New England state renewable energy mandates will double energy costs, cause rolling blackouts, while NH policies reduce regional costs

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With New England state governments committed to reducing their carbon emissions at least 80% by 2050, residents and businesses can expect electricity rates to double, along with rolling blackouts, according to a new joint report completed by several of the region’s leading think tanks. The study concludes that weather dependent “renewable” energies — like wind and solar — simply cannot meet regional demands for electricity.

The report, “The Staggering Costs of New England’s Green Energy Policies,” was commissioned by the Americans for Prosperity Foundation, the Josiah Bartlett Center for Public Policy in New Hampshire, the Ethan Allen Institute in Vermont, the Fiscal Alliance Foundation in Massachusetts, the Maine Policy Institute, the Rhode Island Center for Freedom, and Prosperity, and Yankee Institute in Connecticut. The report was conducted by Always on Energy Research (AOER), a research organization dedicated to ensuring that every state in America has affordable, reliable energy. 

“Compliance with the New England Decarbonization Plans would cost $815 billion through 2050,” the report concludes. “New England families would see their electric bills increase by an average of $99 per year. Commercial businesses would see their costs increase by $489 per year. Industrial (manufacturing) customers would see their electric bills increase by an average of almost $5,280 per year.” 

The report shows that on a per-capita basis, the cumulative cost of the plans increases expenses for each person in New England by an additional $2,061 in 2030, $15,552 in 2040, and an additional $51,914 in 2050. All these increases will make New England less affordable.

As the only New England state that doesn’t impose unrealistic electrification mandates for transportation and home heating, New Hampshire offers the only bright spot in the study.

“New Hampshire’s energy policies produce substantial benefits for the entire ISO-NE region,” the study concludes. “The Granite State’s lack of electrification mandates for transportation and home heating reduces the projected peak system demand from 57 GW to 52.5 GW, and the continued use of natural gas provides critical dispatchable capacity for the system, allowing it to perform better during periods of low wind and solar output.”

“New Hampshire’s current energy policies would save all New Englanders $56.5 billion during the time period studied,” the report finds.

Although the organizations that commissioned the study support the goal of achieving a cleaner environment, the report finds that switching primarily to weather dependent “renewable” energy is not entirely feasible for the electrical grid of ISO-New England — an independent, not-for-profit corporation responsible for keeping electricity flowing across the six New England states. 

The study concludes that ISO-New England may be unable to coordinate electricity to power the region within 11 years, warning that “[i]f each of the New England states adheres to the same renewable-intensive path, a blackout scenario could be dire indeed.”

According to the study, powering New England without interruption during a year in which wind and sunshine are plentiful would require 225 gigawatts (GW) of renewables — or equivalent to power generated by 12,000 wind turbines and 129 million solar panels. Even more renewables would be required to power New England in a less sunny or windy year.

New England is responsible for less than 0.4% of global emissions; it is unclear just how much cleaner the environment will become in exchange for the costs that have been imposed on the region and its people.

Ultimately, the report finds that the cost of reducing carbon dioxide emissions under these plans exceeds the benefits of doing so, especially because in many cases, “green” policies have been enacted without any effort to quantify the environmental benefits they will secure. This raises the very real possibility that New England states are imposing net harm on their economies by imposing policies whose costs outweigh their benefits.

Policy Recommendations

1. Reconsider emission-reductions goals in the context of affordability and reliability of electricity. Legislators should prioritize affordability and reliability before emissions reductions goals. If emissions reduction goals cannot be reduced without compromising affordability and/or reliability of electricity, they should be abandoned.

2. Lift state nuclear moratoriums. Lifting moratoriums and impediments to building new nuclear power generators will be the most reliable and affordable way to decarbonize the New England grid. Connecticut, Maine, Massachusetts, Rhode Island and Vermont each have substantial barriers to nuclear energy.

3. Purchase Power Agreement transparency. Any state that mandates contracts for certain types of energy should clearly detail the cost of those contracts for the public. These reports should provide ratepayers with the expected increases (or decreases) in their monthly bills.

4. Allow nuclear to compete with renewables. Net Zero mandates treat renewable energy as more desirable than nuclear energy, despite both producing no carbon emissions. Allowing nuclear energy to be included toward meeting mandates will lower the costs for businesses and households.

5. Require investment fee reporting. Mandatory reporting of investment fees for state governments will allow for more transparency around the cost and benefit of generally higher-risk alternative investments like private equity and hedge funds, which are often used for ESG investments.

To read the full paper, click here: ISO-NE-r4c (final).

About the Authors

Always On Energy Research (AOER) believes every resident in every state has the right to know how much energy policy passed at local, state, and federal levels will cost them in terms of standard of living, including monetary and reliability.

At Americans for Prosperity Foundation, we empower and educate Americans on the proven and principled solutions to our country’s most challenging issues. We believe in people. When Americans have freedom and opportunity, they can achieve extraordinary things. Through education, research, and community engagement we can empower Americans to achieve their full potential.

The mission of the Josiah Bartlett Center for Public Policy is to develop and advance practical, free-market policies that promote prosperity and opportunity for all.

The Ethan Allen Institute’s mission is to influence public policy in Vermont by helping its people to better understand and put into practice the fundamentals of a free society: individual liberty, private property, competitive free enterprise, limited and frugal government, strong local communities and personal responsibility.

Maine Policy Institute is a nonprofit, nonpartisan organization that works to expand individual liberty and economic freedom in Maine. Maine Policy is the strongest voice in Augusta for taxpayers and believes in an open, transparent, and accountable state government.

Fiscal Alliance Foundation in Massachusetts promotes individual liberty and greater fiscal responsibility and transparency in government for a better New England, through education and legal assistance.

The Rhode Island Center for Freedom and Prosperity is dedicated to providing concerned citizens, the media, and public officials in Rhode Island with empirical research data, while also advancing market-based solutions to major public policy issues in the state.

Yankee Institute is the eyes, ears and voice for hard-working people who want a prosperous Connecticut. Our common-sense solutions drive positive legislative results to strengthen our communities and build a vibrant, hopeful future.

