Boston, February 1, 2022 – The New Jersey Board of Public Utilities engaged London Economics International LLC (“LEI”) to evaluate natural gas transmission capacity and its adequacy to meet current and future gas demand for New Jersey firm customers (BPU Docket No. GO19070846).

LEI assessed the risk of a capacity shortfall under five different demand conditions to 2030. Under three of the five conditions, including a design day winter, LEI projected that NJ gas distribution companies would have enough capacity to meet firm demand even if no building electrification occurred and firm gas demand grew at about 0.8% per year.

Under two scenarios—one with extreme winter weather (with a probability of once in 90 years) and the other positing a large disruption to the gas transmission system during a design-day winter, the system would fall short. For these low-probability but high-impact conditions, LEI’s report included a playbook for tackling such emergencies.

In a separate analysis based on long-term scenarios describing the impact of New Jersey’s building electrification goals (based on New Jersey’s Energy Master Plan, Integrated Energy Plan (“IEP”)), LEI found that only in scenarios which posited building electrification of at least about ½ of the IEP’s Least-Cost Gas Consumption scenario would firm gas demand flatten to 2030. For firm gas demand to decline over time would require a higher level of building electrification. “The key insight derived from using demand scenarios to 2030 is that design day demand will decline only if building electrification gets under way,” Marie Fagan, Chief Economist at LEI, noted.

LEI’s findings are summarized in a report accessible at https://publicaccess.bpu.state.nj.us/CaseSummary.aspx?case_id=2108126