In its April 27th Order on the request by the Department of Energy Resources (“DOER”), the Department asked some critical questions regarding the causes behind high regional electricity prices, the exact parameters of any constraints, and what resources or commercial mechanisms could potentially alleviate them. However, given that we do not yet have the answers to these questions, it would be premature for the Department to embark on a campaign of seeking new natural gas delivery capacity. In short, it is our overarching position that:
- There are myriad drivers of electric costs, many of which are outside the control of the Department, and the most significant of which is the supply and demand of electricity. Only by phrasing its inquiry as one of electric prices, supply, and demand, can the Department ensure that the results actually deliver the most cost-effective and lowest risk source of electricity to Massachusetts ratepayers;
- We do not know whether any additional natural gas capacity would cost-effectively reduce wholesale electric prices, once all existing market mechanisms, and the full potential for efficiency and renewable generation throughout the region are taken into account;
- If it is determined that there is insufficient gas capacity for electric generation, it should be procured by gas-fired generators, through ordinary market channels, as a cost of doing business, rather than underwritten and subsidized by electric distribution utilities.