QUOTE from AOER:

“The six ISO-NE states are not the only ones grappling with the economically devastating costs and reliability challenges associated with decarbonization goals. Similar issues are emerging in other states, creating a divide between energy ‘haves’ and ‘have nots.’ Our research suggests that the ISO-NE states are likely to fall into the ‘have nots’ category. The positive takeaway is they have the opportunity to change course by revising their energy policies while still maintaining a clean, healthy environment.”

Quote from Josiah Bartlett Center President Drew Cline:

“One of the few bright spots in our study is found in the reliability and cost savings created by New Hampshire’s refusal to impose the most burdensome renewable energy mandates. New Hampshire has shown the rest of New England the value of prioritizing cost and reliability. The clear path forward is for the other New England states to follow New Hampshire’s lead.”

Quote from Maine Policy Institute CEO Matthew Gagnon:

“It’s time for policymakers in Maine and the region to understand there are real human and economic costs to their renewable energy agenda. For a state like Maine, in a region like New England, it simply does not make sense to continue down this path when we account for such a minuscule amount of greenhouse gas emissions. Doing so will cause serious hardship for working families and make our regional grid far less reliable.”

Quote from Ethan Allen Institute’s David Flemming:

“For the past decade, Vermont has passed successively more stringent laws and regulations regarding how electricity can be generated. Ten years ago, the Legislature shut down the Vermont Yankee nuclear plant, which had been responsible for generating three-quarters of Vermont’s in-state generated electricity, all with zero carbon emissions. Vermont now generates less than half of the electricity that it did a decade ago.

Since then, despite millions in wind and solar subsidies to favored companies, Vermont produced only 15% more wind and solar powered in-state generated electricity in 2024 than in 2014. At this rate, it would take over 140 years for Vermont to build enough in-state wind and solar generated electricity to replace the nuclear-generated electricity lost. Wind and solar are simply not affordable and reliable options. With over 170,000 households relying on electricity to power their furnaces, Vermont can ill afford to double down on a failing electricity generation strategy that places thousands at risk of losing electricity during the cold winter months.”

Quote from Yankee Institute Communications Specialist, Andy Fowler:

“It costs more for Connecticut families and businesses to turn their lights on than almost anywhere else in the country. Instead of finding new ways to bring massive amounts of energy onto the grid, lawmakers want it to be 100 percent carbon-free by 2040. A new study, supported by Yankee Institute and other leading state policy organizations, demonstrates that this massive “renewable” overhaul will cost Connecticut residents billions of dollars and be more prone to rolling blackouts while only cutting global carbon emissions by a fraction of a percent. It begs the question, why? Why should we accept a lower quality of life? We can do better. We can grow our economy, improve the environment, and avoid a future when ‘turning on a light’ could be unreliable.”

Quote from Ross Connolly, Northeast Regional Director, Americans for Prosperity Foundation

“Affordable, reliable energy is essential for human well-being.  To ensure New Englanders can maintain and expand well-being all energy solutions should be on the table.  We cannot continue going down the route of picking winners and losers in energy markets. Policymakers should be focused on true progress for their constituents, a future that unleashes American energy abundance to benefit all.  By creating an equal playing field and pursuing diverse energy innovations- whether nuclear, natural gas, or something yet to be discovered- we empower humanity to meet growing demands and set America up for success in the next century.”

Quote from Mike Stenhouse, CEO, Rhode Island Center for Freedom & Prosperity

“The government’s assault on Rhode Island families continues as politicians have recklessly placed our state on a path where residents may soon fear ‘freezing in the dark.’ As our report illustrates, without any cost-benefit analysis or planning to expand our electric grid’s capacity, lawmakers are creating a major self-inflicted crisis. Their reckless zeal to follow a false narrative knows no bounds. This report must serve as a wake-up call to all lawmakers: Ocean State families require a more reasonable energy strategy.”

Quote from Paul Craney, spokesman for the Fiscal Alliance Foundation of Massachusetts:

“New England states should view Massachusetts as a cautionary tale for what not to do with energy policy. The study shows that by 2050, every single person in New England will have paid over $51,000 for these policies. For residents of Massachusetts, we can expect to pay even more. Massachusetts lawmakers have passed overzealous and unattainable, weather dependent renewable energy policies that will hurt, not help, the residents of their state. These policies will also burden surrounding states that share our grid with crippling costs and blackout conditions. This isn’t fear mongering, this is future reality under our current laws. Course correction must be addressed swiftly.

If Massachusetts persists in relying solely on weather-dependent energy sources like solar, wind, and batteries, residents can expect soaring energy costs and the looming threat of rolling blackouts. The outlook is grim for the working people and businesses of our state alike, but entirely avoidable with the right policy changes.”

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Populist policy solutions to empower outsiders

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In the United States and across the globe, a stark political divide has emerged not between left and right, but between outsiders and insiders.

To a large extent, the 2024 election reflects an outsider revolt against elite misuse of institutions. Analysts and writers on both the left and the right have noticed this, though they don’t always read the results the same way. 

Left-wing writer Jeet Heer of The Nation headed down the right path, even if he missed the destination, when he wrote last week:

“The key to understanding the Trump era is that the real divide in America is not between left and right but between pro-system and anti-system politics. Pro-system politics is the bipartisan consensus of establishment Democrats and Republicans: It’s the politics of NATO and other military alliances, of trade agreements, and of deference to economists (as when they say that price gouging isn’t the cause of inflation). Trump stands for no fixed ideology but rather a general thumbing of the nose at this consensus. The main fact of American politics in the post-Obama era is that an ever larger majority of Americans are angry at the status quo and open to anti-system politics.”

That’s not quite right. Voters are angry at the status quo, but they have not turned against “systems” per se. No one’s calling to abolish the Catholic Church, the International Committee of the Red Cross, professional sports leagues, the Salvation Army, Rotary International, 10-minute oil changes, community college, municipal trash collection or the International Fertilizer Development Center.

Voters have turned against elite misuse of powerful institutions, particularly government institutions, to exclude non-elites and impose elite values and decisions on others collectively.

The signs of this have been growing for years. Chapman University in California conducts a Survey of American Fears to catalogue what Americans fear most. The latest survey, from 2022, found that Americans most fear “corrupt government officials.” 

