Removing Price Cap Will Only Drive-Up Costs for MA Ratepayers
The Massachusetts Fiscal Alliance and Responsible Offshore Development Alliance (RODA) warned House lawmakers against changing the set “price cap” provision for offshore wind procurement. The cap is an important cost protection for Massachusetts ratepayers against price spikes from offshore wind (OSW) companies. State lawmakers recently passed legislation mandating the use of renewable energy, the only large source of which is currently OSW. By removing or weakening the price cap, state lawmakers therefore almost guarantee state residents will end up paying higher costs for electricity.
“Massachusetts already pays some of the highest prices in the country for electricity and the price cap was designed to protect ratepayers. Any modification to weaken the cap, will make ratepayers more vulnerable to higher costs. Now is not the time to expose Massachusetts ratepayers to higher electricity costs, even if it means some offshore wind companies will make less money,” stated Paul Diego Craney, spokesperson to Massachusetts Fiscal Alliance. “It’s legislation like this that really makes you wonder what kind of world these legislators live in. They think they can use hard working Massachusetts residents as fodder to fund their overzealous climate agenda and to pad the pockets of massive OSW corporations. When people’s bills are jumping through the roof, adding fees is completely out of touch.”
This is in addition to the unforeseen cost of maintenance and transmission problems that will also be passed along to the ratepayers. The Block Island offshore wind farm, online since only 2016 and the sole operating OSW project in New England, has been riddled with lackluster energy production and environmental problems. Risks associated with new technology are costing ratepayers and posing risk to the marine ecosystems and beach since the transmission cables became exposed.
Commercial fishing, a backbone of Massachusetts’ economy and heritage, is also slated to be displaced by OSW. The ex-vessel value of seafood landed in the state reached an all-time high of over $800 million in 2021 and the industry supports nearly 150,000 full and part-time jobs. Rampant deployment of OSW without fiscal and environmental guardrails will devastate the local seafood supply chain, with impacts ranging from fishing profits to shoreside infrastructure, tourism and restaurants, and processing costs.
“Over a decade since Massachusetts rolled out the red carpet to offshore wind, there are still virtually no protections in place to support the continuity of local, healthy, carbon-friendly seafood production,” stated Annie Hawkins, executive director of RODA. “What we need are carrots and sticks to incentivize developers to protect the environment and small businesses. Removing the price cap accomplishes the opposite by absolving responsibility for careful siting and design. These same giant energy companies just showed they can easily afford billions of dollars on wind leases in last week’s New York auction. There’s no evident justification for letting our fishermen and communities foot even more of their bills, given the absence of strong oversight policies.”
MassFiscal and RODA’s concerns are shared by one of the legislature’s most vocal supporter of OSW. State Senator Michael Barrett (D-Lexington), the Senate chair of the Legislature’s Telecommunications, Utilities, and Energy Committee has been an outspoken critic of removing the price cap and adding additional fees to ratepayers. When removing the price cap was first suggested, the Senator penned a letter warning fellow lawmakers to not proceed with the idea.