No reason to buy Canadian hydro, power plants say
Governor Charlie Baker’s plan to make Massachusetts utilities buy hydroelectricity from Canada would raise prices and wreak havoc on the region’s power markets, the New England Power Generators Association has charged.
The group paid for Sue Tierney, a former Massaschusetts secretary of environmental affairs, to study Baker’s proposal to meet emissions targets by having National Grid and Eversource Energy buy low-cost electricity from Canadian dams and other sources. Tierney said Baker’s proposal was “too risky” and would increase costs.
In Vermont, Tierney wrote, Hydro Quebec signed a 26-year contract in 2011 to sell power at a price that is now about the market price for electricity in New England. The need to build transmission lines and the likelihood that Canadian power companies would charge the market rate for electricity -- despite the cheap cost of generating hydropower -- would add about $777 million in extra annual costs for Massachusetts residents, Tierney said.
“It’s just inconceivable to me that there could be cheap power from Canada, delivered into New England, without that being higher than what electricity prices are today,” Tierney said in an interview. “It’s unlikely to be a good deal for Massachusetts consumers in the long run, with that amount of surplus power.”
Tierney’s report also tried to downplay one of Baker’s main motivations for drawing in electricity from Canada: meeting aggressive greenhouse-gas reductions established in state law. She said the power plant sector is already on target to meet its goal of a nearly 8 percent reduction in greenhouse-gas emissions from 1990s levels by the year 2020. (The state goal is a 25 percent decline by 2020, but the power plant sector is expected to account for one-fourth of that drop.)
To be sure, the power generators’ group has a financial interest in keeping hydropower generators out of the New England market. They have invested billions in their plants, and advocates for hydropower say imports could bring down the market price for electricity and hurt those companies’ bottom line. But the power plant owners have said changing the market rules to sign hydroelectricity contracts would send an unsettling signal to domestic electricity companies, discouraging future investment.
Baker’s administration isn’t backing down. Katie Gronendyke, a Baker energy and environment spokeswoman, said the administration’s hydro push would be “cost-effective for ratepayers and environmentally conscious.”
“The administration has prioritized reducing and stabilizing the rising cost of energy for consumers and remains committed to pursuing innovative opportunities to ensure a diversified energy portfolio, including both solar and hydropower,” she said in a statement.