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Taking steps to provide stable energy future

Whether operating your business or heating your home, most Rhode Islanders got a painful reminder this past winter of the rising energy costs in our state. But Rhode Island is not alone. As a region, New England has some of the highest energy costs in the country. This not only makes it harder for residents to pay their electricity bills, but high costs stifle businesses and impede our region’s ability to attract new companies and jobs.

So why are our energy costs so high? There are many factors, but one of the most influential is that Rhode Island is part of the New England energy grid, and, as a result, we depend on a system over which we have only minimal control. If unaddressed, the cost of electricity will continue to rise, and our limited access to natural gas and inadequate energy infrastructure will continue to hinder economic growth.

Over the last decade, New England’s reliance on natural gas has more than tripled. Models show that as natural gas prices rise, so will electricity prices along with an increase in price volatility.

Unfortunately, our pipeline infrastructure has not kept pace with increasing demand. That constraint, along with cold snaps that put increased pressure on heating and electricity needs, causes major seasonal price spikes and drives up our energy rates. The natural gas pipelines coming into New England from supply points in the west are often loaded to capacity, even during non-peak periods, to meet our electricity generation needs.

So what can we do? Well, no single state can solve this problem alone. Governor Chafee and the other New England governors believe we must act as a region to tackle our energy issues and spur investment in critically-needed energy infrastructure. They have outlined a vision to position New England for long-term economic growth and energy security through strategic investments to:

• Expand natural gas pipeline capacity into New England, and

• Diversify and expand our energy mix through clean energy sources, such as hydroelectric, solar and wind.

With these pieces working together, we have a real opportunity to make Rhode Island competitive nationally with a more reliable, cost-effective and diversified energy portfolio. We will have a mechanism to mitigate price volatility, lower long-term energy prices, and meet common energy and environmental policy goals.

Locally, Governor Chafee has proposed a bill before the General Assembly to empower electric and natural gas distribution companies to work with the Division of Public Utilities and Carriers and the Office of Energy Resources to advance the development of electrical transmissions and the natural gas pipeline, while procuring large-scale hydroelectric power and wind power.

The Office of Energy Resources, with support from Commerce RI, is developing a long-range energy plan for the state that will address many of the cost, reliability and sustainability issues currently affecting the energy system. As part of the state’s energy plan process, models have been developed that show that “business as usual” is the most expensive path for Rhode Island and creates the least number of jobs.

These actions and, more importantly, their implementation will send strong market signals to the utilities and developers throughout New England that Rhode Island, and our region, is committed to taking the necessary steps to create a stable, secure and affordable energy future while preserving our environment and quality of life.

Predictable and competitive costs and a reliable infrastructure are two vital ingredients in creating the conditions for businesses to thrive and grow in Rhode Island. Through coordinated investments in our regional energy infrastructure, we will be able to make significant strides towards building a business environment that promotes the state’s long-term economic health and improves the quality of life for our citizens.

There’s a long way to go, but in terms of identifying solutions to our long-term energy issues, we’re on the right road.

We just need to keep moving our efforts forward.

Marcel Valois is executive director of Commerce RI, formerly the R.I. Economic Development Corp.

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