Sprague Energy's Regulatory Matters for the third quarter of 2026, published October 19, 2026, summarizes recent developments in natural gas production, LNG trade, electric default service, retail choice, and transmission. The newsletter draws on third-party sources, including the U.S. Energy Information Administration (EIA), the Northeast Gas Association (NGA), WBUR News, and the New York Independent System Operator (NYISO).
The EIA reports that the United States is on track for record natural gas production. It forecasts that marketed natural gas production will average 122.5 billion cubic feet per day (Bcf/d) in 2026, surpassing the previous record of 118.5 Bcf/d set in 2025. Most of the expansion is concentrated in the Permian region in Texas and New Mexico and the Haynesville region in Louisiana and Texas.
The United States was the world's largest natural gas producer from 2009 through 2024, the most recent year for which global production data is available. According to the EIA, global liquefied natural gas (LNG) trade volumes rose 5.4 percent to a record 56.3 Bcf/d, driven largely by the expansion of U.S. LNG export capacity.
U.S. LNG exports increased 26 percent to 15.1 Bcf/d in 2025, a larger increase than any other country, and the EIA forecasts exports will reach 17.4 Bcf/d in 2026 and 18.6 Bcf/d in 2027. The United States accounted for 26 percent of global LNG exports in 2025, up from 21 percent in 2024.
The United States, Qatar, and Australia, the three largest LNG exporters, together made up 63 percent of global exports, compared with 60 percent in 2024. In New England, the NGA sent a letter dated August 25, 2026, to the Massachusetts Legislature as lawmakers evaluate proposed changes to the competitive energy space in the Commonwealth. The association argues that natural gas infrastructure investments are essential to maintaining a safe system, supporting energy reliability, and keeping energy affordable.
It notes that natural gas powers as much as 60 percent of the region's electricity generation and serves as the primary heating fuel for half of Massachusetts homes. The NGA also points to the House's earlier passage of H.5175, its energy affordability package, which it describes as offering a more balanced approach. The association urges lawmakers to avoid measures that would prematurely phase out essential gas infrastructure investments.
Several state jurisdictions are reviewing how electric utilities procure and provide default service supply to customers who do not choose an electric supplier. In Connecticut, the Public Utilities Regulatory Authority issued a draft order that, if ultimately approved, would make major changes to the state's procurement plan for standard offer and default service for customers at or under 500 kilowatts of demand. The proposed changes are designed to lower risk premiums in default service rates.
The framework provides for dynamic market purchases by the electric distribution companies, rather than full-requirements contracts for 100 percent of the default service load with a third-party wholesale supplier. In Maine, the Public Utilities Commission, while investigating time-of-use (TOU) rates for default and delivery service, recognized that such rates may require upgrades to utility metering, billing, customer care, and settlement systems. The commission intends to open a new proceeding to evaluate what changes may be needed before any potential implementation.
In Massachusetts, the Department of Public Utilities is developing a straw proposal for time-varying rates (TVR) for electric default service, or basic service. The inquiry responds to a petition from the Massachusetts Department of Energy Resources, which proposes a default, opt-out TOU rate for default service customers. In Texas, Governor Greg Abbott announced a plan to break up what he calls "city monopolies," such as those held by CPS Energy, Austin Energy, and other municipal utilities, in order to deliver lower electric bills.
The governor claims the plan would reduce San Antonio bills by 13 percent. He noted that more than 5 million Texans live in areas served by a single municipal power provider, with 60 percent of those customers located in San Antonio and Austin. Although the proposal is largely aimed at those two cities, the governor said he will ask the Legislature to approve a plan that could have wide-ranging implications for more than 70 city-owned utilities across the state.
Hydro-Québec and three Massachusetts electric utilities are involved in a legal dispute over Hydro-Québec's temporary halt of power exports over the 1,200-megawatt New England Clean Energy Connect (NECEC) transmission line during the January 2026 cold snap, as reported by WBUR News. In a lawsuit filed in the U.S. District Court for Massachusetts, subsidiaries of National Grid USA, Unitil Corp., and Eversource Energy allege that H.Q.
Energy Services (U.S.) Inc. (HQUS) violated its power purchase agreement when it stopped sending power shortly after the project became operational. The suit states that HQUS cut off deliveries over all or parts of 12 days, from January 24 through 31 and February 6 through 9, 2026, after just eight days of operation. Hydro-Québec said the export halt was necessary to meet spiking power demand in Quebec caused by extreme cold.
In its own lawsuit against the utilities, Hydro-Québec argues that the cold weather constituted a force majeure event that suspended its obligations to send power over the line. The NYISO issued its annual Power Trends 2026 report, which assesses the forces shaping the New York state electric grid over the next 20 years. The report finds that New York's electricity demand is expected to grow, driven by electrification and emerging large loads.
It concludes that all study scenarios require significant new generation, and that policy-driven scenarios require far more installed generation capacity than exists today. Transmission capability is described as increasingly central to system performance, public policy achievement, congestion reduction, and the ability of new resources to serve consumers. According to the NYISO, moving from 95 percent to 100 percent emissions-free electricity requires substantially more investment in replacement resources and relies on technologies not yet available at commercial scale.
Sources: Sprague Energy, Regulatory Matters, Third Quarter 2026 (spragueenergy.com); U.S. Energy Information Administration; Northeast Gas Association; Massachusetts Legislature correspondence; WBUR News; Governor Greg Abbott's office; New York Independent System Operator. Sprague notes that the information in its publication is obtained from sources believed to be reliable, but its accuracy is not guaranteed.
Source: spragueenergy.com