The Value of Wind Energy for Ratepayers and the Region’s Present and Future Economy

In a recent column New England Ratepayers Association’s Executive Director Marc Brown incorrectly claims that wind power contracts recently announced by Massachusetts officials are a bad deal for ratepayers due to wind energy’s “hidden costs.” ("Let's calculate the true cost of wind power" CT Mirror October 4, 2013).

Brown’s claims are based on biased and inaccurate studies and his statements are misleading. First, his statement that wind energy subsidies like the Production Tax Credit are one of the many “hidden costs” passed along to ratepayers is not the whole story. The truth is that every energy source receives tax credits in some form or fashion. With out energy subsidies neither nuclear, oil nor gas would exist as an industry today. To count this against only wind energy isn’t reasonable.

Claiming that renewable resources, such as wind, are less reliable than non-renewable sources of electricity is also false.  The “intermittency” of wind (the proper term) can be balanced with small amounts of natural gas generation, emerging storage and battery technologies, or traditional storage such as hydro.

Furthermore, Brown ignores numerous benefits that make the power contracts announced in Massachusetts—as well as similar agreements announced days prior in Connecticut—an enormous value  to ratepayers both in the Commonwealth and throughout the New England region, as well as the state and regional economy. 

The price of these wind projects has come in just above the cost of natural gas electricity, which is the cheapest power in today’s market. To compare the cost of new wind power to the cost of power produced by old plants whose capital costs have already been charged to customers, and some of which are about to retire because they face the need for significant capital investments, is inappropriate – like comparing the price of a new car to the costs of continuing to repair an old clunker.  At some point – which is now when it comes to old power plants – you have to make the new purchase.  These old power plants are retiring because they are facing competition from new, more economical sources of power like wind.

With wind energy now cost competitive with conventional fuels, states like Massachusetts owe it to their ratepayers to embrace wind resources.  Adding wind to our energy mix can help reduce electricity prices because wind has zero fuel cost.  These power sources bid into the wholesale electricity market at zero fuel prices, reducing the use of generation that requires costly fossil-fuels to run. The net effect is that renewable energy resources lower the overall wholesale electricity price for everyone.

Wind energy also contributes to local economic development, not just in Massachusetts, but also throughout New England. In Maine, where a number of the wind projects will be built, the state will see direct economic benefits from jobs, while Massachusetts will see economic benefits associated with a more secure energy system that is less vulnerable to fluctuating fossil fuel prices. Overall, Brown should not condemn public officials in Massachusetts who are doing the right thing. With strong public support, Massachusetts and its New England neighbors have taken an approach that uses market forces to drive down the cost of renewable energy, which will provide both economic and environmental benefits to our citizens, businesses and industry.  Environmental benefits include reducing greenhouse gas emissions, which contribute to climate change and the more frequent storms we have seen in recent years that bring their own very negative economic impact to local communities. 

By tapping the region’s wind resources Massachusetts is creating an energy system that is cleaner, cheaper, more reliable and more secure, with the power to continue driving the state’s economy forward—a true value for ratepayers and the region’s present and future economy.