BOSTON, MA – New publicly-funded natural gas pipelines in New England are unnecessary according to a new study by the Massachusetts Attorney General’s Office. This finding is validated by significant developments in the region’s energy markets, including:
- Improved planning and market reforms that have avoided electricity price increases despite record cold weather
- Expanded efficiency programs that are reducing energy demand cost-effectively
- Large-scale procurement for natural gas alternatives such as wind and hydroelectric power
- Backup generation that new natural gas power plants will install to reduce reliance on natural gas during infrequent peak demand periods
“Acadia Center has long argued that the public should not be forced into the novel role of underwriting expensive, risky, privately owned pipeline projects before a full and fair considerations of all viable alternatives,” said Daniel Sosland, President of Acadia Center. “The recommendations of this study prove the wisdom of not rushing to the conclusion that new pipelines are the only solution to a reliable and affordable energy system. It is encouraging to see that analysis is demonstrating that natural gas market reforms and clean energy alternatives offer better, more affordable options.”
Lower electric prices due to market reforms: Massachusetts’ electricity prices are declining due to improved planning and market reforms. Specifically, Eversource’s winter rate of 10.39 cents/kWh is 27% lower than last year’s rate, and National Grid’s rate of 13.03 cents/kWh is almost 25% lower than last year. Lower prices are due in part to market reforms implemented by the regional grid operator ISO-New England and planning requirements established by the Federal Energy Regulatory Commission. In conjunction these reforms are improving utilization of existing gas delivery infrastructure and leading power generators to develop plans for ensuring adequate fuel supplies during winter peak.
Energy efficiency reducing electricity demand: Massachusetts’ and other New England states’ aggressive energy efficiency programs are causing winter energy demand to decline, reducing the need for additional pipeline capacity and other energy infrastructure. Despite using conservative assumptions that overstate the cost and understate the impact of efficiency programs, ISO-NE predicts that winter peak demand will decline by 0.1% annually through 2024, and the actual impact of energy efficiency is likely far greater. Acadia Center has demonstrated that ISO-NE consistently overestimates energy consumption and peak demand: winter peak energy demand was 24% lower in 2014 than the 2006 projection, and total 2014 energy consumption was 17% lower than the 2006 projection. These inaccurate projections overstate the need for expensive energy infrastructure, including oversized natural gas pipelines that could be used to support gas exports overseas the majority of the year.
Clean energy procurement will displace gas generation: On November 12th Massachusetts, Connecticut and Rhode Island released a Request for Proposals (RFP) for significant quantities (up to 1,000MW plus) of hydroelectric, wind, and solar energy that will displace natural gas generation and reduce power sector natural gas demand. Legislative proposals in Massachusetts to procure additional hydroelectricity and wind could more than double the quantity of energy in the RFP, offsetting even more natural gas demand. It is worth noting that the costs for hydroelectricity and renewable energy are conservatively overstated in the Attorney General’s report, and actual prices for blended wind and hydroelectricity would have to be lower to compete in the regional electricity market.
Gas plants with limited backup generation: New power plants approved through the regional grid operator’s Forward Capacity Market Auction in early 2015 all include natural gas generation with oil backup. On the few coldest days when natural gas supplies are dedicated to meeting heating needs, these plants will run on oil. This modest, limited use of oil generation during winter peaks in the near term, before more renewable generation comes online, would have a far smaller impact on GHG emissions than new pipelines used year-round, and would be less expensive to consumers than pipeline expansion
“This study is matched by facts on the ground,” said Peter Shattuck, Massachusetts Director for Acadia Center who served on the report’s Study Advisory Group along with representatives from utilities, the natural gas industry, and clean energy and consumer groups. “Commonsense market reforms, improvements in energy efficiency, and new clean energy supplies coming online are already addressing winter price volatility, making it clear that massive outlays for subsidized gas pipelines are an unnecessary risk for Massachusetts citizens to bear.”
Peter Shattuck will be taking part in a press availability call at 11:30 EST today to discuss the findings of the report, joining leaders from the business, municipal, and health sectors, including:
- Jed Proujansky, Selectman of Northfield, Massachusetts.
- Andy Savitz, Director of Sustainability for the City of Newton and author of The Triple Bottom Line, a nationally-acclaimed handbook for business leaders seeking to embrace sustainable business practices.
- Tedd Saunders, Chief Sustainability Officer at the Saunders Hotel Group.
- Bill Ravanesi, Senior Energy Director with Health Care Without Harm.
Wednesday, November 18, 11:30 EST
Conference Call: 712-775-7031, PIN: 301-222-738.
Peter Shattuck, Clean Energy Initiative Director
firstname.lastname@example.org, (617) 742-0054 x103
Kiernan Dunlop, Communications Associate
email@example.com, (617) 742- 0054 x107
Acadia Center is a non-profit, research and advocacy organization committed to advancing the clean energy future. Acadia Center is at the forefront of efforts to build clean, low-carbon and consumer-friendly economies. Acadia Center provides accurate and reliable information, and offers a real-world and comprehensive approach to problem solving through innovation and collaboration.