A study procured by the INGAA Foundation (Interstate Natural Gas Association of America) finds a resurgence in use of liquefied natural gas (LNG) as a peak-shaving alternative for local distribution companies (LDCs).
The study, "The Use of Liquefied Natural Gas For Peaking Service," conducted by Stone & Webster Management Consultants, Inc., attributed a rise in the use of LNG plants for peak shaving to a deregulated environment (FERC Order 636, plus use of the "straight fixed-variable" rate design for gas pipeline capacity), which forces LDCs to assess their true capacity needs. It also observed that LNG facilities are not faced with the same geological restrictions as underground storage. (Storage withdrawal for peak shaving may carry other problems, too, such as physical effects that come from injecting propane-air mixtures.) Also, the advent of retail unbundling and expected lower electric prices force LDCs to make peaking capabilities as efficient as possible.
The survey identified 85 LNG plants, located in 24 states and two Canadian provinces, owned by 47 companies. The capacity of the LNG plants was said to equal 9.2 billion cubic feet per day.
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