Opinion 2: It's Time To Invest In Electricity Transmission
By Richard Kennedy & Joyce McMahon
Special to the Worcester Business Journal
Faced with high energy costs, what positive steps can Massachusetts take to benefit businesses and consumers? A new report by the New England Energy Alliance and the Massachusetts Affordable Reliable Electricity Alliance (Mass AREA) shows the importance of investing in Massachusetts' energy transmission system.
Massachusetts is part of a regional electric grid that contains the other five New England states. Two distinct portions make up the system: generation and transmission. The transmission system serves two vital roles: first, to ensure that electricity flows from power plants to population centers and second, to facilitate implementation of the region's wholesale electricity market.
Recently, observers have suggested that the current transmission grid is akin to having clogged arteries. The time to deal with our overtaxed transmission grid is now - before disaster strikes.
Pricey Problems
An outdated transmission system is dangerous. The August 2003 electricity blackout that affected 50 million people in eastern states (outside of New England) and parts of Canada reinforced the fact that electric grids are only as strong as their weakest link.
Our system is aging. Most of it was constructed 40 years ago and was intended to serve approximately 20,000 to 25,000 megawatts of electric load - not the most recent peak load of about 28,000 megawatts. More importantly, demand continues to increase. In addition, the system's original designers had no way of knowing that a restructured electric market would result in heavy use by more than 300 companies.
Massachusetts has the fourth highest electricity prices in the nation. Some of that is a result of the region incurring $1.6 billion in system inefficiency costs over past five years. This places the region's businesses at a competitive disadvantage and denies consumers hard-earned income.
Much of these inefficiency costs are a result of "congestion" - the inability to get cheaper power to high-demand areas because the transmission lines are not large enough to handle the capacity. The congestion then causes local, less efficient, more costly, and often "dirtier" plants to have to run.
In the last 10 years, there has been close to $1 billion invested in the transmission infrastructure including some major improvements in Connecticut and Boston. However, ISO-New England, the organization charged with managing the electric grid, has identified approximately 137 projects totaling nearly $626.5 million in system improvements needed in Massachusetts alone.
If we don't implement these system updates and expansions, the system's present reliability will decline.
Investing in the transmission infrastructure will result in significant benefits, from increased reliability, to lower electricity costs, to increased access to cleaner, more efficient generating facilities and renewable resources.
Going forward, Mass AREA and the Worcester Regional Chamber strongly believe that regulators should judge transmission projects on their economic and environmental merits in addition to their ability to improve system reliability. They also must implement siting reform in order to combat not-in-my-back-yardism that delays and often raises project costs.
The present system conditions undercut competition and negatively impact consumers, the economy and the environment. The time to invest is now.
Richard B. Kennedy and Joyce McMahon coauthored this opinion piece. Kennedy is president & CEO of the Worcester Regional Chamber of Commerce, a member of Mass AREA. McMahon is director of communications for Mass AREA.
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