Despite the recent rise in gasoline prices, Massachusetts households are still paying far less — about $1 less a gallon — than they did a year ago. But whatever energy savings they might have enjoyed have been at least partially offset by soaring electricity costs.
High electricity costs have long been a problem for New England businesses and households, but over the past few winters, the problem has grown more acute — so much so that New England governors met last week to discuss ways to bring prices under control. The increase in electric rates is largely the result of inadequate access to the natural gas that has become the fuel of choice for the New England region’s electricity generators.
So how did we get here? Since 2000, our reliance on natural gas has more than tripled as oil and coal-fired plants were taken off-line and only partially replaced, according to our regional grid operator, ISO New England.
In coming years, another 3,000 megawatts of New England’s oil, coal, and nuclear generating capacity will go offline, further increasing our reliance on natural gas and renewable sources. While the closing of dirty and inefficient coal plants is very good news for our air quality, the loss of the electricity they generate increases our prices and creates serious competitive disadvantages for the New England region.
In January, industrial customers in Massachusetts paid an average retail price of 13.2 cents per kilowatt-hour, according to the US Energy Department. In states we compete with, such as New York and North Carolina, industrial users paid half that price (6.1 cents and 6.3 cents, respectively).
High energy costs have very real economic consequences. Last spring, in response to a University of Massachusetts Dartmouth survey of 1,350 Massachusetts manufacturers, 78 percent identified high energy costs as a top concern. And it now appears these concerns are serious enough to motivate action.
One of the state’s leading employers, the Hopkinton data storage firm EMC Corp., recently announced that our high energy costs are the reason it is relocating a research and development facility and 500 jobs to Durham, N.C, where EMC pays just 4.5 cents per kilowatt-hour, about one-third of the average price industrial customers pay in Massachusetts.
If we are to increase the reliability and price competitiveness of our energy system, in the near term at least, the New England region needs more and better access to natural gas. As a practical matter, this means expanded natural gas pipeline capacity, more liquefied natural gas facilities, or both.
And it means seriously exploring new transmission projects to get clean hydropower from our neighbors in Canada and doubling down on state energy efficiency programs that have helped make Massachusetts the most energy-efficient state in the nation.
We also need to find a way to harvest the substantial supply of wind power available off our shores. Doing so would prevent us from relying on a single source of fuel, in this case natural gas; offer us considerable environmental benefits; and provide significant economic opportunities to regions such as Southeastern Massachusetts that are positioned to benefit from offshore wind development.
Ironically, the 18.7 cents per kilowatt hour rate that caused such concern when the state’s major utilities entered into agreements (now defunct) to buy power from Cape Wind are looking much more reasonable in light of winter increases that pushed residential rates to just under 21 cents. And that price does not reflect the full social and environmental cost of the carbon emissions and other environmental effects associated with fossil fuels, such as oil, coal, and natural gas.
Bottom line, the energy challenges we face can be met with a sustained commitment from leaders here in Massachusetts and in other New England states. Provided the state retains its commitment to increasing its renewable energy production over time, Governor Charlie Baker’s signal last week that Massachusetts will rejoin its neighbors in trying to expand the region’s pipeline and transmission systems to tap abundant supplies of natural gas and hydroelectricity is a promising development.
But it will take time to develop and implement a mutually agreeable solution, so ratepayers can expect high electricity bills until the region’s electricity generating capacity is brought up to speed. The only question now is whether we will muster the collective will to do what needs to be done, or whether we will once again kick the can down the road in the hopes that someone else will make the tough decisions for us.
Michael D. Goodman is the executive director of the Public Policy Center and an associate professor of public policy at the University of Massachusetts Dartmouth. Follow him on Twitter @Mike_Goodman.
View the original content and more from this author here : http://ift.tt/1z0QBg8
from critical infrastructure alliance http://ift.tt/1z0QAZR
via IFTTT
No comments:
Post a Comment