A six-state solution on energy makes sense

Sylvia says regional approach is transparent

Your recent article entitled “A regional power solution” suggests that the six New England states are plotting a solution to our regional energy challenges without public engagement or a rationale. The Patrick administration feels compelled to set the record straight.

We all know that New England has some of the highest energy costs in the nation, due to constraints on our overall energy system and our geography. Moreover, any solutions to addressing these issues require a multi-state approach as we share the same energy infrastructure. Over the last several years, the New England states have invested in energy efficiency and renewable energy to reduce demand and greenhouse gas emissions. And we have been successful. But despite our best efforts, there are still challenges we face today and into the future. Thousands of megawatts of electric generation will be coming off line in the near future. Our electric prices this past winter increased dramatically due to capacity constraints causing dirtier and more expensive oil and coal plants to run more frequently to meet demand. And while overall electricity prices across the United States are lower due to natural gas, here in New England we have seen prices increase many fold.

Market inaction has cost our region $3 billion this past winter alone — more than the cost of a new transmission line or gas pipeline — and put our families and businesses at risk of significant increased costs and potential future power outages. The current market failure is not working for our economy or the environment — and to not work with the other New England states on this issue would be irresponsible.

Massachusetts is committed to a six-state solution that enables us to help meet our greenhouse gas reduction mandate, improve system reliability, and stabilize costs. To do so, the six states have committed to a process, outlined by the six governors in a statement issued in December 2013, that would allow for open and transparent regional solicitations for electric transmission (to support clean energy such as wind and hydro) and a natural gas pipeline. It would also provide an electric ratepayer cost recovery mechanism for both through Federal Energy Regulatory Commission tariffs that would be filed by ISO-New England in the case of the gas pipeline and by the transmission owners (utilities) in the case of electric transmission. These tariffs create an option for cost recovery and are only utilized if proposed projects, which are competitively solicited through a public regional process, provide significant benefits over costs and receive approval from FERC. We emphasize that the competitive procurement process has not been initiated and the states have made no decisions whatsoever with respect to any projects.

Most of the work to date has been done through ISO-New England, the New England Power Pool, and the New England States Committee on Electricity and focused on information-gathering and policy development. The six states collaboration has been covered widely in the press and NESCOE has posted policy information, power-points, and analysis conducted on these topics on their website. Tariffs have not been filed nor have requests for proposals been issued. Forums have been held recently on the tariffs and a draft request for proposal for electric transmission will be issued next month for public comment.

For Massachusetts, passage of the Clean Energy Resources bill is needed. This bill allows for both Class 1 Renewable Portfolio Standard (RPS) technologies such as on-shore wind, offshore wind, solar, and large-scale hydro to compete for long-term contracts. These resources not only will help us tackle our greenhouse gas emission reduction mandate, they will enable us to address our reliability challenges not by running coal and oil plants but by replacing fossil fuel plants with clean renewable energy. The approach will also enable us to stabilize costs and balance intermittent renewables with base-load clean power.

Under Gov. Deval Patrick, Massachusetts has led the nation in energy efficiency three years in a row. This unprecedented investment in energy efficiency has led to a flattening of our annual electricity use, helped reduce carbon emissions (representing over 60 percent of the 25 percent reduction goal), created jobs, and reduced energy costs for citizens. Through the renewable portfolio standard, net metering, and long term contract procurements, our deployment of clean renewable energy has led to cleaner generation provided to citizens, reduced costs to customers, and helped to avoid electric supply interruptions, especially during peak summer days.

Through our Clean Energy and Climate Plan, Massachusetts has realized over 16 percent of the 25 percent reduction in greenhouse gas emissions required by 2020. Through energy efficiency, renewables and efforts in transportation we are well on our way – but more needs to be done. The plan calls for 5 percent of the 25 percent reduction to come from clean energy resources such as wind and large-scale hydro. Procuring these resources and providing the necessary transmission is critical to that end.

Meet the Author
Massachusetts agrees that there has to be a more robust discussion about our energy needs and the need to act regionally. That is what we and the other five New England states are committed to doing now and in the future.

Mark Sylvia is the undersecretary of the executive office of Energy and Environmental Affairs.