Guest column: Renewable energy jolts consumers' budgets
In June, the Fiscal Alliance Foundation released a new study examining energy prices in Massachusetts and New England. The study was authored by Lisa Linowes, a co-author of this piece, who is an energy policy expert with a focus on the costs and deployment of large-scale renewable energy.
The study found that while New England has experienced an 11.4% drop in annual energy demand from 2008 to 2020, New Englanders pay 20% more on average for each kilowatt hour of electricity delivered to their homes. The majority of this increase is due to the myriad renewable mandates that have been imposed by New England states in this period.
New England’s renewable energy mandates represent some of the most complex and costly in the entire country. While all of New England is on one electrical grid, 26 separate programs are active across the six states, with nine in Massachusetts alone. Each covers different technologies with different annual compliance requirements and costs.
Entities that sell electricity retail in New England are obligated to satisfy the mandates in every state where their electricity is sold. The annual cost of Massachusetts renewable energy policies has quadrupled in 10 years, from $250 million in 2011 to $1 billion in 2020.
Cumulatively, this has cost Massachusetts ratepayers $6 billion in increased electricity prices in that period. In 2020 alone, Massachusetts ratepayers were billed an average of $1 billion for the state's Renewable Portfolio Standards policies, which works out to between 2 cents and 3 cents per kilowatt hour of electricity consumed. Given an average monthly consumption of electricity of 600 kilowatt hours per household, the RPS costs each ratepayer as much as $191 a year.
The Regional Greenhouse Gas Initiative has cost ratepayers in the participating states $3.8 billion in higher electricity rates in the period from 2008 to 2020. Fifty-three percent of the cumulative RGGI funds raised went toward energy efficiency programs; however, limited data are available to validate the corresponding cost savings and avoided emissions. For projects where information is available, it appears the cost per carbon ton avoided is significantly higher than the value of the allowances sold, suggesting that RGGI is an inefficient use of resources.
If the region’s climate policies are followed to their expected conclusion of zero emission energy, it will require substantially more ratepayer support and more land and ocean development to accommodate the wind, solar and transmission infrastructure needed within New England. Yet reporting on these impacts is generally limited, and where available it’s often difficult for the public to follow. It is crucial for all, particularly the ratepayers who are shouldering the brunt of the costs, to be engaged in an honest and informed debate about the region’s energy future.
Ratepayers in New England have for decades been told that emission-free electricity will lower costs and benefit the environment. In fact, under the current energy policies, New Englanders will continue to see rate increases that will fund the industrialization of the region’s rich natural areas both on- and offshore.
As renewable energy and climate policy requirements expand, the costs for ratepayers will necessarily increase. This outcome suggests that the promise of alternative energies lowering and stabilizing rates has not been realized. Lawmakers in all six New England states would be wise to heed this warning and give greater consideration to those being forced to shoulder these enormous energy cost increases as they consider energy policies in the future.
Massachusetts cannot be economically competitive until energy prices go down. There needs to be more focus on the price for the ratepayer, instead of picking winners and losers in the energy market.
To see the full study, along with the brief executive summary, visit www.FiscalAllianceFoundation.org.
Lisa Linowes is an energy policy expert with a focus on the costs and deployment of large-scale renewable energy. Laurie Belsito is the policy director for the Fiscal Alliance Foundation.
This article originally appeared on Telegram & Gazette: Renewable energy in New England costs more for consumers annually