Nearly 2/3 of Americans (62%) said they were afraid or very afraid of corrupt government officials. Another 25.4% said they were slightly afraid. Only 12.5% said they had no fear of corrupt government officials. While 37% said they were very afraid of corrupt government officials, only 16% were very afraid of climate change affecting where they live. (Just 6% were afraid of zombies.) 

If Americans most fear abuse at the hands of government officials, imagine how concerned residents of the “live free or die” state must be.

Collapsing trust in elites and powerful institutions leads to populist efforts to weaken or control (or both) those institutions. 

That loss of trust is a terrible development. But new leaders can restore trust lost by previous leaders. The new governing majority in New Hampshire has a golden opportunity to begin to restore that trust.

How? The wrong way would be to use government power to lock in a different set of controls that create different sets of insiders and outsiders. Voters want to restore the principle of institutional neutrality. They want government to treat everyone equally and stop “picking winners and losers,” as the common phrase goes.

In New Hampshire, policymakers can restore trust by removing institutional rules that create insiders and outsiders where none need exist, or that erect unnecessary barriers that make it harder for outsiders to choose their own path in life.

The best opportunities to return power to individual Granite Staters come with these five steps:

  1. Reduce state and local land use and development regulations. Our 2021 study of local land use regulations showed that New Hampshire is more heavily regulated in this category than most other states. Regulations that needlessly restrict development are not only the primary cause of the state’s housing shortage, but they prevent developers from creating the kind of communities people prefer, price lower-income families out of neighborhoods and communities, worsen labor shortages, and generally replace individual preferences with choices made by small groups of insiders.
  2. Increase access to educational options. Nearly everyone agrees that a child’s zip code shouldn’t determine his or her educational opportunity. Our current public education structure locks children in to a boundary-based model that creates insiders and outsiders by its very design. Education Freedom Accounts (EFAs), universal open enrollment and charter schools eliminate that structural flaw. Curiously, news reports on Education Freedom Accounts continue to omit the fact that EFAs can be used to attend public schools. Only by empowering families to shop for an education can we generate the public education improvements parents have demanded for decades.
  3. Reduce regulatory burdens on businesses and entrepreneurs. Making it harder and more expensive to start and operate a business hurts outsiders and protects larger businesses. New Hampshire has too many state and local regulations that raise barriers to entry, increase costs and create public “protections” that no one even needs. Entrepreneurship is one of the most important paths to prosperity. In New Hampshire, starting and running a business should be easier than anywhere else on earth. Right now, we’re not even close.
  4. Roll back overly burdensome environmental regulations. Protecting land, water and air is a legitimate role of government. Doing it the wrong way is costly and counterproductive. When regulations become absurdly complicated or expensive, they suppress economic growth, which is harmful because economic growth benefits everyone. New Hampshire can streamline its permitting processes and reduce its regulatory regime in ways that will improve economic outcomes while maintaining essential protections. In this category, renewable energy mandates are entirely unnecessary and should be repealed altogether. Restrictions on building energy infrastructure also need to go.
  5. Reform occupational licensing. Gov. Sununu and the Legislature made real progress on this in the last legislative session, but much work remains. New Hampshire continues to place too many regulatory obstacles in the way of individuals who want to enter dozens of career pathways.

New Hampshire is layered with rules that replace property rights and individual autonomy with decisions made by small groups of elites. Voters have indicated a strong preference for removing such restraints.

State and local policymakers have a rare opportunity to deliver real reforms that constrain government and empower individuals, rather than the other way around. Failure to deliver such reforms would risk further alienating voters and eroding trust in government.

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How one New England gas terminal exposes terrible U.S. energy policies

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Travis Fisher and Josh Loucks of the Cato Institute this week used New England’s reliance on imported natural gas to show how bad U.S. energy policies hurt Americans. It’s so dumb, the only explanation is “government.”

“Just north of Boston in Everett, Massachusetts sits the poster child for irrational energy permitting in the United States. The Everett Marine Terminal is a facility that connects imported liquefied natural gas (LNG)—often from Trinidad, more than 2,200 miles away—to natural gas delivery networks in New England. This is an absurd outcome for at least three reasons:

  1. New England demands natural gas, which generated 55 percent of the electricity on the New England power grid in 2023 and heats about half of the homes in Massachusetts,
  2. Abundant natural gas resources are being developed nearby. However, states like New York can abuse environmental statutes like the Clean Water Act to block any new pipeline that would move shale gas to New England. The Marcellus shale gas play (the most productive formation in the country) extends through Pennsylvania into New York, which shares a long border with Massachusetts, and
  3. Even if no new pipelines were built through New York state from Pennsylvania to Massachusetts, several American LNG export terminals (in Maryland, Georgia, Louisiana, and Texas) could supply New England if not for arcane laws like the Jones Act. As my Cato colleague Colin Grabow explains, the Jones Act “restricts domestic shipping to vessels that are US-flagged, built, owned, and crewed,” which effectively bans LNG shipments between US ports.”

Yes, New England imports natural gas from thousands of miles across the Atlantic because state and federal policies make it so difficult to move it from places like Pennsylvania, Texas or Louisiana to New England.

Sometimes it’s cheaper and more efficient to import products from far away rather than produce them at home. That is not the case here. The foreign imports are a result of government prohibitions or restrictions on domestic imports.

That’s just one of many results of dumb energy policies created by politicians intent on preventing markets from working. For more harmful policies, read the whole piece here.

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Lawmakers consider a state subsidy for EVs as prices approach parity with conventional cars

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Enticing people to buy electric vehicles does not fit comfortably into the core duties of state government. And yet it’s among the list of pet causes legislators will consider subsidizing with other people’s money. 

The latest effort comes in House Bill 1472. The bill, as amended, would confiscate $1.5 million that belongs to electric utility ratepayers in New Hampshire and give it to people who buy or lease electric vehicles. The money would come from Regional Greenhouse Gas Initiative (RGGI) funds currently rebated to ratepayers. 

The bill would facilitate this wealth transfer by creating a program through which EV buyers could claim rebates of $2,000 per fully electric vehicle and $1,000 per plug-in hybrid vehicle. Eligible vehicle sticker prices would be capped at $50,000 for cars and $80,000 for trucks, SUVs or commercial vans. 

