Friday, June 13, 2008

Berkshire Eagle Editorial

This is my op-ed piece from June 13, 2008.

The Berkshire Eagle has editorialized a number of times in the past that the 1997 electricity deregulation legislation has been a failure. Nothing could be further from the truth. The legislation intended to lower the cost of energy, invest in renewable and clean energy resources, bolster the reliability of the state's electricity infrastructure, and strengthen consumer protection and education.

The Division of Energy Resources (DOER) estimates that Massachusetts consumers have saved $5 billion due to deregulation when compared to where prices would currently be had the state not implemented electricity restructuring. This amount couples the initial mandated 15% rate reduction for all customers plus the benefit of 9000 megawatts (MW) of new energy supply in the New England region that was encouraged by the move to retail market competition. This new capacity includes 450 projects in renewable energy and energy efficiency over the past ten years, funded by the Renewable Energy Trust Fund (RETF), an entity created in the 1997 legislation. These projects represent over 236.4 MW of renewable energy projects in Massachusetts, enough electricity to power 236,000 homes throughout the state each year. In addition to this direct investment in renewable energy, the restructuring act paved the way for energy efficiency and renewable energy to be introduced into active energy markets. This resulted in further investment in these energy sources, a decrease in the state’s reliability on fossil fuels, and reinforced the reliability of the entire grid.

In just the past decade, digital televisions, bigger homes with central air conditioning, faster computers, and all encompassing cell phones have changed the amount of electricity we consume. Demand for electricity in the New England region is rising at a 500MW per year rate. The restructuring act established strong consumer education and outreach mechanisms to help deal with this growth in demand. DOER and RETF have extensive public education platforms that they use to better educate consumers on their options for electricity service as well as state programs to increase energy efficiency and develop their own small scale renewable projects. In addition, the restructuring act requires electricity providers to ensure the transparency of the terms of service for each customer - allowing individual families and businesses to consider their levels of electricity consumption based on efficient and transparent information.

While electricity prices remain relatively high throughout the state, this is due much more to soaring prices of natural gas and oil - factors beyond individual state control - and the Commonwealth's lack of diversity in energy generation sources, than it is to the deregulation of the market. That being said, the state can and will do more. The restructuring act has saved ratepayers billions of dollars that would have otherwise been lost under a vertically integrated system. However, despite its success in doing so, the 1997 restructuring act was never meant to be a silver bullet for lowering energy costs – it was meant as a first step. Increasing reliability, educating ratepayers, lowering costs, and protecting our environment are all ongoing goals for energy policy in Massachusetts. The restructuring act was the successful beginning of a long process, one that has brought us to numerous clean energy legislative initiatives this session. We are building on the momentum of the 1997 legislation by instituting the Speaker's green energy bill, which will further bolster the clean energy industry by significantly increasing the amount of renewable energy and energy efficiency that electricity companies are required to provide to their customers. It also empowers individuals and businesses by strengthening consumer education and choice, through initiatives like the SMART meter pilot program and net metering. Furthermore, we are currently working on a green jobs bill that will parlay our continued emphasis on clean and renewable energy into good paying jobs for Massachusetts residents throughout the state. Had we not done the 1997 electricity restructuring act, there is no way that we would be on the cusp of the groundbreaking energy legislation that will be passed this session, reinforcing the Commonwealth's status as a world leader in creative and innovative public policy.