Massachusetts’ Energy Sector Confronts Climate Change

By Donald Jessome and Jeff Bishop

Energy seemed much simpler before the global warming crisis. From the first days of federal regulation in the mid-1930s to the ‘deregulation’ era of the late 1990s, a basic underlying principle – maintaining a reliable power grid at affordable prices – has driven the electricity market.

Today, worldwide recognition of the dramatic increase of Greenhouse Gas (GHG) in the environment has changed everything. Federal regulations like the Clean Air Act and state laws such as the Commonwealth’s Global Warming Solutions Act (GWSA) have ended the era when energy was ‘climate blind.’ Now the energy sector is keenly focused on finding the right mix of renewable and traditional energy sources to achieve long-term GHG reductions.

The new, clean electricity landscape that is taking shape in Massachusetts is led by Governor Charlie Baker, House Speaker Robert DeLeo and Senate President Stan Rosenberg. The push is on to add clean hydro and wind power to the state’s energy portfolio because, in tandem, these resources provide low-emission baseload renewable electricity that is readily available and competitively priced.

Under proposed legislation, the state’s utilities would be empowered to initiate a procurement process where potential clean electricity projects could compete against one another on the basis of price, feasibility and environmental benefits. New projects would be approved if they are determined to be in the best interest of Massachusetts ratepayers. Under the proposed hydro and wind legislation, all clean energy proposals would be subject to independent review by the Massachusetts Department of Public Utilities in consultation with the Attorney General’s office.

This is welcome news for Massachusetts, where the electricity market is powered primarily by natural gas. The reliance on this carbon-emitting fossil fuel leaves Bay State customers subject to fluctuating fossil fuel prices. As we saw during the polar vortex, dependency on gas can lead to very large energy price spikes for homes and businesses. Ratepayers incurred $3 billion in additional costs during the winter of 2013-14 and retail electricity rates spiked by 34% in the fall of 2014.

By introducing hydro and wind resources into the New England market, the region can mitigate the growing dependency on natural gas and stabilize costs for consumers. This would occur at a time when the region will need to replace 10,000 megawatts of electricity during the coming decade that is expected to be lost as older facilities are “retired.” The proposed legislation will not only reduce the state’s growing need for natural gas, it will provide a way to substantially reduce carbon emissions.

The state legislature enacted the GWSA in 2008, thereby making Massachusetts obligated to reduce carbon dioxide emissions at power plants from 1990 levels by 80 percent, no later than 2050, including an interim goal in 2020. By opening the state to clean, affordable and reliable wind and hydro power from New England and Canada, the legislature is set to establish a clear path to meet these mandatory near-term and long-term GWSA goals in a cost-effective manner.

The pending closing of the nuclear Pilgrim Power Station in Plymouth underscores the need for new electricity resources. Because nuclear plants like Pilgrim do not emit GHGs, they can account for a high percentage of ‘clean’ energy within any given marketplace. In Massachusetts, Pilgrim is reported to account for more than 80% of the low-carbon emission electricity generation within the state’s borders.

What happens when a nuclear plant like Pilgrim closes? The 2014 retirement of Vermont’s Yankee Nuclear Power Station provides some insight. Roughly two years after that plant’s shut down, power grid operator ISO New England reported that carbon dioxide discharges at the region’s power plants rose by seven percent in 2015.  This unfortunate increase in CO2 discharges at power plants followed years of lower GHG emissions in Massachusetts and New England.

To replace Vermont Yankee’s electricity, the local energy market turned to power generated through combustion of natural gas, which is the most readily available power resource. Unlike a nuclear power station or renewable energy facilities, natural gas power plants emit roughly 40 to 50 percent of the carbon dioxide that are found at modern coal plants. Because of the region’s dependence on gas-fired power plants, Yankee’s retirement resulted in natural gas plants having to replace that electricity, which in turn yielded higher GHG emissions.

There are many reasons why Massachusetts is ready to take the next step on the road to a cleaner energy future. Popular support remains strong, with more than 80 percent of the state’s registered voters recently indicating their support for new clean, affordable electricity  The time has come for the Legislature to act on clean energy bills like those proposed by Governor Baker, Senator Ben Downing and Representative John Cusack. Future generations deserve the environmental benefits that clean, reliable and affordable North American electricity can deliver.

Donald Jessome, CEO of TDI, and Jeff Bishop, Senior Director at Brookfield Renewable Energy Group, are members of the Massachusetts Clean Electricity Partnership.

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