Rebates would be available to individuals making no more than $75,000 a year, heads of household making no more than $112,500, and married couples making no more than $150,00 a year. The median household income in New Hampshire, according to the U.S. Census Bureau, is $90,845. So HB 1472 would create a program through which moderate-and lower-income Granite Staters subsidize pricier-than-average car purchases for higher-income households. 

The idea behind this subsidy plan, as with most subsidies, is to use some people’s money to manipulate other people’s behavior. The beneficiary group in this case is middle-income car buyers. The victim group is everyone who uses electricity. To give middle-income car buyers up to $2,000 toward the purchase of a car that runs on electricity (mostly generated by nuclear fission or natural gas in New Hampshire), the scheme takes about $2 per year from the average residential electricity user. 

If timing is everything, then this bill is a party guest who arrives not three hours—but three years— late. The wealth transfer scheme comes amid a rapid decline in EV prices. 

Cox Automotive and Kelly Blue Book reported this month that EV prices fell 10.3% between January of 2023 and January of 2024. Prices for the Tesla Model Y, the best-selling EV in America, fell by 21% last year, from $63,000 to less than $50,000. 

EV prices are rapidly approaching price parity with conventional gas-powered vehicles. The price gap between EVs and conventional vehicles fell from 15% in 2022 to 8% in 2023 to just 4% at the start of 2024, according to industry news site CarEdge. At this rate, average EV prices could reach parity with conventional vehicle prices this year, which undermines any argument in favor of a subsidy. 

Federal subsidies and policies so distorted the EV market that automakers have built far more electric cars than consumers wanted. Though demand for EVs is rising, supply has risen far faster, leading manufacturers to slash prices to move excess inventory. Pushed to generate more EVs than consumers want at the moment, auto makers are losing billions of dollars on these government-favored vehicles. 

“Buyers looking to get a bargain on a new car might want to consider an electric vehicle,” The Wall Street Journal wrote in a news story on EV prices last November.

As a JD Power auto analyst explained to Newsweek in December: “Eventually manufacturers will achieve scale and profitability, but they are being pressured to accelerate the production of EVs at an unnatural rate due to various government initiatives.”

This is a cautionary tale about the unintended consequences of market manipulation. As lawmakers consider proposals to add a state subsidy for EVs, and subsidize other favored products or activities, it’s one worth heeding. 

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The Burgess backfire

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In its annual report to the Public Utilities Commission last year, Burgess Biopower outlined its numerous efforts to provide financial security by diversifying its revenue base.

Burgess pursued other regional economic development projects to reduce and offset the costs of Burgess’ power, such as co-development of a number of suitable businesses including a greenhouse, a data center, and a cryptocurrency mining operation; location of an on-site energy generation system using landfill gas; working with the City of Berlin on a waste heat recovery and municipal snowmelt project; and development of ground-mounted solar resources.

The common denominator among all potential co-location partners is simple: no one is willing to put capital at risk to develop a project which relies on a power plant with an uncertain future.

The word choice in the last line is interesting. No company has a certain future. What Burgess lacked wasn’t certainty, but reasonable probability of success.

This is every company’s problem at the start. Burgess tried to solve it by playing politics. It isn’t entirely to blame. The State of New Hampshire encouraged it to do this. 

New Hampshire mandates that electricity providers buy a certain percentage of their power from “renewable resources.” This gave Burgess an opening. If it built a wood-fueled power plant, it could sell power at above-market rates to electricity producers compelled by the state to buy from companies that generated power from politically favored fuels. 

The problem with building a business model on what amounts to a government subsidy is that one’s survival depends on favorable treatment by politicians. That’s never a good place to be.

Burgess wound up with a worse deal than it had initially anticipated. After ratepayers had been forced to pay it $100 million above market rates for electricity, any future payments above the market price had to be refunded. It hit that cap years earlier than expected, thanks to technological advances that lowered the price of natural gas. It then exceeded the cap, necessitating repayments to ratepayers, which it could hardly afford. 

Its business model busted, it seemed only a matter of time until it found other sources of revenue or collapsed. Except, there was a third option. Convince legislators to pass a law forgiving its debt to ratepayers. Ongoing subsidies would be nice too. 

On Thursday, legislators failed to override Gov. Chris Sununu’s veto of House Bill 142, a last ditch political bailout for the unprofitable plant. If the company can’t figure out how to balance the books with money from people who pay it willingly, it looks like curtains. 

With so much trouble raising capital, maybe Burgess just needs a law requiring investors to fund it. Maybe, to keep the plant open, the Legislature could mandate that every retirement fund doing business in New Hampshire “invest” in the financially struggling plant. 

Why not? After all, it would “create jobs.”

If you can see the flaws in such a scheme, then it should be equally obvious why ratepayer subsidies were unjustified. Neither investors nor ratepayers should be forced against their will to support a politically preferred business. 

What about the benefits, though?

Burgess and its supporters claimed that paying more money for energy produced by burning wood made Granite Staters better off. But increasing numbers of academics who study such things conclude that biomass is not a net benefit for people or the planet.

A professor at Harvard’s Chan School of Public Health wrote last year that “air pollution from burning biomass can cause asthma exacerbations, hospitalizations for heart attack and respiratory disease, birth defects, neurodegenerative diseases and death, among many other health impacts.”

His research found that “burning biomass in buildings, industry, and power plants leads to more deaths than conventional coal-fired power plants.”

Britain’s left-wing Guardian newspaper reported in 2017 that the UK’s top climate researchers were turning against burning wood for power. 

“But burning wood to produce electricity is a relatively inefficient process. In generating exactly the same amount of electricity, wood will release four times as much carbon into the atmosphere as gas would do, and one and half times as much as coal. In addition, energy is used in harvesting and transport while vast stretches of land are needed to create the forests to supply generating stations with the wood they need.”

It’s conceivable that the scheme to subsidize Burgess not only cost ratepayers north of $200 million, but also caused health problems and lowered life expectancy among the hard-working folks of the North Country—the very people it was intended to help.

The alleged economic benefits we addressed here.

