“New England businesses and residents have almost spent as much money on power this winter than they did in all of 2012 combined.” – Hartford Business Journal 4/1/14
Energy prices exploded this winter and utility customers in New Hampshire and across the region are just beginning to feel the aftershocks in their monthly bills. As the Hartford Business Journal reported this week, “the cost of electricity was $5.1 billion in New England from December to February… By comparison, in 2012, the cost of electricity for all 12 months was $5.2 billion.” The winter wholesale price of gas increased four-fold over 2011/2012.
The regional grid operator, ISO-New England, attributes these sharp increases to the combination of “low temperatures, high demand for natural gas and constraints on natural gas pipelines.” Because natural gas runs so much of New England’s power generation, the price of that fuel is closely tied to the price of electricity. The lawmakers are probing into the price spikes.
The lights stayed on this winter largely because of the ISO’s “Winter Reliability Program.” Power plants that could burn oil (some of which hadn’t done so in a while) stocked up on fuel inventory and were able to run on oil when natural gas was either unavailable or too expensive. Over the course of the winter, these power plants had burned through most of the 3 million stockpiled barrels. Some generators, at one point, only had two days’ worth of oil left.
And even though this winter was tough to get through, ISO-NE told federal regulators this week that “unless the weather is mild, next winter will be more challenging…” This is because the Vermont Yankee and Salem Harbor power plants will be retired by then, with several more at risk of closing by 2020.
What can be done? ISO-NE is looking at a number of approaches including another Winter Reliability Program, market adjustments, and innovations in renewable energy. The six New England governors are trying to prompt the publically-funded development of new natural gas pipeline and transmission to connect the region with large-scale renewable sources. Developers are jumping in with proposals to build new projects that would rely on these customer subsidies. Smaller-scale renewable producers, meanwhile, are worried they’ll get lost in the shuffle.
Like we’ve been saying all winter – we need many solutions to bring stability and security to our energy market. This includes new natural gas pipeline and new sources of renewable energy that can ease the strain on the system and markets. But who will and should pay for these projects? Northern Pass, as proposed, is the only project in New England with a federally-approved funding agreement that does not rely on customer subsidy and would bring the benefits of jobs and tax revenue to New Hampshire communities.
(Below are the links referenced in this communication)
Winter’s energy costs exceed $5B
(Hartford Business Journal)
Monthly wholesale electricity prices and demand in New England
More calls made to learn about past winter’s energy price spike
(New Hampshire Union Leader)
Cold Weather Operations
(ISO New-England presentation to the Federal Energy Regulatory Commission)
Massachusetts not at end of wind energy pipeline