STATE HOUSE, BOSTON, MARCH 22, 2016…..With the House gearing up to present a comprehensive energy bill next month, Gov. Charlie Baker on Tuesday gathered the three immediate past energy secretaries – all Democrats – to showcase bipartisan support for his proposal to solicit long-term contract proposals for large-scale hydropower.
Baker, who also signaled his openness to a similar solicitation for off-shore wind power, highlighted the links between his administration’s policies on energy and those of his Democratic predecessor Deval Patrick, who also sought ways to import hydropower from Canada.
The governor and his Energy Secretary Matthew Beaton met Tuesday afternoon for almost 45 minutes with Patrick’s three former energy secretaries Ian Bowles, Richard Sullivan and Maeve Vallely-Bartlett, all of whom said they support Baker’s bill.
The meeting and subsequent press conference appeared designed to counter critics and soften the edges of his energy policy for Democratic lawmakers who are considering how to respond to his bill (S 1965) as they enter an election cycle that will make any vote’s impact on electricity prices a sensitive issue.
“The Commonwealth finds itself in a moment in time where the policy that is put forth and the bill that has been filed by the governor makes the most sense environmentally, but also makes the most sense from a cost competitive point of view,” Sullivan said.
With the impending closure of Pilgrim Nuclear Power Station and Brayton Point Power Station contributing to the projected loss of 10,000 megawatts of power generation, Beaton said the Baker administration is focused on diversifying the state’s energy mix without driving up costs or adding to carbon emissions.
“We need to make up that and balance all three of these – cost, carbon and reliability – simultaneously,” Beaton said.
One former energy secretary who did not attend the meeting was Sue Tierney, a former Weld administration official whose tenure briefly overlapped with Baker’s in the early 1990s. Tierney produced a report last year for the New England Power Generators Association suggesting that not only was the need for hydropower being overstated by the Baker administration, but that it would add $777 million a year in costs for ratepayers over the life of long-term contract.
“Today we get 2,000 megawatts from Hydro-Quebec and that’s fine, but they have to compete in the market. I just don’t want to carve up the market and give them a long-term contract that puts them at the front of the line and will lead to plant closures,” Dan Dolan, president of NEPGA, told the News Service.
Dolan said the market has already responded to the impending loss of generation at Pilgrim and Brayton Point without the incentive of long-term contracts. He said there is 3,200 megawatts of new natural gas capacity in development in Salem, Sandwich and Medway and other new or expanded plants planned in Rhode Island and Connecticut with 1,000 megawatts of additional generation capacity.
Baker said relying on the solutions put forward by NEPGA would expose the region to price volatility with no environmental benefits and lead to “natural gas across New England for pretty much everything forever.”
“If you want to play the game on the world market with no predictability around price and no reliability and a purely fossil-based solution, Ok. But that’s certainly not the one that we believe is the right one for either Massachusetts or New England and neither do the rest of the governors,” Baker said.
Beaton acknowledged that the administration is also eyeing expanded natural gas capacity and new pipelines, but said volume of gas and number of pipelines, as well as the state’s leverage to negotiate with the Federal Energy Regulatory Commission, will depend on the state’s ability to show an alternative strategy.
“We don’t want an overabundance of natural gas coming into the region,” Beaton said.
Baker said a key component of his legislation is that utilities would not be required to purchase hydropower if the bid prices were not consumer friendly. “The whole point is to get a good price….,” Baker said. “If we don’t get it we won’t do it.”
Bartlett said that during their meeting with Baker and Beaton the governor asked the three former Patrick administration officials how his approach to energy differed from the past governors.
“Really, we really couldn’t come up with any major policy shifts,” Bartlett said.
Before Patrick made a similar push for legislation that would have authorized long-term contracts for renewable energy, Bowles said he tried to negotiate a contract administratively with Hydro-Quebec but encountered roadblocks over who would pay for the transmission lines to import the power.
Bowles said the changing energy landscape in New England with the slew of closures coming down the road made for a “more poignant” case to be made to the Legislature in favor of Baker’s legislation. Baker said he believes the bids today would be competitive in the market inclusive of the cost for the power and transmission.
Dolan said he appreciates that Baker’s bill seeks only an authorization to solicit contracts and not a mandate to purchase power, but said he had “enormous concerns” that a utility like Eversource, who has a stake in building the Northern Pass transmission line through New Hampshire, would also be a bidder.
George Bachrach, president of the Environmental League of Massachusetts, has also questioned Baker’s commitment to a so-called “combo platter” on energy given his focus on hydropower. Bachrach would like to see a similar focus on expansion of solar and land-based and off-shore wind.
“Hydro is one piece of the puzzle, but it should not stand alone. If we want to diversify our portfolio, hydro procurement from Canada should also include on-shore wind from New England. And if we’re cheering on (General Electric) for locating in Boston, why not do the same for DONG, the largest off-shore wind developer in the world, who also wants to build their US HQ here?” Bachrach wrote in an email Tuesday.
House Speaker Robert DeLeo, who has said he would like to debate an energy bill next month, has hinted that House leaders are looking into procurements of not just hydropower, but off-shore wind as well.
Baker said he has seen proposals from the deep-water wind industry that “make sense economically” and would be interested in a solicitation for wind power as well, as long as there is no mandate that power be purchased regardless of price.
Copyright 2016 State House News Service