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Renewable-Energy Mandate Endangers Hydro Deal

Posted by Bob Rio on Jun 8, 2018 8:23:48 AM

Proposed legislation to increase the amount of renewable energy that electricity suppliers must purchase may jeopardize a recently announced project to bring more than 1,000 megawatts of clean electricity to Massachusetts from Hydro-Quebec.

HydroMore significantly, it would remove hydro power as a long-term potential source of clean energy for Massachusetts.

The recently announced hydro project, to be developed by the power company Avangrid, will begin moving hydro power to the commonwealth over a transmission line through western Maine by 2022. The development would curb greenhouse- gas emissions by substituting hydro power for electricity from fossil-fuel plants.

The Avangrid proposal has been championed by the Baker Administration and supported by AIM.

Final contracts are expected to be signed within the next several days. The project will then be filed with the Massachusetts Department of Public Utilities (DPU) to determine whether it is cost-effective for ratepayers.

But An Act to Increase Renewable Energy and Reduce High-cost Peak Hours (H.1747) and similar bills now being debated on Beacon Hill threaten approval of the Avangrid project because they focus only on renewable energy and penalize clean-energy sources like hydro power.

H.1747 was reported favorably by the House Committee on Telecommunication, Utilities and Energy Committee (TUE) last week.

H.1747 increases what is known as the renewable portfolio standard (RPS) – the amount renewable energy (primarily wind and solar) that electricity suppliers need to purchase to serve their electric load. The RPS for 2018 is 13 percent of a suppliers’ total electric load, increasing 1 percent per year.

H.1747 would increase that rate marginally for the next few years, then to 2 percent per year beginning in 2020 until it reaches 100 percent. Other proposals would increase it even faster.

Renewable Portfolio Standard Fact Sheet

Here’s the problem. Hydro power is not eligible for inclusion in the RPS under Massachusetts law. As the RPS mandate increases (along with other energy mandates) hydro power will at some point become ineligible to be sold in Massachusetts. Based upon AIM’s analysis of the small increases proposed in H.1747, hydro power could be out of the energy mix before the end of the proposed 20-year Avangrid contract term and well before the RPS approaches 100 percent.    

The result is that Massachusetts business and residential consumers will end up paying for hydro power they can’t use.  That conundrum could significantly impact the cost-effectiveness determination of the proposed hydro power contract.   

The bottom line is that any bill that raises the RPS will eliminate the possibility of the legislature adding more hydro power to our energy supply. That’s a shame because the amount of power Massachusetts needs to meet its clean-energy goals is immense. Shutting out hydro will add decades to the time frame needed to achieve those goals.

Why does H.1747 and similar legislation put all our energy needs in one basket - essentially offshore wind – when at least part of the solution is already built?

We cannot believe that it is the goal of the Legislature to close the door on any long-term, cost-effective contracts for hydro power beyond the current procurement while disrupting the current procurement from reaching its full potential. That is the net effect of raising the RPS.

We urge the House Ways and Means Committee to turn thumbs-down on this bill. It will not help us achieve our carbon goals.

Letter Opposing An Act to Increase Renewable Energy

Connect with Bob Rio on Twitter, @robertrioaim, or at rrio@aimnet.org

Topics: Energy, Environment, Electricity

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