 Small business owner John York in Salem, New Hampshire, received his electric
bill last Friday and was stunned by what he saw — his utility bills nearly
quadrupled compared to this time last year, going from $675 for January 2014 to
$2,432.
“This is just awful,” said York, who owns Allegra Marketing and Print Mail, with
two employees in a 1,900 square-foot space.
What does this mean for his business?
“It means less money for the owner because I’m the one who has to pay the bill,”
York told Watchdog.org, adding that his company’s energy usage has not changed
since last year.
York’s case may be dramatic, but others in the region are also feeling the pain.
Electricity and heating costs have spiked in the six states stretching from
Connecticut to Maine, even though natural gas prices across the country have
remained consistently low.
The chief reason?
New England doesn’t have enough pipeline capacity to service its energy users.
“Supplies that the area has historically relied on were no longer attractive for
various reasons — cost, environment, whatever it was,” said Geoffrey Styles,
principal at the GSW Strategy Group, an energy consulting firm in the
Washington, D.C., area. “The whole area has been allergic to infrastructure
projects for at least the last decade.”
Energy for many New England states used to come a variety of sources, but coal
and oil-fired plants have been shut down in recent years, largely due to a
combination of environmental regulations and the low cost of natural gas.
As a result, the region went from getting 15 percent of its energy from natural
gas in 2000 to 46 percent by 2013.
Pipeline construction hasn’t kept up and that’s led to the price spike.
“We had a nuclear plant in Vermont, Vermont Yankee, that’s retiring, a coal
plant in Massachusetts, Salem Harbor, that’s retiring, and with that, it’s basic
economics: Fewer plants, less supply to meet demand, and there’s a price
response,” Dan Dolan, president of the New England Power Generators Association,
told New England Cable News last fall.
What’s more, the six states that make up New England are supplied by only two
pipelines and share the same integrated electrical grid.
In 2014, utility companies warned about a spike of up to 37 percent when winter
set in and now those predictions have come true.
“We call it a crisis,” said Jim Roche, president of the New Hampshire Business
and Industry Association, who worries the higher costs will hurt the state’s
economy.
“We know in New Hampshire that we have lost business expansions,” Roche said. “I
think the spiking electrical energy prices may well mean that existing
employment in New Hampshire may be quietly moved elsewhere.”
Building more pipelines is proving much easier said than done.
Kinder Morgan, one of the world’s biggest pipeline and infrastructure companies,
wants to build a line — called the Northeast Energy Direct project — connecting
the plentiful natural gas supplies in the Marcellus Shale formation in
Pennsylvania to Massachusetts.
But the proposal has received furious pushback from environmental groups opposed
to hydraulic fracturing, as well as from property owners who don’t want a
pipeline running through or near their property.
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 “This project, aside from causing environmental disruption during
the construction phase, would post many hazards if there are leaks,
ruptures or explosions,” said a post on the website run by No
Fracked Gas in Mass, an organization that has helped organize
rallies against the plan.
“Building big pipelines not only locks us into a system we need to
outgrow but also undermines efforts to address the climate crisis,”
Shanna Cleveland, an attorney at the Conservation Law Foundation,
told the New York Times.
Pipeline opponents have called for concentrating on energy
efficiency and expansion of renewables, but analysts have expressed
doubt those measures can meet New England’s growing demand.
“The area is understandably interested in renewable energy, but
there are clearly limitations to what you can do with renewable
energy,” Styles told Watchdog.org. “Massachusetts has some pretty
attractive solar subsidies, but if you look at putting solar in
Massachusetts, it’s not a very good place to put it because there’s
not enough sunlight … Wind power is fine, but nobody wants it on
mountaintops and nobody wants it in sensitive areas. And even there,
it’s intermittent.”
SPIKING ENERGY COSTS: A bill for $1,809 received by small business
owner John York for his production unit for January. The bill for
his company's remaining unit came to $623.
SPIKING ENERGY COSTS: A bill for $1,809 received by small business
owner John York for his production unit for January. The bill for
his company’s remaining unit came to $623.
But even if the pipelines get approved, it’s estimated to take three
to four years for them to become operational. That doesn’t provide
much relief for low-income residents seeing a big hike in their
electric bills or small business owners like York.
“While I agree we need to be as green as we can, the bottom line is
that we need this,” York said. “We’re in the Northeast. We need
affordable heat … I don’t know how (opponents) expect it to be
inexpensive. They don’t want coal. They don’t want nuclear power so
that leaves gas as the power of choice for electricity.”
“Our position is the state and the region need to do all they can to
encourage expanded pipeline capacity and transmission capacity,”
Roche told Watchdog.org in a telephone interview. “We’re not picking
any particular project, but it’s quite clear we don’t have enough
capacity in the region.”
In 2013, it appeared a political solution might ease the financial
pain when the governors of the six New England states agreed to
pursue a strategy for more pipeline capacity and establishing at
least one major hydropower transmission line.
But the Massachusetts Legislature backed out, citing a number of
reasons that included concerns that cheap energy would flood the
market and hinder wind and solar projects.
“You have all this gas right next door (in Pennsylvania),” said
Styles. “If you look at the Marcellus Shale, this is one of the
largest natural gas deposits, certainly in North America, but even
in the world. It’s really the long-term gas supply for the whole
Northeast … If New England is going to rely on natural gas, they
need a way to get it from where it’s being produced … to their
markets,” Styles said.
In the meantime, York is left trying to cope.
“This (latest bill) is just one month,” he said in a telephone
interview. “Let’s say this occurs for the months of February, March,
April and May. That’s $10,000 that I have to pay that would have
been income for me. I can’t pass those kinds of increases to my
customers. We do a hundred, 120 jobs a months. If I were to pass
those costs on, I’d have to hit every customer with a $20 electrical
charge. They’re not going to accept that.”
[This
article courtesy of
Watchdog.]
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