BOSTON – A month after the Patrick administration announced it had helped engineer a merger deal under which NStar will purchase more than quarter of Cape Wind energy, labor and environmental groups urged lawmakers to reject a Republican-led effort to force power companies to competitively bid for long-term renewable energy contracts.
While some business advocates and lawmakers said competitive bidding would help reduce the cost of electricity for ratepayers, opponents said the bill filed by House Minority Brad Jones and Senate Minority Leader Bruce Tarr would drive clean energy sector jobs out of Massachusetts.
“Lowest cost comes with a high price. Nothing is more costly than being without a job and this legislation would lead to more out-of-state energy, which creates fewer in-state jobs. We believe in an all-of-the-above energy policy. H 3767 is a one-of-the-above policy. We all want lower utility bills, but who cares how low your bill is if you have no job and no paycheck to pay any bills,” said Tim Sullivan, legislative director of the Massachusetts AFL-CIO.
The Committee on Telecommunications, Utilities and Energy held a hearing today on Jones’s bill (H 3767) that would require power companies to routinely solicit bids for renewable energy contracts to satisfy renewable energy requirements specified by the Green Communities Act.
Power distributors would be directed to accept the lowest cost proposal.
Throughout the hearing, the co-chairmen of the committee – Rep. John Keenan (D-Salem) and Sen. Benjamin Downing (D-Pittsfield) – appeared to be probing for common ground.
“Doesn’t it seem reasonable that the state at least find out if there’s another potential bidder?” Keenan asked, also assuring opponents that it would be unlikely a final bill would apply retroactively, as currently written.
Downing, who is working on an energy cost containment bill for the Senate, also asked several testifiers whether a competitive bidding process could be devised that takes into account factors like job creation.
“Utilities should retain their discretion in how they obtain their power,” said Dennis Duffy, of Cape Wind Associates, who argued that a competitive bidding standard for renewable energy based on least net cost would “send green jobs out of state.”
While opponents said the bill would favor large, out-of-state wind and hydro projects, requiring investments in transmission lines and discouraging spending on new technologies, supporters said the high cost of electricity in Massachusetts, exacerbated by costly renewable contracts, was having a negative impact on job growth in manufacturing and other sectors.
Rep. Randy Hunt, a Sandwich Republican, said he worried the state was going too far to promote high-tech, clean energy jobs at the expense of more traditional manufacturing jobs. “The middle class and lower middle class are not going to have the jobs that have been staples for decades and decades,” Hunt said.
According to the New England chapter of Environmental Entrepreneurs, residential electricity rates in Massachusetts have dropped from the fifth highest in the country to the 11th most expensive, in part because the state must import fossil fuels.
Still, Associated Industries of Massachusetts said high commercial electricity costs for Bay State businesses that pay 50 percent higher rates than the national average was having a chilling effect on business growth.
“The negative impact that these high rates are having on our economy is accelerating as the economy falters and even healthy companies look outside of Massachusetts to trim operating expenses,” said Robert Rio, senior vice president for government affairs at A.I.M., in written testimony.
Rep. David Vieira, an East Falmouth Republican, also testified in support of the bill, urging the committee to not only keep ratepayers in mind, but to consider making it easier for large-scale hydropower projects and nuclear to become a bigger part of the state’s energy portfolio.
“Let’s do this, and do this right,” said Vieira, who has been sharply critical of the Patrick administration’s deal with NStar as part of its merger with Northeast Utilities to purchase more than a quarter of Cape Wind energy. Vieira said the deal “seems like extortion to me,” and didn’t “pass the smell test.”
Critics of the bill, however, said to focus just on cost would ignore the stated goals of the Green Communities Act, which was to encourage energy diversity and job creation.
“Why would you spend your days trying to stimulate the economy and create jobs and then undermine the fastest growing sector of our economy?” said George Bachrach, president of the Environmental League of Massachusetts.
Louis Antonellis, the business agent for the International Brotherhood of Electrical Workers Local 103, called the bill “anti-worker, anti-jobs.”
“It does next to nothing for the ratepayer and would deal another blow to the hard-working people of Massachusetts seeking these green energy jobs,” Antonellis said.
While power providers have entered into numerous long-term contracts for renewable energy since 2008 under the Green Communities Act, the agreements by National Grid and NStar to purchase more than 75 percent of Cape Wind’s offshore wind power has drawn the most scrutiny.
Coakley ultimately backed a deal for National Grid to buy 50 percent of the generated electricity after intervening to secure a reduced, though still above average price per kilowatt hour. She has since, however, suggested that competitive bidding would help put an end to “sweetheart deals currently offered to utility companies.” The attorney general has estimated the Green Communities Act will cost consumers $4 billion over the next four years.
A Coakley spokesman said the attorney general did not provide testimony and is still reviewing the bill.
John Harper, of Birch Tree Capitol, called the bill “fatally flawed” because it fails to account for benefits aside from cost such as job creation, energy diversity and economic development.
“The notion of competitive bidding is not a bad idea, but you should have like compete against like,” Harper said, arguing that asking wind projects to compete for contracts against solar, biomass or other types of renewable energy creates an unlevel playing field.
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