Wasting people’s money on a project that probably doesn’t bring the claimed benefits, and possibly causes harm instead, is a “green energy” story being told over and over again. And because it’s being told about projects that government compels people to fund, it’s causing substantial political backlash. 

Ford Executive Chairman Bill Ford put it this way in a recent interview:

“Blue states say EVs are great and we need to adopt them as soon as possible for climate reasons. Some of the red states say this is just like the vaccine, and it’s being shoved down our throat by the government, and we don’t want it. I never thought I would see the day when our products were so heavily politicized, but they are.” 

Boy are they. Researchers at Berkeley published a paper this month in which they found “a strong and enduring correlation between political ideology and U.S. EV adoption. During our time period about half of all EVs went to the 10% most Democratic counties, and about one-third went to the top 5%. There is relatively little evidence that this correlation has decreased over time, and even some specifications that point to increasing correlation. The results suggests that it may be harder than previously believed to reach high levels of U.S. EV adoption.”

Politicizing the transition to alternative energy has produced, predictably, a big backlash. It’s turned what might have been a slowly growing consensus into a rapidly growing divide.

New Hampshire’s complicated scheme to compel people to fund a power plant they would not otherwise voluntarily support might have done more than waste hundreds of millions of dollars (and possibly worsen health outcomes in the North Country). It might also have delayed the transition to alternative energy by needlessly politicizing the issue. It’s a cautionary tale. 

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Would you spend $150 million to subsidize a Dunkin’ franchise? How about an unprofitable power plant?

How would you feel about being taxed to support a failing business in a city on the other side of the state?

If you’d be fine with that, well, good news!

Under the guise of promoting “renewable energy,” many Granite Staters are subsidizing a single business in Berlin. That subsidy could come to an end this year, depending on how the governor responds to a bill now on his desk.

The business in question is the Burgess Biopower plant, which is not actually a viable power plant. Rather, it’s a subsidized jobs program for the Northern New England timber industry, disguised as a power plant.

Burning wood is an inefficient and expensive way to generate electricity. Natural gas, more energy dense than wood, is a better fuel source, which is why natural gas accounts for 40% of U.S. electricity generation while biomass accounts for just 1.3%. (Nuclear is also better.)

Electric utilities generally don’t buy power generated from wood, and most people no longer heat with wood. What to do with low-grade wood products, then? Politicians had an idea. Rig the market to favor this inefficient fuel source (and others).

In New Hampshire, politicians years ago came up with a scheme to transfer cash from Granite State residents to politically favored energy interests, including the timber industry. The plan was to make utilities buy power from “renewable” sources, regardless of cost. The state would create an artificial market for “renewable” energy by compelling utilities to buy from a list of government-approved energy sources. Among them was biomass.

In 2006, Gov. John Lynch pushed for a law requiring 25% of the state’s energy to come from “renewable” sources by 2025. In 2007, the Legislature passed and Gov. Lynch enthusiastically signed a Renewable Portfolio Standard law requiring electricity providers to purchase power from “renewable” resources in increasing percentages through 2025, or purchase certificates representing renewable energy generated from an approved source.

This law prompted the state’s largest utility, Public Service of New Hampshire (PSNH, now Eversource) to pursue a deal to buy electricity from qualifying sources, event at above-market rates. 

In 2011, PSNH petitioned the state’s Public Utilities Commission to approve a power purchase agreement the utility had signed with a company that promised to build a biomass power plant in Berlin. 

The first point in PSNH’s petition to the PUC was that the purchase agreement would help the utility satisfy the RPS mandates. 

“Pursuant to RSA Chapter 362-F, the Electric Renewable Portfolio Standard (“RPS”), PSNH must obtain and retire certificates (“RECs”) sufficient in number and class type to meet or exceed specified annual percentages of total megawatt-hours of electricity supplied by it to its Energy Service customers. To partially comply with this statutory requirement, PSNH has entered into a Power Purchase Agreement (“PPA”) with LLB regarding LLB’s proposed 70 MW (gross) biomass fueled generating station in Berlin, New Hampshire (the “Project”), to purchase the RECs produced by the Project, as well as the energy and capacity produced from the Project.”

The PUC approved the agreement, despite projections that it would cost ratepayers $125 million more than they would otherwise pay for power, and despite objections from the state’s Office of Consumer Advocate. 

Ratepayers’ above-market costs were supposed to have been capped at $100 million. In 2018, legislators passed and Gov. Chris Sununu signed a law that suspended the cap for three years. Ratepayer overpayments exceeded the $100 million cap in 2019. At the end of the suspension, Burgess was supposed to repay $58 million in overpayments. 

But in 2022 legislators again passed a bill granting a temporary reprieve. 

From the Burgess plant’s opening in 2014 through the end of 2021, the PUC-approved agreement cost New Hampshire ratepayers more than $150 million.

Now, with no end of ratepayer subsidies in sight, legislators have passed yet another bill to keep the gravy train running. 

This one, House Bill 142, forgives the more than $50 million in overpayments Burgess is supposed to repay, directs the Public Utility Commission to expedite any docket item related to the Burgess plant, and writes into law the presumption that any “relief provided to the Burgess Biopower plant by the restoration of the terms of the original PPA shall be deemed to be reasonable, legitimate, and in the public interest for the purposes of RSA 374:57, or any provision of law applicable to the approval of power purchase agreements.”

In other words, it stacks the deck at the PUC in favor of Burgess Biopower and against consumers. 

The terms of HB 142 would prove so costly that the Business and Industry Association and the Sierra Club both argued against its passage. The BIA has asked Gov. Sununu to veto the bill, citing the “significant additional expense on the energy bills of commercial and industrial ratepayers.”

Boosters of the plant claim that its subsidies are necessary because the plant supports 240 jobs, making it a “major economic catalyst” for the state.

In fact, the plant employs fewer than 30 people, or about as many as a large Dunkin’ Donuts franchise. There are two restaurants in Berlin that employ nearly as many people as the power plant, according to state employment data. 

The additional 210+ jobs the plant “supports” are jobs in the timber and related industries. For context, that’s about as many people as work at a large Walmart super center, or a Walmart plus a small business or two in the strip mall it inhabits. 

