The New York Times last weekend took note of *skyrocketing* utility bills in New England. According to the paper of record,
For months, utility companies across New England have been warning customers to expect sharp price increases, for which the companies blame the continuing shortage of pipeline capacity to bring natural gas to the region. Now that the higher bills are starting to arrive, many stunned customers are finding the sticker shock much worse than they imagined.
New England ratepayers are suffering primarily due to the fact that the regional grid (known as the “ISO-NE”) has undergone tectonic shifts over the last decade, as the region’s fuel mix has shifted dramatically from coal and oil to natural gas. In 2000, coal, oil, and natural gas provided 18 percent, 22 percent, and 15 percent (respectively) of total electric production in ISO-NE; in 2013, coal, oil, and gas provided 6 percent, less than 1 percent, and 46 percent.
It’s not that over-reliance of natural gas, per se, has caused utility bills to blow up; after all, gas is plentiful in the region, thanks to the nearby Marcellus shale, where gas production is booming due to the “fracking” technological breakthrough. Rather, the problem is constraints in gas pipeline capacity. There’s too much demand for gas, and too little infrastructure to deliver the gas. The logistical shortfall is especially pronounced in the winter, when gas demand for power competes with demand for space heating.
In fact, such supply chain bottlenecks historically have been a difficulty commonly attendant to central planning, and, in this vein, environmental policy (at both the State and federal levels of government) has been a major impetus for the recent dramatic shift in fuel resources in New England. Simply put: In a fit to go green, the region went too fast, too soon.
The region thus offers a lesson for the nation as a whole, because EPA’s Clean Power Plan similarly would overhaul overnight the U.S. electricity business. This comparison—between what New England is enduring now and what America could expect given the Clean Power’s implementation—recently was made by FERC Commissioner Tony Clark in response to written questions posed by the Energy and Commerce Committee:
The New England region, which has arguably gone further than any other in already adopting what EPA envisions in its Clean Power Plan, is a case study in the pitfalls of making this transition rapidly. Electricity prices in New England far exceed the national average, and reliability is a very real challenge during critical periods of the year.
I’d be remiss if I failed to note the paramount role played by environmentalists in the plight of the New England electric ratepayer. In addition to agitating for the rules that contributed to the retirement of coal-fired power plants, green special interests have been the primary political force in opposition to building natural gas pipelines.
As aptly tweeted by Heritage’s David Kreutzer,
Big surprise: Shutting down nukes, killing coal, and blocking nat gas pipelines spikes electric bills. http://t.co/Phxqi5kFCR
— David Kreutzer (@dwkreutzer) December 15, 2014