New England governors will work to prevent higher energy costs

Photo Courtesy: MGNonline

BOSTON (State House News Service) – As Gov. Charlie Baker prepares to travel to Canada next week to meet with his fellow New England governors, a new report commissioned by business groups suggests that the region will face substantially higher energy costs and lose 52,000 private sector jobs in the next five years if it fails to expand its natural gas and electricity infrastructure.

Baker plans to travel to St. John’s, Newfoundland for the annual Conference of New England Governors and Eastern Canadian Premiers, where discussions are expected to focus on energy and innovations in the energy sector that could help mitigate climate change, the governor’s office confirmed Thursday.

Traveling to Canada on Sunday and returning to Massachusetts on Tuesday morning, Baker plans to attend a welcome reception on Sunday evening followed by a meeting Monday morning with Quebec Premier Philippe Couillard and a sit-down between governors and premiers and U.S. Energy Information Administration Administrator Adam Sieminski.

Baker, one of two Republican governors in New England, has been exploring options with his fellow governors, particularly Connecticut Gov. Dannel Malloy and Rhode Island Gov. Gina Raimondo, to expand natural gas pipeline capacity to the region. He is also interested in building transmission lines from Canada to bring hydropower from Quebec to the region.

His visit to Newfoundland will also include sessions on the region’s “changing energy landscape” and another focused on “energy innovation for a low carbon economy.”

“Governor Baker views this conference as an opportunity to work collaboratively with the New England Governors and Eastern Canadian Premiers in pursuit of sustainable solutions to strengthen our energy network while lowering costs for families and businesses,” press secretary Lizzy Guyton said.

The New England Coalition for Affordable Energy released a new study on Thursday conducted by a Boston-based team from La Capra Associates and the Economic Development Research Group that concludes underinvestment in infrastructure, namely natural gas pipeline capacity, “ensures persistent and increasing energy prices and costs for the region,” which will in turn make it difficult for businesses to compete and retain and expand jobs.

Specifically, the study asserts that the lack of new energy infrastructure will cost the region $5.4 billion in higher energy costs, lead to the loss of 52,000 private sector jobs between 2016 and 2020, and reduce household spending by $12.5 billion. Researchers further claim that potential jobs associated with a $9 billion build-out of energy infrastructure total 115,600.

The study comes as lawmakers continue to mull bills to expand the state’s renewable energy output, developers eye pipeline expansion projects, and as Attorney General Maura Healey examines the state’s options and urges caution about building out natural gas infrastructure.

“Inaction is not an alternative if consumers are to see more affordable prices,” said Carl Gustin, spokesman for the coalition.

The study does not take a position on any of the proposed pipeline projects from the south or west into Massachusetts, and Gustin said, “The study recognizes we have multiple options for tapping lower cost resources.”

The coalition’s founding members include Associated Industries of Massachusetts, the Massachusetts chapter of the National Federation of Independent Business, and the Independent Oil Marketers Association of New England.

The report was provided to state energy officials in all six New England states, and Gustin said the coalition welcomes follow-up conversation. “We hope it will help inform their discussion,” he said.

Healey has suggested that reducing winter demand for gas through greater energy efficiency and investment in renewable sources may be economically preferable for consumers to expanding pipeline capacity. The attorney general announced in June that her office would lead a regional gas capacity study, to be conducted by Analysis Group, to evaluate all potential available energy resource options to meet needs, including natural gas pipelines, liquefied natural gas, oil, hydro imports, energy efficiency, demand response, and renewables.

Healey also urged the Department of Public Utilities to more closely study the region’s gas needs before committing to a new pipeline and to reconsider its denial of her motion to block local gas distribution companies’ from purchasing capacity on the Kinder Morgan pipeline.  

As the new business-backed coalition warns of economic consequences for not investing in new energy infrastructure, the state’s main LNG importer began circulating a report of its own last week contending that small pipeline improvements and liquefied natural gas could be sufficient to meet winter heating and electricity generation needs.

GDF Suez Energy North America operates the LBG terminal in Everett.

“Clearly LNG does play an important role in the region,” Gustin said, before adding that its price dependency on world markets often means LNG can be more costly than domestic natural gas.

The Conservation Law Foundation has also challenged the prevailing notion that increased natural gas pipeline capacity will be needed in the near future to meet rising energy demand across New England.

The group has maintained that public investment in energy efficiency programs and renewable energy, rather than new fossil fuel sources, would carry the best benefit for ratepayers, who might otherwise be asked to subsidize pipeline expansion.

While CLF claims the need for new gas infrastructure has not yet been demonstrated, the group told a legislative committee in May that “incremental expansion” starting with small projects would be preferable to committing ratepayers to a major new gas pipeline.

Copyright 2015 State House News Service

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