The Burgess Biopower plant is in no way a “major economic catalyst” for the state. It’s a large taxpayer in Berlin, but that makes it an important local business, not an important player in the state’s overall economy. 

The plant’s biggest economic contribution to the New Hampshire economy is to suck money from Eversource’s coverage area and redistribute it to an otherwise unprofitable power plant owned by a private equity firm, as well as to a few hundred people (at best) in the timber industry throughout Northern New England and Canada. (Only about half of the wood purchased by the plant is from New Hampshire.)

If HB 142 becomes law, more than $50 million ratepayers overpaid to subsidize this plant, and which are supposed to be returned to ratepayers, will be forgiven. 

New Hampshire has among the highest electricity rates in the United States. This discourages business investment in the Granite State, particularly in manufacturing. Lowering those costs would improve New Hampshire’s economic outlook. Forgiving ratepayer subsidies for a single small business in Berlin would do the opposite.  

The state shouldn’t subsidize private businesses. If legislators really believe it’s in the public interest for Granite Staters to be compelled to support a biomass plant, they could make the case for writing such a subsidy into the state budget. Doing it through an elaborate scheme that pushes electric utility rates higher is less transparent and more economically damaging.

Editor’s note: HB 142 would eliminate Burgess Biopower’s obligation to repay consumers for more than $50 million in overpayments made to the plant. An early version of this story indicated that the overpayments would continue indefinitely.

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Federal agency lobbied to block New England access to domestic natural gas, emails show

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A federal government agency worked in the winter of 2019 to prevent New England from accessing adequate supplies of natural gas, emails recently obtained by the Cato Institute show. 

Government is supposed to work on behalf of citizens, not special interests. But the U.S. Maritime Administration (MARAD), a subdivision of the U.S. Department of Transportation, has been working in coordination with the U.S. shipbuilding industry to prevent New England from importing domestic natural gas when supplies run short in the winter. 

Why? To protect U.S. shipbuilders from foreign competition.

The Jones Act, a century-old federal law, requires that ships transporting goods between two U.S. ports use ships built in America, crewed by Americans and owned by American companies. That’s a problem for New England because no liquid natural gas tankers are in compliance with the Jones Act. 

With no LNG tankers capable of legally bringing natural gas from Texas or Pennsylvania to Boston, New England governors have spent years pressing for waivers from this protectionist law. After the extremely cold winter of 2017-18, that effort was redoubled. But it was crushed with the help of MARAD, a move that put the entire region at risk of blackouts during periods of peak demand.

Through years’ worth of Freedom of Information Act (FOIA) requests, Cato Institute researchers recently exposed how MARAD lobbied to block the importation of domestic natural gas into New England even when the region’s supply constraints put lives at risk.

Cato scholar Colin Grabow laid out the sordid, outrageous story, which we summarize with permission here.

The background: In early 2016 the United States began large‐ scale exports of LNG following the opening of an export facility in Sabine Pass, Louisiana. As export levels increased, observers began to point out the Jones Act’s role in preventing this LNG from reaching U.S. consumers. In March 2018, for example, the Texas Railroad Commissioner sent an open letter to Congress noting the Northeast’s importation of gas from Russia instead of Texas because of the Jones Act. In August of that year, a group of New England governors floated the possibility of Jones Act modifications to help meet regional energy needs while that December Massachusetts released a comprehensive energy plan that repeatedly cited the Jones Act as an obstacle to obtaining domestic LNG.

In 2019, as New England elected officials pressed Washington for a Jones Act waiver, a senior MARAD official began lobbying others in the U.S. government, including the secretaries of energy and transportation, to oppose a waiver. MARAD also tried to stop Massachusetts’ waiver request, in part by giving the state false information about the status of its waiver request and one from Puerto Rico. 

This is not speculation. Cato got the emails, which show MARAD officials collaborating with shipping industry leaders on messaging in the agency’s effort to block Jones Act Waivers for New England.

These emails come from January of 2019, just a year after New England came within two days of rolling blackouts because of a shortage of natural gas, according to ISO New England, the region’s power grid operator. The winter of 2017-18 was so cold that Massachusetts power generators burned through twice as much oil in two weeks as they did in all of 2016.

The CEO of ISO New England testified to the U.S. Senate Committee on Energy and Natural Resources in January of 2018 that New England’s access to natural gas was dangerously constrained.

“Bitter cold temperatures drove an increase in demand for natural gas, Gordon Van Welie said in his testimony. “However,  we’ve known for several years that when it gets cold New England does not have sufficient natural gas supply infrastructure to meet demand for both home heating and power generation. Constrained pipelines resulted in substantially higher natural gas prices which led to much older and less efficient oil- and coal-fired power plants running ‘in merit.'” 

It was no secret in Washington that New England was one long cold snap away from rolling blackouts. 

Yet MARAD officials, in coordination with U.S. shipbuilding interests, succeeded in squashing the region’s effort to get an exemption from the Jones Act. This amounted to a federal agency putting the financial interests of one industry ahead of the health and safety of an entire region of the country.

With ISO New England and the Federal Energy Regulatory Commission again warning about the possibility of rolling blackouts if we experience another prolonged cold snap, there are renewed calls for a Jones Act waiver for New England. U.S. Rep. Chris Pappas has said he favors a waiver. (He said this on my radio show last week.)

Will New Englanders win this time? That depends not just on the political influence of shipbuilders and their unions, but on the influence of a federal agency that has aligned with them and against consumers. Needless to say, that’s not how government is supposed to work. It’s how government too often works under the corrupting influence of protectionist laws. 

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New England enters this winter ‘basically crossing our fingers and hoping’ for no blackouts

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The warning from New England’s electric grid operator, ISO New England, has become an annual refrain: Insufficient access to a dependable supply of fuel puts the entire region at risk of rolling blackouts this winter.

This year, there’s a new hint of urgency in the warnings, which have come from multiple sources.

“Without adequate gas, the region may not be able to meet the demand for home heating and electricity — and, when reliability suffers, the clean energy transition suffers,” ISO New England said in a statement last month.

That statement came ahead of the Federal Energy Regulatory Commission’s New England Winter Gas-Electric Forum held in Vermont on September 14. 

