The State of Energy Markets in New England
Today I had the pleasure of being an attendee at an event featuring Secretary Matthew Beaton at the Worcester Regional Chamber of Commerce. The event provided an opportunity to hear first hand the administration’s opinion on the energy markets and what is being done to ensure capacity meets demand, lower costs, and become a cleaner Commonwealth.
Overall I was encouraged by the general direction of the Secretary’s vision, and applaud the efforts of the administration to be a leader in clean energy. However, what I didn’t hear was a plan to affect change in the immediate or short term to what Secretary Beaton called, “the most expensive electricity in the country”. Let’s break down why rates are most likely to continue to rise in New England.
Supply vs. Demand
Demand for energy is rising, right now Massachusetts is having trouble meeting that demand. It is so severe, Secretary Beaton shared with the audience that over the Labor Day weekend, ISO-NE and utilities barely avoided a brownout or blackout scenario as demand far outweighed the estimated supply needs.
With Brayden Point shutting down last year, Plymouth closing its production, and Seabrook being debated now, we are going the wrong way to meet demand. That’s bad for prices. Yes, the wind power off Martha’s Vineyard will help, and so won’t the hydro power from Quebec, but when? Infrastructure still needs to be built to get that energy to Massachusetts customers.
Natural Gas Shortages
We continue to shut down coal and nuclear powered generation stations. Without ensuring we have enough supply from alternative fuel to power the plants, we are left with a shortage of resources to create the electricity we need. Natural gas is quickly becoming the preferred way to produce electricity. The problem is, we do not have the infrastructure in place to deliver the natural gas needed to produce enough electricity. With the pipelines being fought tooth and nail, we are essentially asking drinking straws to act as garden hoses. Until we are able to physically bring more affordable natural gas to the area, costs will remain high.
Massachusetts has some of the oldest electric infrastructure in the country. As that grid needs to be replaced, the rate payers and end users of electricity will be the ones footing the bill. There isn’t a lot to say here, just let me know if you believe the utilities are going to be shelling out the billions of dollars for badly needed upgrades.
All of that said, it isn’t all bad. Massachusetts is a leader in this industry and very positive changes are coming that will benefit the greater good. There is a keen and definitive stance on leveraging the latest technology to quicken the pace of clean energy. Whether it be battery storage, advanced metering, or new ways to merge energy with technology to curb peak demand, the administration is investigating it.
All of that will take time, more time than many businesses can afford. Now is the time to lock in energy rates before they rise. If you are curious about how your business can benefit, please schedule a call today by clicking here.