Just in time for the brisk fall weather, leaders on Beacon Hill expect to wrestle with the state’s high electricity costs, a debate that kicks off with a public hearing on Sept. 29. The spectacle is scheduled for the State House’s Gardner Auditorium. So you know big crowds and long speeches will be the order of the day.
When lawmakers adjourned in the summer of 2014, they left some unfinished energy business. Massachusetts repeatedly ranks highly among states when it comes to electricity costs. Prices moderated somewhat in the past year thanks, in part, to low crude oil costs, but the problem hasn’t gone away. Limited natural gas pipeline capacity makes it tough to get cheap gas from Pennsylvania on cold days when it is needed the most. This is a particular problem in New England, where natural gas is responsible for more than half of our electricity.
Meanwhile, lawmakers are racing to keep ahead of a 2008 state law that requires steep reductions in greenhouse gas emissions. They also are mindful of increasingly strict requirements on utilities to buy a certain percentage of their power from renewable sources. So they’re eager to act.
From offshore wind to hydroelectric power, it can be hard to keep straight all the alternatives. What kind of solution must lawmakers offer? None at all, if they so choose. But there’s certainly the political will to do so. Governor Charlie Baker, for example, has pledged to work with Massachusetts leaders and those in other New England states to get electricity prices under control.
The various bills, from those proposing offshore wind farms to hydroelectric dams in Canada, aren’t mutually exclusive. But legislators face a crucial balancing act: how to help subsidize new sources of energy while ensuring that any extra costs on ratepayers for this infrastructure are offset by a drop in prices caused by the influx of new fuel sources. Here’s a look at the options.
Massachusetts ranks among the top states for its solar panel growth thanks to its generous ratepayer-funded subsidy programs, with nearly 900 megawatts of capacity in place today, spread among big solar fields and smaller rooftop panels. That’s enough electricity to power at least 140,000 homes. So what’s the problem? Two words: net metering. This is the way solar panel owners can get reimbursed for selling electricity they don't use. The Legislature imposes limits on how many solar panels can benefit from net metering’s generous payment system and has previously raised caps.
We’re up against these caps again, particularly in National Grid’s territory, and it’s shaping up to be a big fight. Environmentalists and solar companies argue that lifting the caps is crucial to ensuring the solar machine continues to hum along. The utilities, though, say this is unfair to other customers: They see solar-panel users as essentially freeloaders, not paying their share for their use of the grid.
The Senate endorses a bill that would lift the caps until the 1,600 megawatt goal is reached, while the Baker administration favors a bill to raise limits modestly for now, then cut back on reimbursements after we hit the 1,600 mark. House leaders prefer the issue to be settled as part of a broader energy bill.
Tapping into some of Canada’s giant hydroelectric dams seems like it should be a no-brainer: After all, hydroelectric dams don’t emit greenhouse gases or other pollutants, right? But there’s the not-so-small quandary of getting that power here. The few transmission lines we have into Canada are essentially maxed out.
Governor Charlie Baker and Senator Ben Downing, the energy committee’s co-chairman, have filed bills that would bring more power in from Canada by prompting utilities Eversource Energy and National Grid to enter into long-term contracts with Canadian power players such as Hydro-Quebec or Nalcor.
Those companies could use the contracts to help finance a power line or two. (Eversource and National Grid are investors in two of the proposed power lines). Wind turbines in remote areas of Maine or northern New York might be able to send their electricity along at least a few of these lines, which could bring even more energy to Massachusetts.
But these power lines face varying amounts of resistance in northern New England. Eversource agreed to bury part of its Northern Pass line through New Hampshire, but that still hasn’t mollified some of its local critics. And the owners of existing generators are fighting back: They say these contracts would give Canadian hydro an unfair advantage. The biggest political sticking point here, however, could be the potential for extra costs that could be imposed on ratepayers as part of these long-term contracts.
Cape Wind’s recent demise represented a big setback for those who saw Massachusetts as an offshore wind leader. But three other developers have signed federal leases for bigger projects in deeper waters off New England’s southern coast. They just need a guaranteed revenue stream to line up the financing to build them. In other words, they need customers.
That’s where the Legislature could step in. Representative Patricia Haddad, a top lieutenant of House Speaker Robert DeLeo’s,has been pushing a wide-ranging energy bill that includes language for the big electric utilities to enter into long-term contracts for offshore wind farms.
Haddad sees offshore wind as an economic boost to the South Coast, where she lives, as the region braces for the loss of the giant Brayton Point coal plant in 2017. DeLeo hasn’t signaled yet what kind of energy bill he wants to see, other than to say that it should address several sources. Haddad’s leadership position indicates offshore wind will probably be among them.
Associated Industries of Massachusetts vigorously fought Cape Wind, saying ratepayers would be overcharged as part of the financing agreements to get the project built. With three developers in the hunt, the bidding for these contracts could be more competitive this time around. But the projects, given their size, could end up costing more than Cape Wind in the end.
Because natural gas is the dominant source of fuel used by New England’s power plants, providing more pipeline capacity to reach the underground reservoirs of gas in Pennsylvania is an important goal for many political leaders. It’s controversial, though: Many environmentalists would rather see New England wean itself off of natural gas, and the organization that runs the region’s grid is worried that we are becoming too dependent on one fuel source. On frigid days, the cheap gas is usually gobbled up by heating customers before the power plant operators can get it.
The hearing next week isn’t expected to focus on natural gas. But the specter of a new pipeline from either Kinder Morgan or Spectra Energy, two energy companies vying to build major gas transmission lines into the region, looms large over the legislative debate.
The real action on this front is over at the state Department of Public Utilities. The agency is already moving ahead with an unprecedented electric tariff to raise money for more natural gas, with a decision expected in the coming weeks. Yes, electricity customers would need to pay a little extra to help subsidize a pipeline. But the goal would be to reduce electricity costs by curbing the supply shortages that plague the region’s power plants on the coldest winter days.
The clean energy advocates that will fight the pipelines have allies in the communities where they would be built, determined to stop digging in their towns. And Attorney General Maura Healey has sounded a cautious note, in part by commissioning a study to evaluate the region’s natural gas needs.
But the pipeline critics are up against the industrial users who view more natural gas as the simplest approach to getting Massachusetts’ sky-high electricity costs under control.