Costs to ratepayers pile up, but who’s listening?

It is encouraging to read that PSNH CEO William Quinlan believes the cost of burying the Northern Pass Project may be on the low end of estimates. However, ratepayers need to be mindful of two important points:

1. Underground transmission line projects with the capacity and voltage of Northern Pass have never been done before anywhere in the world, making estimates open to doubt (and when has any project come in under its estimates?).

2. Regardless of the accuracy of the estimates, burying transmission lines still represents billions of dollars in additional costs to be borne by ratepayers. We will all pay more to cover the additional billions in burial costs, whether through higher-priced power purchase agreements or day-ahead market rates. The net result is that ratepayers will pay for all this political pandering.

Elected officials who have repeated the “bury the lines” mantra need to answer as to why they are so willing to let ratepayers pick up the tab for billions in additional costs for burying Northern Pass through higher electricity rates.

Yet many of these same politicians have condemned the $200 million in additional costs for the scrubber at Merrimack Station. Right now, that $200 million is looking like a bargain for PSNH’s ratepayers, as PSNH has some of the lowest rates of any utility in New England and is lower than nearly all competitive suppliers as well.

Yet while complaints persist about the scrubber cost overruns, another $3 billion (or more) in transmission line costs is demanded for Northern Pass approval.

How can government officials who claim to be looking out for ratepayers’ best interests when it comes to the “prudency” of scrubber costs simultaneously call for burying transmission lines that will raise electricity rates? Protecting ratepayers shouldn’t be subject to the whims of elected officials. It should be a policy priority.

Unfortunately, hypocrisy isn’t limited to scrubbers or transmission projects.

Renewable portfolio standards cost ratepayers billions of dollars throughout New England, and politicians know it, but they remain intent on protecting special interests (and donors) at the expense of ratepayers. The same is true for the Regional Greenhouse Gas Initiative, a policy whose allowance “proceeds” approach $2 billion, paid through higher rates, of course.

Other policies, like net metering and energy efficiency, result in shifting costs from one set of ratepayers to another (yes, you are paying for your neighbors’ solar panels) and our elected officials have little care about the impacts.

A colleague has accurately stated that these policies are passed with the uninformed consent of ratepayers because most ratepayers don’t know that they are paying for them.

To their credit, there are legislators throughout New England who have expressed real concerns that businesses will follow Verso Paper Mill in Bucksport, Maine, in closing the doors and sending 500 workers to the unemployment line. They are worried that large manufacturers will move or expand to states like the Carolinas (i.e. Sturm, Ruger & Co.), where industrial rates are nearly half that of those in New England. The important question is “What will they do about it?”

A quarter of New England’s electricity capacity (8,000 megawatts) has retired or is facing retirement, and our grid will be reeling from electricity shortfalls.

Elected officials’ prescriptions have included energy efficiency, demand response and other “behind-the-meter” energy sources. These solutions can’t come close to filling an 8,000 MW hole, and those prescriptions have delivered results like the recent rate hikes by electricity suppliers.

Our elected officials need to clear the path for new energy projects that could relieve New England ratepayers from needlessly sending billions of dollars out of our economy every year, and let these projects move forward as inexpensively as possible.

Otherwise, some New Hampshire politicians may get their way. Northern Pass will be buried, Hydro-Quebec will get an ample return on its investment, PSNH will get its lease payments and ratepayers will unnecessarily pay billions of dollars once again.

Marc Brown is executive director of the New England Ratepayers Association.

Categories: Opinion