Ratepayers Burdened By Green Jobs Focus
The Massachusetts Department of Energy Resources (DOER) is charged with overseeing and coordinating the commonwealth’s energy policy and energy programs, and ensuring the benefits of conservation and renewable energy to consumers. Recently, however, as the DOER pursues grandiose green goals, it has forgotten the people who actually pay the bill — the ratepayers of Massachusetts.
Massachusetts, with the nation’s highest electricity costs, has lost more than 100,000 jobs in the past year, including 25,000 industrial jobs. We need to get our priorities right by putting the ratepayer first, or we risk another wave of company closures due to uncompetitive energy costs.
Uncoordinated Action
The Green Communities Act of 2008 promised coordination among energy and renewable programs, encouraging “green jobs” and renewable energy and enhancing energy efficiency to help stabilize rates. Two years later, we instead have a plethora of uncoordinated, conflicting and experimental programs that may result in unprecedented increases in electric rates.
In that past year, the Department of Public Utilities has approved several rate increases to implement the act, approving ratepayer-funded experimental or untested programs relating to smart grid, net metering, long-term contacting for renewable energy and provisions for utilities to pass through costs of owning solar installations. A general rate increase tied to the administration’s “decoupling” plan, which allows utilities to raise rates to make up for reductions in power consumed by their customers and increases in energy efficiency spending, is under review. AIM estimates that 2010 will see the beginnings of a three-year, $1.5 billion rate increase. With so many programs being decided so fast, some of the programs overlap and some simply are puzzling.
For instance, utilities are required to purchase a rising percentage of their overall energy needs from an unspecified mix of renewable resources (wind, solar, new hydro and bio-mass). Now, with those other programs pending, along comes DOER with another proposal to require that a portion of renewable energy requirements be supplied only by solar energy, at an estimated cost to ratepayers ten times that of current renewables (which themselves are higher than traditional power). And solar installations built and owned by utilities under the brand-new ratepayer-funded program won’t count towards the total!
What has gone wrong?
A couple of years ago, DOER was moved from the Consumer Affairs department to Energy and Environmental Affairs. As a result, the agency’s renewable subsidies and other programs have focused increasingly on how many “green jobs” are created, a one-sided view that sacrifices both consumer interests and existing industries and employment, which become collateral damage in the effort to produce employment gains in favored areas.
It’s a doomed strategy. Policies like this will not transform the electric system; they won’t create a lasting competitive industry for Massachusetts or save money. They will raise rates and cost jobs.
High costs to support experimental or irrational programs that don’t pass even basic cost/benefit analysis are taking us backwards. If we don’t change and reassess our priorities, in three years we will have higher electric rates, lower employment, and a realization that we should have done things differently. It’s time to pull the plug on this failed strategy.
Brian Gilmore is the executive vice president of public affairs for the Associated Industries of Massachusetts (AIM), a nonprofit, nonpartisan employer association of 6,000 Bay State businesses and institutions.
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