Baker administration officials checked “all-of-the-above” on the energy front on Tuesday, telling lawmakers on Beacon Hill that they favor expansion of the region’s natural gas pipeline capacity, back the importation of more hydroelectricity from Canada, and support clean energy.
Matthew Beaton, the secretary of energy and environmental affairs, read a statement offering a broad overview of the administration’s priorities and its desire to bring down electricity prices, which are among the highest in the nation. Beaton was emphatic that the best way to bring costs down, and avoid rolling brownouts in the future, is to bring more natural gas into the region.
“It is a simple case of supply and demand, and in peak times we don’t have enough supply,” he said.
Environmentalists are worried that building new pipelines to bring cheap natural gas into the region will undercut efforts to promote renewable energy, but Beaton saw no conflict. “We are fully devoted to a clean energy future,” he said. Alicia Barton, the CEO of the state’s Clean Energy Center, said clean energy is a $10 billion industry in Massachusetts, accounting for more than 88,000 jobs. She said the state is No. 2 in solar jobs, ahead of Arizona.
Beaton and other members of the administration testified at a “state of energy” hearing at the State House hosted by the Legislature’s Committee on Telecommunications, Utilities, and Energy. The committee plans to hear from others on the topic at a second hearing in May.
At Tuesday’s hearing, utility executives adopted positions similar to those espoused by the Baker administration, although they also made a point of saying some of the state’s renewable energy incentives are way too costly and should be scaled back.
Marcy Reed, president of National Grid Massachusetts, said she supports the construction of two new natural gas pipelines into the region to bring down electricity costs and to allow more customers to shift to gas for heating and cooking. She said she would welcome hydroelectricity from Canada, but stressed that the state’s current subsidies for renewable energy are not sustainable.
She said the cost of one form of subsidy, called net metering, is expected to double in National Grid’s service area from $35 million in 2014 to $71 million this year. She said the cost of solar renewable energy credits is expected to rise from $59 million in 2015 to $228 million this year. She estimated the cost of solar subsidies will be borne by the utility’s non-solar customers over the next six years to the tune of $2 billion.
Reed said National Grid supports solar and other forms of renewable energy, but would like to see a more rational approach to financing their development. “We have the most lucrative incentives across 50 states,” she said. “I don’t know why we need to be in that position.”
Patrick Smith, the manager of energy supply for Eversource (formerly NStar), said his utility favors the construction of one new natural gas pipeline. He also lamented the high cost of solar subsidies, saying solar and other renewable energy subsidies cost customers about 1.5 cents per kilowatt hour, or between 9 and 15 percent of a customer’s power cost, depending on the time of year. “Massachusetts is paying more than it needs to,” Smith said.
Anne George of ISO New England, which operates the regional power grid, said New England avoided power shortages this winter by reducing its reliance on natural gas. She said some power plants shifted from natural gas to dirtier fuels such as oil and coal. She also said greater quantities of liquefied natural gas were imported.
George said new natural gas pipeline capacity is needed because oil and coal plants will be shutting down in coming years and be replaced by and large by natural gas plants. She also said LNG cannot be counted on as a reliable fuel. Without action to address the shortage of natural gas pipeline capacity, George said, a winter problem could become a year-round problem.
Sen. Benjamin Downing, the cochair of the committee, was skeptical about the push for more natural gas pipelines, noting that the region already gets more than half of its electricity from gas-fired power plants. He asked several panelists whether it was wise to increase that percentage. “Are we putting all of our eggs in one basket?” he asked.
He also tried to downplay the utility concerns about the cost of renewable energy subsidies, saying the state needs to promote renewable energy in the most cost-effective way possible.
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