Listen to the real energy concerns
New England is at greater risk of higher energy costs and price volatility today than a year ago
Six public opinion polls in 2016 – one each by ABC, NBC, Suffolk University and Bloomberg and two by CBS – found that the number one concern is jobs and the economy. Among other major concerns were terrorism, health care and immigration. Only in one poll was climate change mentioned.
Few would argue that climate change concerns need to be addressed, but the most prominent concern of most Americans is still jobs and the economy. That’s no less true in New England where climate-driven policies and lack of progress on energy infrastructure development, including natural gas pipelines and electric transmission lines, drive up costs, produce uncertainty and threaten reliability of electricity during extreme weather conditions.
Listen to what business leaders have said recently:
• Sig Sauer in New Hampshire: “Electricity costs today, and concerns about future price volatility, along with the inability in this region to build new energy infrastructure … put New Hampshire at a distinct disadvantage as we look to expand.” (Union Leader, Dec. 1, 2016)
• Maine’s Bath Iron Works: “Electricity costs were one of the factors” that led to the loss to a Florida company of $10.5 billion government contract, “that could cost as many as 1,000 jobs.” (Portland Press Herald, Sept. 15. 2016)
• Gorton’s Seafood in Massachusetts: “Making electricity more affordable” is a major factor affecting “a very, very competitive business” facing worldwide competition. (Gloucester Times/Salem News, Nov. 8, 2016)
These major employers have aggressive energy-efficiency programs in place and have explored solutions to reduce industrial electricity costs that are almost double the national average. While they don’t expect New England prices to drop to the national average, they are increasingly concerned that high energy costs are becoming a drag on their business prospects.
A recent study by Daymark Energy Advisors for the New England Coalition for Affordable Energy concluded New England is at greater risk of higher energy costs and price volatility today than a year ago. The reasons are delays and cancellations of natural gas pipeline and electric transmission projects and energy policies that provide subsidies and other policy-mandated incentives for renewable energy, while discouraging natural gas expansion.
Opponents of infrastructure development argue that additional natural gas supplies and renewable energy are incompatible. It is a fallacious argument.
A Washington Post story last August based on research from the Euro-Mediterranean Center on Climate Change concluded that “renewables and fast-reacting (natural gas) technologies … should be jointly installed to meet the goals of cutting emissions and ensuring a stable supply.” It found a nearly one-to-one correlation between additional natural gas generation and growth in renewables over a 23-year period.
Recent actions by New England states are leading to subsidized long-term renewable energy contracts that seem to favor emission reductions over price and reliability considerations. To achieve some balance, policymakers and regulators should allow some mechanism to ensure adequate year-round supplies of natural gas as fuel for electric power generators.
A balanced all-resource approach, which includes expansion of natural gas pipelines and electric transmission lines, should be based on a combination of factors, such as improving reliability, lowering costs, reducing emissions and complementing and supporting growth in renewable resources.
It is time to listen to issues of concern to companies throughout New England, such as chocolate maker Lindt & Sprungli, whose vice president of operations told the NH Union Leader last month, “the company is not willing to grow any more in New Hampshire … (without) finding ways to reduce our energy costs in this state.”
It’s a story being told throughout New England, one that deserves a better ending.
Carl Gustin is a consultant to the New England Coalition for Affordable Energy.