Silver lining in Northern Pass collapse

GOV. CHARLIE BAKER HAS another chance to deliver the affordable, reliable and clean energy that Massachusetts families and businesses want. His first decision, a proposal to export our energy dollars to purchase destructive hydropower from Canada, has been appropriately rejected by New Hampshire officials. Now, the Baker administration has given itself until this Friday, February 9, to make a better choice. That better choice is clear: It’s time to go all-in on wind and solar projects we can build and benefit from here in New England. Unlike Canadian dams, these projects will create new jobs and provide many economic benefits for Massachusetts residents.

First, some context. In 2016, the Massachusetts Legislature recognized the benefits of clean energy for the Commonwealth and required electric utilities to competitively solicit and contract for approximately 1,600 megawatts of offshore wind and 1,200 megawatts of additional clean energy. The offshore wind procurement is moving forward without controversy, but after receiving dozens of bids for other clean energy projects, the administration proposed purchasing Canadian hydroelectricity via the Northern Pass transmission line through New Hampshire being developed by Eversource. Northern Pass fails on nearly every criteria the projects were supposed to be judged on, including whether they enhanced reliability, are cost effective, bring economic and environmental benefits, foster employment and economic development, and demonstrate a benefit to low-income ratepayers.

Building and operating the dams has been devastating to the indigenous Pessamit Innu and others who depend on the rivers for their way of life. Perhaps most important for Massachusetts’ goals, buying hydro from Canada fails to protect the climate.

The Sierra Club recognizes that tackling the climate crisis requires overcoming entrenched dirty energy interests and moving to a clean energy economy as quickly as possible. It means we must electrify everything with carbon-free electricity. However, if clean electricity costs more than oil and gas for transportation and heating, then our economy will not make the transition to clean electrification fast enough, or perhaps at all. So it’s critical to proceed with the recognition that projects which increase electricity costs, but don’t ultimately help significantly reduce carbon pollution, are bad for both consumers and the climate.

So when Gov. Baker decided to purchase hydropower from existing or under construction dams, how is that bad for the climate? It comes down to basic economics. Because the marginal cost of producing hydropower is essentially zero, a dam operator already has an incentive to maximize the amount of generation they produce. The only reason not do that is to increase prices and make more money. The result? Paying higher prices for existing hydro plants doesn’t increase their contribution to protecting the climate, it simply means that electricity consumers elsewhere are buying less hydro and instead getting something dirtier, like gas.

In sum, because the Northern Pass line unnecessarily increases electricity prices without adding any additional clean energy generation capacity, it is actually counterproductive from a climate perspective. Even worse, the Northern Pass project may not have been the cheapest option.

The same can be said, for example, of the debate in Connecticut over whether it makes sense to pay more to keep open an existing nuclear plant like the Millstone facility. Setting aside the very real safety and environmental dangers posed by nuclear power, the question for the climate comes down to whether one believes the plant might retire “prematurely.” Independent analysis has demonstrated that it is profitable, and not likely to do so. Therefore it’s actually bad for the climate – and everyone paying higher electricity prices – to pay the nuclear plant more.

So if paying unnecessary higher prices for existing nuclear and hydro is bad for climate protection, then why did the Baker administration choose that option? There are three possible explanations: a) Eversource was both the bidder and evaluator; b) Eversource and Hydro Quebec have poured huge amounts of money into the political process in the Northeast; and c) the Baker administration genuinely believed it was the best option, but is mistaken, for all the reasons laid out above.

So what should New England officials do instead? We know that new wind or solar projects would provide additional net carbon pollution reductions, and that their prices are falling fast and already extremely competitive. Not only would these projects actually reduce carbon pollution, they would also create more jobs and economic benefits for our region.

The good news is that the failure of the Northern Pass line means that Gov. Baker now has the opportunity to choose much better options. He should choose the thousands of megawatts of new wind and solar projects in New England that offered competitive bids, that will actually reduce carbon pollution, and that can create the kinds of benefits for communities and workers needed without unnecessary negative consequences for the environment.

Emily Norton is Massachusetts chapter director of the Sierra Club and a Newton city councilor.

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