“We’re going into this winter basically crossing our fingers and hoping,” FERC commissioner James Danly said there, according to The Boston Globe. 

Charles Dickerson, president of the Northeast Power Coordinating Council, said at the forum that moving to a greater reliance on renewable energy was a widely shared goal. But the transition from coal and gas to renewables was not technologically feasible immediately. Therefore, using gas as a bridge fuel remained necessary, he said. 

That, however, is a problem because of pipeline constraints.

“Because there’s a retirement of coal in the region, the technology that we’re most reliant upon, and that we’re going to have to be reliant upon, to make it plain, is a gas type technology, natural gas,” Dickerson said. “The problem in New England is in the winter time there’re only but so many gas pipes feeding natural gas into the New England area, and those gas pipes can be constrained.”

The Globe offered a similar summary of the situation New England faces each winter:

“The challenge is daunting, as New England has limited ways to bring in natural gas — pipeline, ship, truck, or barge. In addition to being the dominant fuel for home heating, natural gas is used to generate more than half of the electricity in New England. And in winter, when demand is high, gas goes to heating buildings first before generating electricity.”

This week, ISO New England’s warnings made news again.

“New England power producers are preparing for potential strain on the grid this winter as a surge in natural-gas demand abroad threatens to reduce supplies they need to generate electricity,” The Wall Street Journal reported.

As ISO New England explains the situation on its website:

“During the last few years, inadequate infrastructure to transport natural gas has at times affected the ability of natural-gas-fired plants to get the fuel they need to perform. This energy-security risk has become a pressing concern in New England, considering the major role natural-gas-fired generation plays in keeping the lights on and setting prices for wholesale electricity.”

The warnings have been consistent for years: New England wants to make wind and solar a larger portion of the energy mix (which it has been doing). But in the meantime, we remain at risk of rolling winter blackouts if spikes in energy demand exceed our dangerously tight supply of natural gas. 

It’s a simple point, made simply, year after year after year. 

And year after year after year, it is ignored. 

Activists tell us we don’t need new pipelines or liquid natural gas terminals because renewables can provide baseload power now. 

But they can’t. Not at scale. Not yet. 

The intermittent nature of wind and solar power requires it to be backed up by more reliable sources of power. That means we’ll still need natural gas or nuclear power to cover our energy needs. 

It also means wind and solar are more expensive than commonly assumed, as additional backup generation has to be built to cover the times when they aren’t producing enough power. 

“Achieving baseload configurations—at least within the constraints that currently define baseload energy—burdens renewable power with a major ‘scale-up’ problem, i.e. the need to overbuild generation capacity to store electricity in sufficient quantity to serve year-round load demand,” a University of North Carolina study found. “The extent of this overbuilding is noteworthy, producing capital costs 6-10X those of the reference natural gas plant for serving the same demand.”

Environmental activists and some politicians say that New England’s high energy prices are caused by our over reliance on natural gas. But our reliance on gas is not the cause of high prices. The shortage of gas is. We could generate 100% of our energy with gas and still have low prices as long as we had a ready, steady supply of gas. 

But we don’t have that. 

Reducing the region’s reliance on gas (and oil) — through conservation efforts and the expansion of other sources of power — are worthwhile goals. 

But the bottom line is that we will rely on natural gas for a long time, and until we find a way to increase the available supply, we will remain at risk of rolling blackouts. 

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How a protectionist shipping law could leave New England in the cold

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By Jonathan Helton

Will New England have enough fuel this winter?

The region’s six governors have their doubts, and in July they wrote U.S. Energy Secretary Jennifer Granholm to ask for relief from a 1920 shipping law that has limited the region’s supply of fuel, particularly oil and natural gas.

The governors asked the Biden administration to “explore the conditions under which it might be appropriate to suspend the Jones Act for the delivery of LNG [liquid natural gas] for a portion or all of the winter of 2022-2023.”

They flagged the 102-year-old Jones Act because it requires that goods shipped between U.S. ports be carried on ships that are U.S. flagged, U.S. built, and mostly owned and crewed by Americans.

Since New England uses natural gas to meet nearly half of its electricity needs, this old law puts the region in a precarious position.

A shortage of natural gas pipeline capacity makes it challenging for New England to get enough fuel during periods of peak demand, such as the coldest days of winter and the hottest days of summer.

Importing domestic natural gas by tanker ship offers a possible solution. But the Jones Act gets in the way. Its requirement that New England energy companies hire domestic ships to transport fuel between American ports actually prevents New England from shipping fuel from Texas or Pennsylvania to Boston.

How?

There aren’t any American LNG tankers, despite America being the world’s largest LNG exporter, with major export terminals on the Gulf Coast.

No LNG tankers have been built in the U.S. since 1980. This is largely because U.S. shipyards do not construct competitively priced ships. In 2015, the U.S. Government Accountability Office estimated it would cost up to three times the world market price to buy an LNG tanker from a U.S. shipyard, assuming one could be built at all.

In general, most of New England’s LNG arrives via pipeline. Pipeline capacity, however, cannot be added quickly.

As New Hampshire Consumer Advocate Donald Kries wrote in August: “The interstate pipeline network does not have enough capacity to supply the region with all of the natural gas it needs to heat all the homes and businesses reliant on that fuel while supplying all of the [natural] gas generators that would need to fire up in an extended cold snap.”

The Jones Act leaves foreign imports as the best alternative. Unfortunately, imports from abroad often run counter to U.S. foreign policy. Before the war in Ukraine, for example, New England and Puerto Rico bought LNG from Russia on occasion. Similarly, Hawaii imported as much as a third of all its oil from Russia, mainly because the Jones Act made it too expensive to buy U.S. oil. But President Joe Biden’s ban on Russian fuel imports put an end to that.

Energy Secretary Granholm met with the New England governors on Sept. 15 to talk about their Jones Act waiver request, but according to Reuters, the outcome wasn’t great.

“In the event that there is an issue where additional supplies of heating fuels are needed, we would work with the states as appropriate to see what tools are needed,” a U.S. Department of Energy official told the news service.

Such obfuscation is unfortunate because a Jones Act waiver would be a win for everyone. New England residents could have a reliable supply of fuel, and probably would save on electricity costs, which already are extraordinarily high.

