Pilgrim shifts Beacon Hill energy debate

Focus moves from policy to politics

THE LOOMING SHUTDOWN of Pilgrim Nuclear Power Station in Plymouth is quickly transforming the debate about energy on Beacon Hill, moving it out of the policy-wonk arena and into the political realm.

The most obvious evidence of that shift came on Wednesday when the Environmental League of Massachusetts announced it was forming a super PAC and would try to rid the Legislature of a dozen lawmakers who fail to take sufficiently pro-environmental stands during the upcoming energy debate. The group said its first order of business is to help Democratic Rep. Michael Brady defeat Republic Rep. Geoffrey Diehl in a contest for a vacant state Senate seat in Brockton.

“I think the environmental community has been tiptoeing around the edges of decision-making, so muscle is what we intend to build,” said George Bachrach, the president of the league and the new PAC.

The tone at the State House is also changing. The Pilgrim nuclear power plant generates 680 megawatts of baseload clean energy that will be very difficult to replace. After months of backroom talks and proposals, the Pilgrim announcement has added an urgency to the discussion and propelled the key players into deal-making mode.

Pilgrim Nuclear Power Station in Plymouth, scheduled to close by June 2019.

Pilgrim Nuclear Power Station in Plymouth, scheduled to close by June 2019.

Gov. Charlie Baker’s energy mantra is that he wants to meet the state’s carbon emission targets but in a cost-effective way. Matthew Beaton, the governor’s secretary of energy and environmental affairs, said in a brief interview at the State House on Wednesday that the administration’s position hasn’t changed, but he indicated there would be plenty of room to negotiate. “We’ve got to play some politics,” he said.

The four big energy variables on the table are natural gas pipeline infrastructure, Canadian hydropower, solar, and offshore wind. Beaton said everything but the gas pipeline infrastructure requires legislative action. Let’s look at each variable individually.

Natural gas – The Baker administration is proposing that electricity ratepayers be assessed for new natural gas pipeline capacity that would bring cheap Pennsylvania gas to the region on a year-round basis. Beaton said he expects the new gas supplies to actually reduce the price of electricity. The administration seems determined to push ahead with its pipeline plans despite opposition from communities that would play host to the pipelines and from environmentalists who feel that the region is already too dependent on gas for power generation. A key marker on this issue could be a study commissioned by Attorney General Maura Healey on whether new pipeline infrastructure is needed. The study is due out later this month.

Canadian hydropower – North-of-the-border power is the administration’s answer to the closing of Pilgrim. Beaton said Canadian hydro would be cost-effective, clean, and reliable. “Hydro is the best resource to help us meet all three of those targets,” he said. Bachrach said his environmental group would favor two transmission lines from Canada delivering hydroelectricity, but he said he would like the lines to carry a 70-30 mix of hydro and wind power, which could help foster an onshore wind industry in the region. Entergy Corp., the owner of Pilgrim, said on Tuesday that the Canadian hydropower would be imported at “above-market prices.” Beaton said the company’s word choice was unfortunate, but noted that all contract prices would be subject to regulatory review.

Solar – The sides are pretty far apart on solar. The Baker administration says it wants solar power to continue to grow, but with reduced incentives. The solar industry and environmental groups want to maintain the status quo. Bachrach didn’t pull any punches in discussing the administration’s proposal for a sharp reduction in one solar incentive. “That will drive the solar industry out of the state,” he said.

Offshore wind – Beaton and Baker didn’t even mention offshore wind at a recent energy hearing, but it’s clearly on Beaton’s mind now. House and Senate leaders are supportive of offshore wind, largely because of the prospect for developing a new, local energy industry in the southeastern corner of the state. Offshore wind developers have formed a trade association led by Matthew Morrissey and they make a very convincing case for the industry’s potential. House lawmakers favor a carveout for offshore wind, which would require state utilities to seek competitive bids for a set amount of offshore wind power over the course of several years.

Beaton is wary of a carveout because it limits the state’s ability to back out if prices come in too high.  The secretary said offshore wind is not a top priority in the governor’s energy policy right now, in part because of cost concerns.  “We’re getting promises of 10-cent offshore wind,” he said. “Do you honestly think they can produce 10-cent offshore wind today? That’s what we’re being told. I want to see the numbers.”

