Advice for Beacon Hill energy conferees

THE MASSACHUSETTS HOUSE AND SENATE are to be commended for passing important energy legislation in recent weeks.  Both bills represent the most important steps forward to date to further the landmark 2008 Green Communities (GCA) and Global Warming Solutions Acts (GWSA).  As a conference committee of House and Senate lawmakers moves to develop consensus legislation, I offer my perspective on some of the key provisions.

Greenhouse gas reductions:  A major increase in hydropower was a central element of the 2010 implementation plan for the GWSA and remains the most important single step Massachusetts can take to reach its 2020 emissions target.   A few key details are important.  First, the Supreme Judicial Court appears to have made a short-sighted mistake in its recent decision on GWSA implementation by suggesting all emission reductions have to come from within the boundaries of Massachusetts. This makes no sense given our fully integrated regional electricity market and tends to kick important regional efforts (enacted by the Legislature also), such as the Regional Greenhouse Gas Initiative, to the curb.  As it creates a mandate for more hydropower, the Legislature should clarify that the resulting electricity counts toward GWSA compliance.  Second, related to this, such power contracts should be for projects ready for the 2020 deadline – there are several teed up and they should be the focus.  Third, size matters and more is better.  I would encourage the Legislature to reach higher on volume of power mandated.

Natural gas:  In many parts of Massachusetts, notably Cape Cod and the Berkshires, there is a moratorium on new connections for gas service.  Gas remains the fuel of choice for home heating and cooking and is the key flexible fuel that will allow our fleet of electric generation units to provide reliable power for Massachusetts as we make the transition to a low-carbon future.  More little pipes to serve homes and businesses can’t happen without more, bigger pipes to bring gas to our region.  In addition, the winter electricity price spikes of two years ago are bad for consumers and give critics of renewable power the opportunity to grandstand about costs even if actual, more renewable power is the answer, not the problem!  Environmentalists make the inaccurate argument that “if we build more gas capacity and energy infrastructure, we will be stuck with it forever.” This is clearly not true.  For example, the Brayton Point coal generating unit spent some $1 billion on massive new cooling towers only to decide less than five years later to shut down.  Similarly, expensive new floating buoy systems off of Gloucester for importing more liquefied natural gas sat idle for several years before being used when market conditions required them.  My view is that the Legislature should resist the temptation to preclude the utilities from trying to find new ways to contract for natural gas capacity if those ways can be demonstrated to save money for ratepayers.  We need more gas in Massachusetts as our coal, oil and nuclear electric generation capacity goes offline and more people move off of home heating oil.

Wind power:  Let’s not overlook how cheap and prevalent land-based wind has become in Maine and many other places that serve the Massachusetts electricity market.  I am all for moving forward to develop an offshore wind industry in our state and the presence of new European players like DONG Energy open up the prospect for large scale offshore development and lower costs.  But this push for offshore wind should not shortchange the opportunity to also pick up a lot more other wind resources that are available today in abundance.  We are doing very nicely achieving our state’s mandates to steadily increase our percentage of power that gets Renewable Energy Certificates and the time is right, as the Senate bill suggests, to increase that annual requirement.

Energy efficiency:  Our state has now held the No. 1 national ranking on energy efficiency for five years in a row.  Energy efficiency should always be our top priority because it is the cheapest and greenest option out there.  It is very encouraging that the Legislature included a strong set of new incentives for energy efficiency in both pieces of legislation.  These include a new home energy rating system, a provision to start property tax-based financing (PACE) for energy retrofits, and other measures.  Ten years ago, the real estate broker lobby fought hard to kill a requirement that homebuyers be given basic energy audit information about a home they might buy.  Consider this: We require disclosures about lead, wastewater treatment, and other matters but energy use is going to be one of the biggest budget items for a homeowner.  When we buy a car, the miles per gallon are posted right on the window.  Shouldn’t we be giving the miles-per-gallon equivalent for a home – a purchase that is generally the biggest investment any family makes?  And, ideas like PACE, that are taking off in other states should be tried here as well.

The energy legislation passed by both branches of the Legislature represents a key push forward for our state.  I hope the conference committee takes the best features of each bill and gives us a solid new platform for years to come.

Ian Bowles is co-founder of WindSail Capital Group and served as Massachusetts secretary of energy and environmental affairs from 2007 to 2011.