Utilities and Massachusetts energy officials hope to tap into renewable energy from the north while opening the spigot of cheap natural gas from the south and west, they told lawmakers Tuesday.
The Bay State has among the most expensive electrical costs in the nation, and the Committee on Telecommunications, Utilities and Energy spent Tuesday afternoon hearing about the lay of the land and potential routes forward from utilities, regulators and an energy grid official.
Sen. Benjamin Downing, a Pittsfield Democrat and co-chairman of the committee, said at a future date the committee will hear from the clean energy industry and power plant officials.
Utilities have pointed to the lack of capacity in gas pipelines as a major contributor to cost spikes, because during the winter residential heat sucks up much of the gas that flows into the state, leaving some power generators without a source of fuel.
Secretary of Energy and Environmental Affairs Matthew Beaton said the lack of natural gas is a “regional problem,” and he said the governors of New England will convene next week to discuss regional energy policies.
Seeking “diversification” of energy sources, Beaton said the administration is collaborating with other New England states on a regional bid for clean energy. Canada has supplies of hydroelectric power and northern New England is developing large-scale wind farms.
“During this harsh winter I witnessed first-hand the devastation caused by intense storms exacerbated by the effects of climate change,” said Beaton.
New natural gas pipelines have been proposed from the south and the west, and National Grid, which has electrical and gas customers, said both should be approved.
“We say we need both pipelines,” said National Grid Massachusetts President Marcy Reed.
Anne George, the vice president for external affairs and corporate communications at grid-operator ISO New England, said the retiring coal and oil power plants will likely be replaced by natural gas, adding more demand. In the winter, the dirtier coal and oil plants are fired up because there is no gas from the pipeline.
Reed said National Grid “stockpiles” imported liquefied natural gas, which can be shipped through port facilities, but she said it is traded on a global market and last year New England was the highest bidder for world liquefied natural gas.
“This is not something to be proud of, nor is it a reliable or economical long-term solution,” Reed said. She said in the three winters since 2011-2012, New England paid $1.6 billion to $3.8 billion higher wholesale electricity costs.
Department of Public Utilities Chairwoman Angela O’Connor said the department had removed the “recalculation” that adds costs or credits when residential or small business customers switch from a utility’s basic service to a competitive supply of electricity. The recalculation will remain in place for larger businesses, O’Connor said.
Hoping to eliminate the need for customers to “hunt around” for a competitive supplier of electricity, O’Connor said the department is putting together a website where customers can shop and compare.
John Vaughn, the vice president of energy procurement for National Grid, said both proposed natural gas pipelines are necessary because of the demand for heating gas and because even if many plants have adequate supplies, a power plant forced to pay “scarcity pricing” could set the price on the region’s wholesale electrical market.
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