The outrageously high cost of energy in Massachusetts is reaching a tipping point for many businesses and residents.
Contrary to arguments put forward by advocates with an unmistakable agenda these legitimate concerns have little to do with mid-winter price spikes. The simple fact is that cheap electricity is available throughout much of the United States, but it has not been the case in Massachusetts.
Massachusetts has the distinction of historically having the highest costs for energy in the continental United States.
It is one of the factors identified by “Forbes Magazine” that distinguishes Massachusetts as the most expensive state in the United States to conduct business.
In 2014, the cost of electricity in Massachusetts spiked to more than double the cost during the past decade. In 2016 the Energy Information Administration reported that electricity costs in Massachusetts were 63% higher than the national average for residents, 58% higher for commercial users, and 108% higher for industry.
In late December, 2017, “Bloomberg News” announced that the “spot-market price for natural gas hit $35.35 in New England.” The cost is now 13 times more expensive than at the central US price-setting location. To white wash these cost inequalities is insulting to the people paying their utility bills.
Why are costs for energy so high in Massachusetts? The straight forward answer is that Massachusetts does not have sufficient infrastructure to meet increasing consumer demand. Massachusetts electricity usage comprises more than 46 percent of New England’s overall demand. The problem became acute due to the decommissioning with no immediate replacement of approximately 10,000 megawatts of energy production.
The shift away from coal, oil and nuclear energy production during the past decade has been significant. Electricity produced from oil has dropped from 22 percent of the total generation ten years ago to a less than 1 percent level today. Coal production of electricity was formally at 18 percent and is now below 5 percent. Meanwhile, the percentage of power produced by natural gas has nearly tripled.
Brayton Point Station, a now closed coal fired power plant in Somerset, Massachusetts, is a good illustration of policy without concern for the immediate consequences. While the cessation of Brayton Point has been heralded as a great victory for environmentalists, the 1,530-megawatt power plant was the primary producer of electricity in southeastern Massachusetts.
There is no replacement for the energy production gap created by loss of Brayton Point station, or the previously closed Montaup power plant in Somerset.
These two power plants equated to a 2000 megawatts net loss of electricity production in southeastern Massachusetts. The policy advocates have moved on to other priorities, but residents and businesses in southeastern Massachusetts must now import their electricity from somewhere else at a far higher cost.
The people of Somerset must also reconcile two empty power plants that no longer generate tax dollars. The situation in Somerset is a mess.
After years of advocacy from chambers and business associations, lawmakers in 2015 approved legislation to build new infrastructure. Business groups and many ratepayers had hoped for a pragmatic solution that reduced or stabilized costs, while also looking ahead to sustainability. Sustainability ended up superseding cost concerns as the new law required utilities to contract for both hydroelectricity and offshore wind. Meanwhile, a sensible effort to simultaneously expand natural gas pipeline infrastructure was thwarted.
Trending away from “dirty” fossil fuels is essential, but the cost of conversion to alternative options must be a factor.
Keep in mind that the introduction of alternative power generation as a primary source of energy production in Massachusetts is still many years away. Importation of hydroelectricity from Canada and power from off-shore windfarms will require the securing of significant tracts of land and water, must overcome permitting obstacles and have upfront infrastructure investment costs to be paid by consumers.
This is why natural gas, as a gap bridging cost stabilizer should no longer be put aside for political convenience. Leveraging gas in combination with the expansion of green alternatives is a reasonable strategy that can help contain the high cost of energy while also meeting environmental aspirations. There is no reason why Massachusetts cannot be practical and forward thinking simultaneously. Not addressing the cost of energy is already impacting the Massachusetts economy. Now is the time for action.
Robert A. Mellion, Esq.
President & CEO
Bristol County Chamber of Commerce