Lakes Region asks for pipeline expansion

The land abutting the former Laconia State School and surrounding buildings is slated to be redeveloped in a project called “Laconia Village,” featuring about 2,000 housing units. City Planning Director Rob Mora said he is worried the units will become excessively expensive if the development cannot use natural gas as heat, but a pause on new gas connections in the Lakes Region could prevent those units from accessing the network. (Photo by Molly Rains/New Hampshire Bulletin)

When New Hampshire called for more housing, the Lakes Region answered, and development in several central cities and towns took off fast. Then, the gas ran out.

New natural gas connections in several municipalities throughout the region are paused, according to officials and developers. Liberty Utilities, the regulated company that serves as the region’s gas supplier, says it lacks the capacity to add more customers without upgrades that could take years, and millions of dollars, to realize.

Local officials said the situation was an unexpected roadblock that threatened development they had worked hard to court under the assumption that gas service would be available to new homes and businesses.

Municipalities in the Lakes Region including Franklin, Gilford, Laconia, Northfield and Tilton are facing a pause on new connections, according to David Chunn, planning and zoning director for the city of Franklin. A spokesperson for Liberty declined to clarify which municipalities were affected when asked via email Jan. 6. However, at a meeting of the Tilton Select Board on Dec. 4, Liberty engineer Ian Crabtree said demand in the area was at the upper limit of what the company could supply with existing infrastructure.

The line that supplies the Lakes Region was originally constructed in the 1960s. Shortly after, the area’s population grew rapidly throughout the 1970s and ‘80s, Crabtree said. In the early 2000s, anticipating a capacity shortfall, the company began widening the line, but the project was never completed. Today, a stretch of about 10 miles of the original six-inch line remains.

Liberty’s preferred next step would be widening that stretch to a modern 12-inch line, Crabtree said, but that would be a “huge undertaking.” Representatives at the meeting estimated it could take upwards of five to seven years to complete the work.

Gas network access is not guaranteed

Natural gas service is somewhat uncommon in New Hampshire. About 1 in 5 households uses the fuel for home heating, according to the U.S. Census Bureau’s 2023 American Community Survey.

That’s because most of the state lacks natural gas infrastructure, said Don Kreis, New Hampshire’s consumer advocate. But the municipalities saying they’ve been hit with a moratorium do have access, falling within Liberty’s “franchise area,” or the region in which the utility can operate. The capacity shortfall, then, means the utility has “customers it can’t serve,” Kreis said.

It wasn’t the lack of gas that was the biggest problem in Franklin, Chunn said, but rather the lack of warning.

“The lack of capacity is a bummer, understandably,” he said. “My irritation is that it was allowed to get to this point, and it was known about many, many years in advance, and no notice was shared with anyone, as far as municipalities. … Many of us only learned about this through people coming to tell us about it, homeowners and property developers, as they encountered the issue. It would have been nice to know about this in advance, from the state regulators.”

Kreis said planning to ensure a utility can meet customer demand was the responsibility of the utility, not the state. And planning and executing a project as extensive as a pipeline expansion to the Lakes Region, he added, would be a significant investment.

Another “limiting factor,” Liberty lawyer Mike Sheehan said, would be whether such growth would be considered justified.

The cost of projects undertaken by utilities is distributed across all ratepayers in a system. In deciding whether to incur the cost of this project — which would affect rates for customers across the state, not just in the Lakes Region — the Public Utilities Commission and Liberty would have to consider whether such an investment is justified, Sheehan said.

“That’s always the push-pull we have,” he said.

Assessing options

Though the project would take years, local officials said they still believed it was important. Rob Mora, planning director for the City of Laconia, said that without more gas, the Lakes Region lacked the infrastructure to support the state’s goal of boosting the housing supply.

Mora said he worried higher costs of alternative fuels would raise local development out of the reach of those who need it most.

“Especially if you’re trying to build larger-scale residential developments — for that ‘missing middle’ income bracket or workforce development — those are going to be the people that are affected most by this, and developments that are supporting those people,” he said.

But as fully electrified development becomes more common, disregarding alternatives to gas heating might be a missed opportunity, said Sam Evans-Brown, executive director of Clean Energy New Hampshire.

Given the longtime frame for gas expansion, adapting both residential and industrial development plans to electricity instead of gas could be both faster and cost effective if done right, he said.

Electricity is expensive in New Hampshire, Evans-Brown said. But investing in a more efficient building envelope and heat pumps can bring down the cost, making an electrified building more feasible.

“I disagree with the assessment that gas is the only way,” Evans-Brown said.

This story was originally produced by the New Hampshire Bulletin, an independent local newsroom that allows NH Business Review and other outlets to republish its reporting.