Price increases in New England energy markets are far outpacing demand for electricity, according to a report released Wednesday by the Massachusetts-based Fiscal Alliance Foundation.
The study, authored by energy policy expert Lisa Linowes, examined the relationship between energy prices and energy demand from 2008 and 2020.
Despite an 11.4 percent decrease in annual energy demand between 2008 and 2020, Linowes found New Englanders are now paying 20 percent more for each kilowatt hour of electricity, with the most profound impact observed in Massachusetts.
The report indicates that increasing subsidies for solar and wind energy, renewable energy regulations, and climate policy mandates are increasing electricity prices for consumers.
Linowes argues that, contrary to some economic predictions, alternative energy sources have not led to a stabilization or reduction in rates.
“New England has experienced a decline in energy demand over the past decade, yet the region’s residents continue to pay higher prices for electricity,” the report states. “This is due in large part to state energy policies.”
Linowes is an expert in energy policy who has previously testified to Congress and currently serves as the Executive Director of Wind Action.
New England’s renewable energy mandates have introduced 26 distinct programs across its six states. These policies come with unique annual compliance requirements and costs, influencing entities that retail electricity in the region.
“Over the past decade, the annual cost of Massachusetts’ renewable energy policies has quadrupled, escalating from $250 million in 2011 to $1 billion in 2020,” Linowes said in a press release.
This significant increase has led to a cumulative cost of $6 billion for Massachusetts ratepayers, she said, adding an annual burden of up to $191 per household due to the Renewable Portfolio Standards (RPS) policies.
At the same time, the Regional Greenhouse Gas Initiative (RGGI) has led to $3.8 billion in increased electricity rates from 2008 to 2020. While over half of the RGGI funds have been invested in energy efficiency programs, limited data is available to confirm the savings and emissions reduction impact.
The report does say that Maine has the most wind power of all New England states, with 1,000 MW capacity compared to New Hampshire’s 210 MW capacity.
However, because of RPS and RGGI, most of the so-called Renewable Energy Credits (RECs) from Maine’s wind projects are sold into other New England states, meaning those projects do not contribute to Maine’s emission reduction goals.
RPS and RGGI have also raised electricity prices in Maine, though less so than in other states.
“By 2020, the six New England states and New York had the highest electricity prices in the U.S., behind Hawaii, with each experiencing increases in the last
decade that ranged from a low of 5 percent (Maine) to over 20 percent (Massachusetts and Rhode Island),” the report states. “While not all price increases can be attributed to RGGI, the cost of RGGI allowances is added to wholesale electricity prices and passed on to ratepayers.”
In addition to cost increases from RPS and RGGI, Maine ratepayers will also soon begin paying the higher costs of a 2019 decision to subsidize large solar facilities.
The Office of Public Advocate has estimated that those costs will amount to more than $220 million by 2025.
Like with RGGI and RPS, limited data is available to assess how much Maine has reduced its carbon emissions because of community solar and other expensive energy policies.
Read the full report here:
