State government legislates higher electricity costs


Earlier this year, we learned that the Green Communities Act had increased the cost of electricity to Massachusetts residential and business ratepayers.

Now, encumbered as the energy and electricity generation market is by federal- and state-imposed regulatory burdens, the state legislature is at work on a new measure that will add even greater costs for consumers.

After a careful review of the current law, Martha Coakley, the attorney general of Massachusetts, drew attention to the forecast that state ratepayers — homeowners and businesses — will shell out billions in higher electricity costs, because of the state’s crazily generous subsidies for the creation of large-scale, non-fossil fuel generation and the regulations supporting overpriced electricity generated by solar, but especially wind.

General Coakley testified at a hearing before the legislature’s Joint Committee on Telecommunications, Utilities and Energy. The hearing examined the 2008 Green Communities Act that set goals and incentives for clean energy production and consumption.

“Despite helping to stimulate job growth in the clean energy sector and reduce carbon emissions, the 2008 Green Communities Act has come at a cost to consumers, which is expected to grow by up to $4 billion over the next four years…”, according to a State House News Service report of Ms. Coakley’s testimony at the hearing.

She said the cost of implementing the program over the next four years will cause delivery costs for electricity to rise seven percent by 2015. And Massachusetts electricity costs, more than $22 billion annually, are already among the highest in the nation.

The legislation, approved by the state Senate and on its way to the House, requires electricity distribution companies to increase the amount of expensive renewable energy they must buy in long-term contracts. And this, when natural gas, used increasingly to fuel generating plants, is abundant, relatively cheap, and clean. Also, the legislation does not allow for the purchase of inexpensive, environmentally friendly hydroelectric power generated out of state. The legislation also demands that power suppliers double the required amount of net-metering juice they accept from customers and credit at retail rather than wholesale prices — an indirect hit on ratepayers.

The combination of provisions in the new legislation takes damaging aim at consumers’ pocketbooks and spurns the attorney general’s warnings.

Ms. Coakley recommended that long-term renewable energy contracts be competitively bid. The Patrick administration disagreed with the notion of competitive bidding, but the new legislation incorporates competitive bidding in the market for renewable energy, in ways that increase the likelihood that wind power will succeed in the bidding and threaten even greater impositions on the Vineyard’s land- and seascapes.

This measure hardly reads like a government effort to restrain the growth of electricity rates by encouraging the electricity generation industry to be as efficient, productive, and clean as it can be. Instead, it smells like legislators treating a core utility like a push me-pull me toy, in a confused attempt to placate critics of existing policy and frothing interest group demands at the same time.

Finding a way to spur funding for the hapless Cape Wind project and other offshore wind proposals is a goal here. And doing so by penalizing taxpayers and ratepayers in Massachusetts is the means.