As we watch chronic inaction in our nation’s capital on seemingly every issue, we in Massachusetts are fortunate to have leadership that recognizes both the need for and the economic benefits of developing a strong, comprehensive energy policy that expands the use of clean energy and energy efficiency in the state, and assures that new forms of renewable energy are cost-competitive with traditional fuel sources.
The Massachusetts House and Senate, supported by the governor, have each passed significant energy bills, and now a conference committee of six legislators must negotiate a compromise by the end of July.
These bills present an important opportunity to save significant money for Massachusetts consumers and businesses; expand our clean energy economy; and reduce our dependence on fossil fuels that harm the environment.
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How will the proposed legislation save money? The two bills would both allow long-term contracting — for up to 20 years — for renewable energy customers. In other words, a utility would sign a 20-year, competitively-bid contract to buy the energy from a renewable energy project at a pre-determined rate. This allows utilities to take advantage of historically low energy prices that are in place now and lock in low rates with renewable energy projects for the long-term, helping to de-link electricity costs from the fluctuating world market prices of fossil fuels.
Long-term contracts also reduce the cost of borrowing money to build new wind installations and other clean-energy projects. Those savings are then passed back to the consumer. With the provisions as drafted in each version of the bill, Massachusetts consumers could save over $1 billion over the next 20 years.
The argument that “we can’t afford to move to renewable energy in this economy” simply doesn’t fly anymore. Now is actually a great time to be going long on renewable energy; the cost of wind energy in particular has dropped dramatically in recent years as newer wind turbines can generate significantly more energy than earlier generation turbines.
This legislation is also good for jobs. More renewable energy projects in Massachusetts and New England means more people hired to work in development, financing, and construction of these projects. And that economic development creates a ripple effect across the economy.
As Governor Patrick has noted, with no oil, coal or natural gas of our own, we are at the end of the pipeline and therefore at the whims of a global energy market. The vast majority of our energy dollars leave the Commonwealth to pay for fossil fuels that are imported from out of state. This legislation will encourage clean energy development in Massachusetts and New England and our energy dollars can stay closer to home.
In addition to benefitting our pocketbooks, more clean wind power is undeniably good for the environment. Renewable energy sources like wind and solar displace fossil fuel-burning plants which emit pollutants that can cause climate change. Growth of clean energy sources like wind in New England along with greater investments in energy efficiency will help to reduce carbon emissions, which in turn helps slow climate change and protect our environment. The proposed energy bills help create more clean energy momentum, while generating cost savings at the same time.
Massachusetts citizens are justifiably proud of our national reputation for being a clean energy leader. Thanks to the ambitious goals of programs set out in the Green Communities Act of 2008, we are number one in energy efficiency this year, ahead of California for the first time ever, and we are a national leader in renewable energy investment.
We look forward to seeing the conference committee bring the energy bill to passage so that we can all benefit from lower electricity costs, a stronger economy, and a cleaner environment.