Striking the Right Balance: Affordable Energy, Renewable Energy
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The following is an opinion piece from State Senator Katherine Clark:
Last week the State Senate acted to address the high cost of electricity in Massachusetts. The Senate unanimously passed energy legislation that supports job creation, economic recovery and innovation by encouraging the growth of our renewable energy sector. By creating more competition for energy contracts, this bill will bring down prices and lead us further down the path to a cleaner, more diverse and sustainable energy supply.
The average electric rate in Massachusetts is 14.24 cents per kilowatt hour, which ranks as seventh highest in the U.S. and well above the national average of 10 cents. These rates are a major cost driver for businesses and families.
Our rates are high for several reasons: fossil fuel prices are high, and unlike some other parts of the country, New England does not possess an abundance of natural resources like coal or gas. We also have an aging transmission and distribution infrastructure and a need for greater accountability from investor-owned utility companies.
Our long-term energy future, economic growth and environmental health all depend on a commitment to producing more energy from renewable sources like wind and solar power. According to the Massachusetts Clean Energy Center, there are 4,900 clean energy firms in the Commonwealth and over 64,000 clean energy workers. Even in a difficult economic period, our clean energy sector grew 6.7 percent from 2010 to 2011.
The Senate bill aims to both reduce the price of electricity and support renewable energy by identifying cost-drivers, reviewing rates on a more regular basis, and demanding more competition.
The bill would end the current long-term contract program and require investor-owned utilities to competitively bid proposals for long-term renewable energy contracts and increase the amount of renewable energy to 7 percent of their energy supplies. The legislation also doubles the existing limits on municipal and privately-owned projects that generate their own renewable energy by increasing the amount of on-site renewable energy that customers can sell back to the grid (so-called “net-metering”).
Other provisions of the bill would change how the Department of Public Utilities (DPU) reviews rates and manages increases, including a requirement for the DPU to spread any large rate increase over two years.
This bill embraces our twin energy challenges: lowering prices for our families and our businesses and building our clean energy sector for a more balanced, sustainable energy future.