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EDC Sounds Alarm on Rising Costs of Natural Gas, Electricity

CHICOPEE — The Economic Development Council of Western Mass. voiced its concerns Tuesday regarding the rising costs of natural gas and electricity in the region.

“More expensive energy affects all of us negatively. All of us need to be concerned. Individuals face a reduction of disposable income and increased hardship,” the agency said in a prepared statement. “Businesses face reduced competiveness that threatens job growth and retention. Municipalities face increased energy costs while facing decreasing revenues. Hospitals and higher-education institutions must divert more resources to energy purchases, thus diverting resources from their core missions. Shrinking business and consumer spending reduces investments in those things that define quality of life in Western Massachusetts.”

Through a series of meetings and discussions with entities familiar with the issues, the EDC infrastructure committee released the following findings:

• Recent and future closings of oil- and coal-fired plants have boosted, and will continue to increase, Massachusetts’ dependency on natural gas for electric power generation. Nearly 50% of all electricity in Massachusetts is generated by natural gas, and that proportion is rising. These conditions, when combined with inadequate supplies of natural gas, are resulting in dramatically increased power costs during the winter.

• Gas companies serving this region are reaching the limits of their capacity to serve new customers. Berkshire Gas will stop adding customers in Greenfield at the end of 2014, and in Amherst in 2016. Columbia Gas is reaching the end of its capacity to serve Northampton and Easthampton. It could serve 10,000 more customers in the region if it had additional capacity. The inability to serve new customers will negatively affect economic growth in the region.

• Kinder Morgan is proposing a pipeline-extension project through Northern Mass. that will increase natural-gas supply to Berkshire, Franklin, and Hampshire counties as well as Eastern Mass.

• NU/Spectra proposes an expansion of the Algonquin Pipeline that would increase natural-gas supplies available to the Springfield area and Eastern Mass.

• Several New England states have been working to bring electricity generated by Hydro Quebec to the region.

EDC Infrastructure Committee Chair Paul Nicolai summarized the committee’s work, suggesting that “supplying cost-effective, responsibly clean energy for our people and businesses is a complicated problem requiring balanced approaches and moderate thinking. EDC has struck that balance and encourages policymakers to do so as well.”

At a recent meeting, the EDC board of directors approved a resolution supporting the following actions, which, if implemented, will help to provide an adequate, stable supply of energy at competitive prices:

• Increase natural-gas supply by permitting both natural-gas pipeline-expansion projects proposed for the region and state;

• Increase the sources of power generation by enabling the purchase of hydro-generated electricity from the north;

• Continue support of conservation and renewable-energy technologies; and

• Encourage a regulatory environment that promotes market stability and competitive outcomes.

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