several major changes from 2024 are impacting natural gas costs now:
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Peaking capacity costs have increased due to agreements keeping the Everett Marine Terminal (EMT) operational after the shutdown of Mystic LNG-powered generation units.
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Algonquin Gas Pipeline rate hike approved by FERC to cover capital improvements and rising operational costs.
These changes directly raise the cost of natural gas capacity assets, leading to higher supply prices for end-users. Some suppliers are passing these increases along using cost pass-through provisions in customer agreements.
Proactive Energy Cost Management is Critical
Understanding these capacity dynamics is essential for organizations managing their natural gas procurement strategies. Active monitoring of utility and supplier updates can help mitigate risks and avoid unexpected costs.
Read the comprehensive Market Update for a deeper dive into the Northeast Gas Market Capacity Release Program.
Meet the Writer
Dan Cwalinski
Director of Contracts and Pricing
Freedom Energy Logistics
Dan Cwalinski is a seasoned energy professional with over 17 years of experience in the natural gas and electricity markets. As Freedom Energy’s Director of Contracts and Pricing, Dan leads supplier negotiations, pricing strategies, and contracting operations, helping clients navigate complex energy markets. He brings deep expertise in analyzing utility data, interpreting contracts, and advising clients on cost-effective energy solutions. Dan is a member of Freedom’s Risk Management Committee and is passionate about using data-driven strategies to support client goals in the evolving energy landscape.
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