The region needs more energy infrastructure

To reduce costs and ensure a bright future, we need solutions that work for New Hampshire


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Yogi Berra once said, “When you come to a fork in the road, take it.”

When it comes to energy policy, New Hampshire stands at the proverbial fork. What route will we take?

At the heart of this issue is the fact that New England has an energy capacity deficit. Natural gas fuels most of our region’s power plants. In the winter months, when natural gas is diverted to heat homes and businesses, the pipelines feeding the region lack the capacity to carry sufficient natural gas to also fuel electricity producing power plants. In turn, those plants must turn to other, more expensive sources of fuel, which for the past several winters that has caused prices to spike. This financial blow hits individuals, families and businesses alike.

That financial cost is not small. New Hampshire businesses and consumers pay a multimillion-dollar premium for electrical energy due to supply constraints. The high cost of electricity makes businesses here less competitive and drives up overhead, which in turn jeopardizes current and future jobs, and threatens our state’s economy.

The high cost of electricity is not just a New Hampshire challenge, it’s a regional challenge. New Hampshire is part of New England’s energy grid, which supplies electricity to the entire region. The high price New Englanders pay for electricity is a matter of supply and demand on a regional scale. Energy costs are driven higher by constrained supply into the grid.

Right now, New Hampshire’s electrical energy prices are nearly 55 percent higher than the national average, according to the U.S. Energy Information Administration. New Hampshire’s Public Utilities Commission recently reported that that the region paid $2 billion more for electricity last winter (2014-15) and $5.4 billion more the winter before (2013-14), than the benchmark winter of 2011-12, when supply and demand were roughly in balance.

Even with news that this winter’s rate spike may not be record-setting, the increases are significant and the regional electric rate disparity remains a long-term, persistent, year-round challenge.

If you think the consequences of high electrical energy prices are overstated, think again. Many New Hampshire employers are reviewing their current operations to determine where the most economical U.S. location is. Up to now, our respective chambers of commerce worried about stagnant job growth and declining economic vigor as companies expanded operations elsewhere.

As we look forward, our electrical energy crisis presents a bleaker scenario, with the very real prospect of businesses moving existing operations and jobs from New Hampshire to lower cost states and countries.

As Val Zanchuk, president of Graphicast (a small manufacturing business in Jaffrey) recently said, “Businesses may well be forced to move facilities to another region with lower electricity prices, taking jobs and income away from New Hampshire.”

We need balanced energy solutions, including energy conservation and renewables, but we can’t ignore the urgent need for additional electric transmission and gas pipeline infrastructure to increase the supply of energy into our region.

As a state, we need to move beyond divisiveness and finger-pointing and come together around infrastructure solutions that work for New Hampshire.

The choices are stark, with real consequences for our future. It’s a choice between action and inaction; between higher and lower energy costs; between economic stagnation or economic competitiveness.  As we look out at the road ahead, the route forward is clear: New Hampshire needs more energy infrastructure to reduce costs and help secure a bright economic future.

Tracy Hatch is president and CEO of the Greater Nashua Chamber of Commerce and Jim Roche is president of the  Business and Industry Association of NH.

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