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Congressmen Kennedy, Neal: Electric Rates Threaten Berkshire Economy
By Andy McKeever, iBerkshires Staff
01:51PM / Monday, June 08, 2015
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U.S. Rep. Richard Neal, U.S. Rep. Joseph Kennedy III, state Sen. Benjamin Downing, and state Rep. William 'Smitty' Pignatelli toured Onyx Specialty Paper on Monday. 
LEE, Mass. — Rising electric rates could threaten the local economy and federal and state lawmakers are seeking a long-term strategy to reel those costs in.
 
That brought U.S. Rep. Richard Neal and the 4th District's U.S. Rep. Joseph Kennedy III to Onyx Specialty Papers on Monday morning to see how those rates are impacting area businesses.  
 
Neal said Onyx could hire for an additional 70 jobs if energy costs were lower.
 
"We have high-energy costs that are impeding economic growth," Neal said. 
 
"Not to miss the point, that I've raised repeatedly, is that when you look at energy costs in the Berkshires, they are more outside the mainstream than the rest of the state and it is not a coincidence that it is the only part of the state that loses population." 
 
Kennedy, who sits on the U.S. House Energy and Commerce Committee, said New England's energy costs are being affected by a lack of capacity, lack of "coherent regional strategy" and economic markets "not operating properly." 
 
"We need to get a handle on these electric rates that are having a huge impact on good, local businesses that otherwise would be expanding at a great rate but are prohibited because of [electrical] rates," Kennedy said.
 
He said he is particularly looking at capacity markets, which he said pose a threat to future energy costs. Those markets are essentially base payments investors make to energy generators three years into the future to "keep the lights on."
 
That future capacity market sets the base price generators need, and with a capacity shortage, ratepayers are hit with an additional burden to make up the difference, he said. That auction has been rising each year and is now up to $4 billion, which will raise the price on residential bills in the future, he said.
 
He recently held a summit with Federal Energy Regulatory Commission and ISO New England to fund out why the market has been increasing drastically and what can be done to ease the burden on businesses and residents.
 
"It is trying to get some clear answers from regulators about how the markets are functioning and why we are getting the results we are getting. And what can be done to adjust those," Kennedy said.
 
He has joined Neal's efforts to "pull everybody together" and craft a strategy to tackle rising costs. From the federal to the state to even the local level, Kennedy says all of New England has to have a conversation about its energy future.
 
"We pay some of the highest electric rates in the country. We've made huge leaps forward in conservation. We've made huge leaps forward in energy efficiency. And, yes, we still need to make those investments and keep pushing the envelop. But we also have to make sure our local employers have the resources they need to continue to be competitive," Kennedy said. 
 
"They are getting recruited to other parts of the country."
 
State Sen. Benjamin Downing, who chairs the state joint Joint Committee on Telecommunications, Utilities and Energy, says that plan needs to include multiple sources of energy.
 
Rep. Joseph Kennedy III sits on the U.S. House Energy and Commerce Committee. 
"We've essentially left our energy future up to these capacity markets. There is a reason we don't have a strategic plan in the region and it is because we've allowed it to be auctioned off through these markets. We haven't developed it in the way we ought to," Downing said. 
 
"We all know the bits and pieces of the solution — whether it be hydroelectric, land-based wind, increased investment in efficiency and renewables, and capacity. All of that is part of a pie that everyone seems to think is part of the mix. Specific projects aside, that mix generally seems to make sense."
 
The shortage of capacity is somewhat driven by the closure of coal and nuclear plants and it has led to multiple proposals to expand natural gas pipelines. In the Berkshires, Kinder Morgan's Northeast Energy Direct Project is eyed to carry natural gas from Pennsylvania, through New York, Massachusetts and Maine.
 
The pipeline route would cut through Berkshire towns and has faced tremendous opposition.
 
Neal said the project has been "handled by Kinder Morgan as bad as I can remember" and that the controversy was created by the company alone. They've been "slow with answers" and Neal doesn't support the project as it is proposed. 
 
But, "we all acknowledge that capacity is an issue and how to best accomplish this is where we need to come down," Neal said. He said renewable energies like wind turbines and solar, and accessing hydroelectricity from Quebec, as other ways to alleviate the capacity issue. 
 
"You can't just say no to everything," Neal said.
 
Kennedy says a pipeline project "could be" a piece to the regional plan because renewables can't do it all. He said there is also the possibility of new power generation in Massachusetts. 
 
"We need base load energy for when the sun doesn't shine and the wind doesn't blow," Kennedy said.
 
There is an urgency to crafting the new plan and curbing markets because it is affecting the economy of Massachusetts, Kennedy said. While Massachusetts can boast of brain power and educated workers, other areas in the country can make an economic energy argument to lure businesses away. 
 
He cited Texas, where there is low taxes, low energy costs, and no zoning as reasons businesses would consider relocating. 
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