As time runs out, governor makes last drive for rules
Governor Deval Patrick is just 30 days from leaving office, but that hasn’t stopped his administration from making one last push to bring more Canadian hydropower to Massachusetts.
Patrick’s top environmental aides are working feverishly on new rules that could compel electric utilities to buy a certain amount of energy from Canada’s big hydro plants.
The governor’s administration wants to finish a draft of the new regulations by the end of the month. But with weeks running out before Patrick leaves office on Jan. 8, Governor-elect Charlie Baker’s administration will have the final say on whether to let those rules take effect.
The odd timing underscores how strongly Patrick and his aides believe in hydropower’s potential — both to help reach the state’s global warming reduction goals and to address concerns about the reliability of the electricity grid.
But these new rules also raise concerns about driving up the already expensive energy costs here, on top of existing requirements to buy escalating amounts of electricity from renewable sources.
“This is very late in the administration to be doing something like this,” said Robert Rio, senior vice president of government affairs at Associated Industries of Massachusetts. “The time frame is very short to be looking at a program that has huge implications. . . . I don’t think they want to look at the cost.”
With the details still in the works, it’s unclear what kind of extra costs the new rules would create. Hydropower is often considered to be a cheap form of energy, but it could cost billions of dollars to build a major dam in Canada and the power lines through northern New England needed to get that juice into Massachusetts.
The Patrick administration has been down this road before. Earlier this year, the governor tried unsuccessfully to shepherd a clean-energy bill — one that could push utilities into contracts for hydropower — through the state Legislature. That bill died when the buzzer ran out in July, a victim of competing interests and the legislation’s complexity. Lawmakers are planning to revive a version of the bill in early 2015, as the new legislative session begins.
Warnings from the region’s grid operator about a potential power shortfall, and the possibility of rolling blackouts as soon as 2016, have amped up the urgency for elected officials to bring new sources of electricity into New England.
Legislation is typically needed to compel utilities to enter into long-term contracts for hydropower and other forms of clean energy. But state officials can use regulations to require the companies to buy a certain amount of clean energy without a change in state law.
The Patrick administration’s latest proposal is part of its efforts to set the state on a path toward meeting its goals for greenhouse gas reductions — a 2008 state law calls for global warming gases to be reduced by 80 percent by 2050, from 1990 levels.
The “Clean Energy Standard,” as the proposed rules are being called, would set up a new system for credits that utilities and other suppliers of power would obtain by buying a certain amount of hydropower or other forms of clean energy.
David Cash, Patrick’s environmental protection commissioner, said the specific amount that utilities would need to buy hasn’t been set, but it will be tailored to help the state exceed the 80 percent goal. The proposal would expand on the state’s existing system that requires utilities to buy certificates from generators of renewable energy such as wind and solar power.
Only newer power plants would be eligible under Cash’s first sketch of the rules, but just how new is unclear.
Another unanswered question: whether sources that are not in areas adjacent to New England would qualify. Nalcor Energy, a provincially owned company in Newfoundland and Labrador, wants the definition expanded to include its hydroelectric projects.
Hydro-Quebec, another Canadian energy company, is also eager for hydropower-related credits to be created. But a spokesman for Hydro-Quebec said the new Massachusetts rules wouldn’t have a big impact without state legislation requiring utilities to enter into long-term contracts that could help with the financing of energy projects.
NStar parent company Northeast Utilities is already opposing the new rules. An NU executive sent a letter on Nov. 7 to the Patrick administration, saying the proposal would lead to a substantial increase in electricity bills. The new clean-energy standard, NU claims, duplicates several existing programs — the renewable energy credits and the Regional Greenhouse Gas Initiative, among others — that are adding $573 million to ratepayers’ energy costs in the state this year. In 2018, the extra costs could rise to as much as $1.1 billion.
“We’ve added multiple levels of regulatory mandates onto what should be a free market,” said Jim Bride, an energy tariff consultant in Cambridge.
Cash said new state regulations would eventually provide savings for consumers by helping to shield them from the volatility of fossil fuel markets. (That volatility, for example, is a driving force behind double-digit increases that consumers are seeing on their electric bills this winter.) “It will suppress prices in the long run,” Cash said.
But the Conservation Law Foundation argues that hydropower’s negative consequences — the loss of trees from flooding, the release of carbon dioxide from decomposing materials during the raising, and lowering of water levels — need to be taken into account.
“We’re looking presumably at Hydro-Quebec, which is not in need of a handout from the state of Massachusetts in order for it to further develop its hydroelectricity,” said Greg Cunningham, a senior attorney at CLF. “It’s, in essence, a windfall. You’re paying somebody to do something they would be doing anyway.”
CLF sued the state in August, alleging that the administration has failed to meet key requirements in the 2008 global warming law. Cunningham said the regulations, as Cash proposes them, aren’t broad enough to meet CLF’s demands in that case.
The governor-elect has been public in his support of efforts to bring more Canadian hydropower into Massachusetts, but it’s unclear how Baker will respond to the Patrick administration’s proposal.
A spokesman said Baker will wait until he takes office to make decisions about energy policy.
“It’s useful input for the new administration, (but) I don’t think they have their hands tied in any way,” said Peter Rothstein, president of the New England Clean Energy Council. “I think the regs will be a piece of the discussion. It’s not the whole answer.”