Investment in energy infrastructure critical for Rhode Island

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Reliable, competitively priced energy is essential for economic growth. Unfortunately, New England had the highest natural gas prices in the country in 2013, the result of several related regional energy challenges that need to be addressed if we want to get serious about supporting a competitive business climate in this state.

First, there is not enough pipeline infrastructure to bring the plentiful supply of inexpensive natural gas from the Marcellus Shale in nearby Pennsylvania into New England to meet the growing regional demand. This constrained supply is most pronounced during the coldest winter days, when pipelines are at capacity to supply gas to heat homes, which takes priority over gas-fired electric generating plants, driving up the cost of both gas and electricity.

This dynamic played out last year on two occasions in Rhode Island, a five-day cold spell in January and the blizzard in February. ISO-New England, the nonprofit that operates the region’s electricity grid, had to call upon more expensive and dirty oil and coal generators to meet the region’s electricity demands, causing major winter price spikes and posing significant reliability challenges, since the electric grid is dependent on generators having enough natural gas to operate when needed.

This situation is exacerbated by New England’s significant and increasing dependence on natural gas to generate electricity. About 50 percent of the region’s electricity is generated with gas today, compared to only 5 percent in 1990 and 15 percent in 2000. This dependence is more pronounced in Rhode Island, where natural gas generates 98 percent of our electricity.

ISO-New England predicts that our reliance on natural gas will continue to grow as older coal, oil and nuclear-fueled generators are decommissioned and replaced with more efficient, low-carbon emitting natural gas plants. For example, the Vermont Yankee nuclear power plant is scheduled to shut down at the end of this year and the coal-fired Brayton Point Power Station will cease operations in 2017. The bottom line is that without additional pipeline capacity, natural gas will become even more expensive, and so will electricity, at a time when most of the country is enjoying lower gas prices.

Addressing these regional challenges requires a coordinated regional effort. That is why, in December 2013, Governor Lincoln Chafee joined with the all New England governors to create the Regional Energy Infrastructure Initiative to advance regional infrastructure investments and diversify our energy sources. Critical to the success of this initiative is participation by all New England states.

I fully support this initiative, and this past session I sponsored the Governor’s Affordable Clean Energy Solution Act, which facilitates Rhode Island’s participation in the regional initiative.

The Governor will host a ceremonial bill signing legislation on this and two other important energy bills on Friday at Slater Mill.

The legislation authorizes state agencies and National Grid to participate in regional, cost effective strategic investments in pipeline expansion that will increase natural gas supply into New England, reducing supply constraints and related price volatility. The legislation also allows us to explore opportunities to import Canadian hydropower, which will help diversify our energy portfolio and reduce Rhode Island’s dependence on natural gas. Quebec and Labrador generate tremendous amounts of clean, reliable and affordable hydropower. Strategic expansion of transmission lines from the north is needed to bring hydropower into southern New England. This low cost, environmentally friendly resource will push natural gas prices down.

This legislation does not commit the state to any infrastructure project or power purchase agreement; but rather establishes a framework for an open, competitive and transparent process to review and consider regional energy and infrastructure projects and contracts.

I want to stress that the legislation in no way undermines the General Assembly’s commitment to developing local renewable energy or energy efficiency programs. I am proud that Rhode Island is a leader in these areas, which support our state’s economy, create jobs and help meet our environmental goals. While the continued growth of local renewables and efficiency measures are part of the solution, they alone cannot fix the energy problems facing New England and Rhode Island. Stable, competitive energy pricing is critical to our economic growth and achievable only if we work collaboratively.

 

William A. Walaska represents District 30, Warwick, in the Rhode Island Senate.

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