A Jones Act waiver also would unlock a new market for Gulf Coast LNG exports. And U.S. maritime interests should have no reason to complain, since there aren’t any LNG tankers that comply with the Jones Act anyway.

Beyond a waiver, Congress could reform the Jones Act in more substantial ways. The law has failed in its mission to ensure a healthy maritime industry in the name of national security, and an update is long overdue.

Today, only four U.S. shipyards build large oceangoing commercial ships, and only 93 such ships are Jones Act-compliant — down from 257 in 1980. Since 2020, those shipyards have produced only two large, oceangoing vessels, with one other large cargo ship set to be completed later this year — and it is not an LNG tanker.

Perhaps the best initial reform would be to repeal the law’s U.S.-built requirement, even if only for LNG tankers. This would put more LNG tankers into service for the American people, make it easier for U.S. carriers to expand their fleets and markets, provide more jobs for U.S. mariners, and help keep New England warm during the coming winter.

Everyone would win.

If we maintain the status quo, the odds of New Englanders running short of fuel this winter remain elevated. Why court such a disaster when a solution is as easy as reforming a single bad shipping regulation?

Jonathan Helton is a research associate at the Grassroot Institute of Hawaii.

 

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Nuclear power is having a moment despite, not because of, environmental activists

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Energy shortages in California and Europe have prompted a revival of interest in Nuclear power. And who gets the credit? Environmental activists, naturally. 

“Why even environmental activists are supporting nuclear power today,” National Public Radio gushed last week. 

The few environmentalists highlighted in the story deserve credit for taking such an unpopular position within the movement. NPR even acknowledges their pariah status.

“We felt like we were on an island all by ourselves,” Mothers for Nuclear activist Kristin Zaitz said. “We had people wishing that we would die, wishing we would get cancer…making weird videos about us that made me feel like, am I unsafe, is my family unsafe?”

This aired on NPR, which is progress. Also progress: NPR accurately reported nuclear power’s superior record on safety and pollution:

“In terms of deaths from accidents or pollution, nuclear is far safer than coal or natural gas – the largest sources of electricity in the U.S.

“Diablo Canyon got a boost last year when researchers from MIT and Stanford said keeping the plant open until 2035 would cut carbon emissions from California’s power sector by more than 10% and save $2.6 billion in electricity costs.”

This is welcome, yet these assessments of nuclear power’s safety and environmental record aren’t exactly news. 

You might not know that, though, if you listened to most environmental activists, who’ve spent decades wrongly portraying nuclear power as more dangerous and worse for the environment than other options. 

Environmental activists were the ones who pushed for Germany to close its perfectly good nuclear power plants, making the country more reliant on Russian oil and gas. 

They pushed for California to close the Diablo Canyon nuclear power plant, without which California probably would be suffering blackouts right now.

They pushed for the closure of Vermont Yankee, which resulted in increased carbon emissions in New England.

And they worked tirelessly to close Maine Yankee, Connecticut Yankee, Yankee Rowe, Indian Point and other nuclear power plants in the Northeast and throughout the United States.

To the delight of environmental activists, the Northeast has lost more than a handful of nuclear plants in recent years, mostly because it became uneconomical to continue running them (something environmentalists tried hard to ensure).

  • From 1972-1996, the Maine Yankee nuclear power plant was the largest power generator in the state. But environmental activists opposed it from the start an harassed it with an ongoing series of ballot initiative and bills to shut it down. It closed for cost reasons. 
  • From 1972-2014, the Vermont Yankee nuclear power plant generated power in Vernon, Vt. Environmentalists worked the entire time to get it closed, and they succeeded even though the plant had been operating safely and had just had its license renewed through 2032. The plant’s closure resulted in an increase in New England carbon emissions as nuclear power was replaced with natural gas. 
  • From 1960-1992, the Yankee Rowe plant operated in Rowe, Mass. It was protested by environmental activists. Its owners shut it down rather than pay for federally mandated testing that was demanded by activists.
  • From 1972-2019, the Pilgrim nuclear power plant operated in Plymouth, Mass. Activists pressed for its closure all along, and the plant owner ultimately shut it down for economic reasons in 2019. Its power generation was replaced by natural gas. Afterwards, predictably, New England carbon emissions increased. 
  • From 1968-1996, the Connecticut Yankee nuclear power plant provided low-carbon power to Connecticut. Environmentalist sought its closure. This plant was cited for safety violations, though the Nuclear Energy Institute says the site of the decommissioned plant is safe enough to turn into farmland. It was closed for cost reasons.
  • From 1962-2021, the Indian Point nuclear power plant generated power in Buchanan, N.Y. Environmental activists challenged the plant’s continued operation, and the State of New York threw up numerous legal obstacles to the plant’s license renewal, making renewal too costly for the owner to pursue. New York carbon emissions increased after Indian Point’s closure, of course. 
  • And then there’s New Hampshire’s Seabrook Station, which was supposed to open in 1974. Environmental activists successfully delayed its opening until 1990. Since it was first proposed in the 1970s, it has been protested continuously by anti-nuclear activists, who still want to shut it down. They successfully prevented the plant’s second reactor from being built. By delaying and shrinking the plant, activists managed to increase New England carbon emissions and prolong the use of oil and coal in New Hampshire.

State subsidies for renewables, which artificially suppress wholesale energy market prices, coupled inexpensive natural gas helped make nuclear power plants less economically viable.

Environmental activists gleefully contributed to nuclear power’s negative economic and regulatory environment by misleading the public and elected officials about nuclear power’s safety and environmental record, pushing to tilt the playing field in favor of renewables, and harassing plant owners with lawsuits and protests. 

It’s nice to see the small group of pro-nuclear environmental activists get credit for being right when the rest of the green movement has been shamefully, dangerously wrong about nuclear power from the start. 

But that’s only a small part of the story. The bigger story is how the environmental movement put itself on the wrong end of one of the biggest fights of its existence and wound up hurting the environment as a result.

And all the while, they sought to delegitimize the activists, policy wonks, industry experts, academics and researchers who told the truth. That’s the story that needs to be told. 

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