The six New England states on Thursday announced a regional energy partnership, hoping their combined political will can drive down the costs of electricity and heating in one of the highest cost areas of the country.
“This represents a truly historic day,” said Dan Esty, commissioner of the Connecticut Department of Energy & Environmental Protection. “It will be a major focus of this department’s time and attention.”
Connecticut, Massachusetts, Rhode Island, Vermont, New Hampshire, and Maine will work collaborative to identify the private electric transmission and natural gas pipeline projects that will best lower the cost of energy in the region.
Despite the differences between the states and their populations, the governors and energy departments of each state will work toward what is best for the entire region, Esty said.
A number of private electric transmission and natural gas pipeline projects are in various stages of development in New England. These projects are driven by the desire of companies to build them and the willingness of officials at grid administrator ISO New England and the Federal Energy Regulatory Commission to determine they are necessary.
The change with this regional government partnership is the states will now dictate to the market what is necessary, rather than the market and regulators dictating to the states, Esty said.
To create low cost electricity, the states will look at importing more hydropower from Canada. The highest profile transmission line to access this hydropower is Northeast Utilities proposed Northern Pass line through New Hampshire, but Esty said the states will explore options through Maine and other states as well.
“There’s reason to believe New England needs more transmission. There’s no evidence it needs one particular project,” Esty said.
As a region, New England has the highest electricity rates of the continental United States, partially driven by the constraints of delivering power to the region. This partnership is designed to alleviate that.
New England also typically pays more for natural gas than most other states, because of the same constraints. New York City, which has adequate pipelines, pays about $3 per million Btus for natural gas. New England pays $6-7, said Esty.
“(This partnership) represents a fundamental breakthrough in New England’s energy future,” Esty said.