Bachrach seems weary of Baker’s preoccupation with price. “The governor uses a phrase that is difficult to understand in terms of energy policy,” he said. “The phrase is: I support renewable energy provided it is price competitive. I don’t understand what that phrase means, honestly.  Renewable energy, like most startup industries, is always going to cost somewhat more. But there’s been ongoing confusion in this state between cost and price. Cost of production delivered to utilities might be somewhat higher, but the price charged to the consumer, after that small amount of renewable energy is mixed in with the larger portfolio, is negligible.”

Bachrach said cost should always be a factor in decision-making. “But cost is not the deciding factor as to why companies locate here or expand here,” he said. “This is a high-cost state. If you want low costs, you can go to Alabama or Oklahoma.”

Lawmakers went on a fact-finding trip to Denmark this summer to learn about offshore wind and came back convinced it could work here. Beaton is skeptical, primarily because of pricing concerns.

“It makes a lot of sense to do this in Denmark. Want to know why it makes sense to do it in Denmark, more sense than it does here?” he asked. “Because the average price of a kilowatt hour is 35 cents there. It’s 13.5 cents a kilowatt here and we’re fifth-highest in the nation.”

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

 

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  • NortheasternEE

    Electric rates are rising as a result of unintended consequences from state and regional goals to transition to a fossil-fuel-free, clean energy economy. Plans, policies, and regulations put forth by the EOEEA promise the transition to be cost effective, to increase fuel diversity, and to reduce GHG emissions.

    Skyrocketing rates are not cost effective. The recent winter 37% rate increase is just the beginning. Policies and regulations are impacting the electricity wholesale markets, administered by ISO-NE, forcing the early, and premature retirement of coal power plants, as intended. Unintended, is the premature closure of clean energy nuclear power plants Pilgrim is just the latest.

    Instead of replacing fossil fuel with wind and solar, regulations are forcing the replacement of clean nuclear power, along with the coal, by natural gas. Overdependence on natural gas is just the opposite of the promised fuel diversity by EOEEA.

    Until natural gas, and coal, can be eliminated, GHG reduction is really not possible.
    Skyrocketing rates force industry with high paying jobs to leave the state and the region.

    We need political leaders that can stand up to the unreasonable demands of the environmental lobby, and pass legislation to change the mandates for Renewable Energy into just cost effective goals.

    If Global Warming is inevitable, we need to face it with a very strong economy. The prospect of facing Global Warming, in a dysfunctional economy, is really frightening.

  • Andrei Radulescu-Banu

    Where was the Environmental League when Pilgrim, largest supplier of carbon free energy in the state, was in trouble? The League has also opposed plans for Canadian hydro in the last year of the Patrick administration. There is zero talk of building hydro sources in Massachsetts – on environmental grounds, of course.

    Really, one gets the feeling that the League is not interested in advocating for scalable policies that can bring carbon emissions under the limits mandated by the legislature. Wind is scalable, but offshore is politically feasible – which means construction is years away, so wind can’t be the only option.

    Now the League plans to raise PAC funds. The result will be pollution of our political donations system. Other special interests will take the same cue and follow suit. The result will be same as for our presidential campaign – a few powerful donors will control political candidates. The losers will be, as usual, the less affluent who can’t afford to keep up with the expected rate of political donations.

    Color me skeptical that these and other PAC funds will indeed be used to further a scalable solution to pollution problems. Instead, they will serve to turn the environmental movement into another corrupt political machine.

    Politicians would do well to bypass this and other types of PAC donations, and to judge each environmental proposal purely on its merits. Let arguments speak, not money.

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  • Jan Galkowski

    The assumption and myth here is that solar penetration of the energy market somehow depends upon these incentives. Sure, they speed up adoption, and that makes a lot of sense if there’s an energy shortfall, but solar generation and energy storage will eventually win, and it does not depend upon incentives. How this should be thought about is that if the eventually winner is not pursued, Massachusetts will have sunk huge costs, recoverable from taxpayers, which it will be paying for 30-50 years, even into a world where those fossil fuel sources are sitting idle because no one wants to pay the price for the energy they generate.

  • Jan Galkowski

    BTW, to get an overview of what I’m talking about, check out Professor Tony Seba’s assessments: https://www.youtube.com/watch?v=uApxOjZzUdU

    As far as Pilgrim goes, like its counterparts, it was and is a business loss, and so, in some sense, it’s good it’s gone.