Advocating for the Expansion of the Region’s Energy Infrastructure

The New England Coalition for Affordable Energy advocates for the expansion of the region’s natural gas and electricity infrastructure to make these vital energy commodities more affordable.

While the Coalition does not take positions on individual projects, its mission is to provide factual information, credible research and analyses underscoring the need for energy infrastructure, to policymakers, elected officials and the public. The Coalition also advocates for the importance of timely decision-making and the consequences of inaction.

Sponsored by the American Petroleum Institute, the Coalition’s membership is open to all – including employers, business groups and consumers who are most affected by the region’s high energy prices.

The Clear and Compelling Economic Consequences of Inadequate Energy Infrastructure

New England has among the highest natural gas and electricity prices in the U.S., a distinction that is increasingly being driven by inadequate energy infrastructure. In fact, infrastructure constraints have reportedly cost the region at least $7.5 billion during a span of several recent winters alone.

Since 2000, New England’s reliance on natural gas to generate electricity has increased dramatically and is now used to generate almost 50 percent of the region’s electricity. Pipeline capacity, however, has not kept pace. ISO New England, the operator of the region’s bulk power grid, has identified up to 4,200 megawatts of natural gas generation that may not be able to get fuel to operate during the winter period, putting system reliability at risk.

In addition, regional and federal environmental and wholesale market policies are contributing to decisions to retire older electricity generating plants – over 10,000 megawatts of power plant capacity will retire or is at risk of retirement by 2020 – about 30 percent of the region’s total electricity generating capacity.

These anticipated retirements will require replacement generation, expected to be primarily powered by natural gas and wind, which in turn, will require expanded natural gas pipeline capacity and new transmission lines to move electricity to and within the region.

Underinvestment in infrastructure has contributed to persistently high energy prices for the region. As shown in the figures below, such costs make it difficult for businesses in New England to maintain competitiveness – compared to other states – which undermines the region’s ability to retain and attract jobs. Higher costs also reduce disposable income for families, impacting their quality of life.

A study commissioned by the Coalition conducted by La Capra Associates (now Daymark Energy Advisors) and Economic Development Research Group shows clear, compelling and immediate economic consequences from failure to build energy infrastructure in New England by 2020:

  • $5.4 billion in higher energy costs which will ramp up from 2016 through 2020, increasing the region’s electricity and natural gas costs by 9 percent in 2020, according to forecasted energy demand and costs. Similar or larger impacts can be expected beyond 2020 if infrastructure is not added as demands for natural gas and renewable electricity increase.
  • Loss of 167,600 jobs between 2016 and 2020 (temporary or permanent private-sector jobs) due to foregone construction activity and higher energy costs predominantly in the following sectors: construction, retail, trade, healthcare, restaurants/hotels, manufacturing and professional and technical services, indicating a wide impact across economic sectors.
  • Lost personal income of $12.5 billion from a total cumulative loss in gross regional product (GRP) of $16.1 billion between 2016 and 2020, including $10.5 billion from infrastructure disinvestment and $5.6 billion from higher energy costs.

To avoid these consequences, the region needs an all-resource strategy including new and expanded pipelines to bring lower cost natural gas from the west, the construction of large-scale wind projects, additional natural gas-fired power plants and new transmission lines to bring hydropower and large amounts of wind energy from the north. This is in addition to continuing the region’s aggressive pursuit of energy efficiency and solar. We need all of them if the region’s energy prices are to become more affordable and energy supplies more reliable.