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Governors Address $7.5B Energy Question

Posted on April 27, 2015

$7.5 billion.

That’s the amount of money Connecticut Governor Dannel P. Malloy says has been added to the electric bills of New England employers and homeowners during the past two years because of natural-gas pipeline constraints.

ElectriclinessmallEmployers should therefore be encouraged that five New England governors, including Massachusetts Governor Charlie Baker, met in Hartford last Thursday and pledged to work together to help consumers who pay more for electricity than almost anywhere else in the United States. While the costs and political challenges of investments in natural gas pipelines, transmission wires and renewable energy remain formidable, the governors nevertheless acknowledged that solving the energy crisis “is greater than any one state can solve alone.”

“We recognize that each state may support addressing our regional energy challenge in different ways. These efforts must be done in partnership with state legislatures, and respecting the requirements of laws, regulatory proceedings, and opportunities for public participation that are unique to each individual state,” the governors said in a statement.

“Together and respecting the bounds of individual state laws, we plan to continue to work to seek out economically beneficial infrastructure solutions to New England’s power system challenges. We are committed to working as a region to advance New England’s shared economic, energy, and environmental goals.”

The statement was consistent with the recommendations that AIM and statewide business organizations in Connecticut, New Hampshire and Maine made to the governors in an April 1 letter noting that regional and federal policies have boosted New England’s reliance on natural gas to generate electricity from 15 percent to more than 50 percent.

“Until now, our associations worried about lost job growth and economic activity as ��_ enterprises expanded operations elsewhere. Given the current energy crisis, we now face a bleaker scenario: employers moving existing jobs out of New England to lower-cost locations around the country or world,” the business associations said.

“Lack of urgent leadership by New England’s governors may well lead to higher unemployment and a lagging economy for years to come.”

Average electric rates in Massachusetts are the third highest in the nation for industrial ratepayers, and more than twice as high as companies pay in the competitor state of North Carolina. Those costs place employers at a significant disadvantage when competing with businesses located in other areas of the country.

AIM has long maintained that any solution to the region’s energy problem must be fair to ratepayers, market based and implemented without subsidies that force one group of customers to pay the freight for others. The association has opposed programs like Cape Wind that gouge ratepayers without providing meaningful benefits. 

In addition to communicating with the New England governors, AIM currently sits on a commission to bring the commonwealth’s solar energy program into line with other states that install solar for less than half the price of what Massachusetts consumers pay. The association also represents employers on the Energy Efficiency Advisory Council, which oversees nearly $1 billion in annual spending for energy efficiency.

AIM and its 4,500 member employers urge the New England governors to continue their discussions and to solve one of the key burdens facing the regional economy.

AIM has recently established an Employer Energy Interest Group. If you would like to be on this group and receive regular updates, please email me at