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Natural gas, not oil, affects electric rates
Credit: By Patrick McGowan, www.southcoasttoday.com 29 February 2012 ~~
Translate: FROM English | TO English
Translate: FROM English | TO English
Over the last couple of weeks there has been a steady flow of news stories about soaring gasoline prices, on pace for record highs by summertime and threatening the nation’s fragile economy. A familiar reason is at cause – the rising price of crude oil due to increased global demand and instability in the Middle East.
Less glamorous but equally prescient, The Standard-Times reported on Feb. 14, that NStar was proposing to cut electricity rates for its large commercial customers by nearly 37 percent starting in April. Small commercial and residential customers could also see reductions when their rates change July 1. The reason behind these cuts: falling natural gas prices.
These differences highlight a dramatic change in America’s energy landscape. For several years now, natural gas production has been greatly expanding in the lower 48 states. Enormous supplies have been discovered and new technologies are used to extract it. It provides a safe and stable supply, a cleaner alternative to coal and oil, and lower carbon emissions to generate equal amounts of electricity. And fortunately, natural gas is the biggest source of electricity generated in Massachusetts, while oil accounts for less than 1 percent.
Earlier this month in commenting on the wind turbine controversy, The Standard-Times quoted Fairhaven Selectman Dr. Brian Bowcock as saying “if oil goes to $150 a barrel next summer, people will be looking to put up five generators.” His words, if not intentionally misleading, demonstrate a gross misunderstanding of our energy market.
Shouldn’t town officials be informed on these matters before entering into negotiations and signing contracts that bind residents for 20 years and multi-millions of our dollars? The $5-$10 million savings advertised by the Fairhaven wind developer and town officials was based on electricity costs growing at a faster rate than even the high-end estimate published by the U.S. Energy Information Administration, so the town’s actual savings are at significant risk of falling well short of $5 million.
There is also another layer to the idea that we in Fairhaven will be powering our municipality on renewable energy. Yes, renewable energy will be generated here; but we opted to relinquish our “claim” to it as the Renewable Energy Certificates were sold. The purchasers of these certificates are the de facto “green energy” consumers. So if you really believe in it, next time NStar sends you that advertisement to purchase a “green energy” plan for an extra few cents per kWh on your electric bill, don’t just toss it in the recycle bin. I believe we should transition to renewable energies more quickly, but we need to be more responsible for how it’s done.
Patrick McGowan lives in Fairhaven.
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