Tuesday, October 4, 2011

Minority Leaders File Legislation to Protect the Commonwealth’s Ratepayers

House Minority Leader Bradley H. Jones, Jr. (R-North Reading) and Senate Minority Leader Bruce E. Tarr (R-Gloucester), in their effort to bring transparency to the ratepayers of the Commonwealth, have filed legislation to require the competitive solicitation of long-term renewable energy contracts by public utilities.

Filed in response to the costly Cape Wind-National Grid contract, House Docket 4048 seeks to alleviate the unnecessary financial burden that contracts resulting from private negotiations place on the Commonwealth’s ratepayers, businesses, and municipalities.

“It is a sincere fear of mine, that practices similar to the ones used to solidify the contract between Cape Wind and National Grid will lay the framework for a very dangerous and costly precedent here in the Commonwealth,” said Representative Brad Jones. “The legislation that we have filed will help foster an environment of open door, competitive bidding on contracts that have direct, and potentially significant impacts, on the wallets of the residents of Massachusetts.”

Under the Green Communities Act of 2008, utilities are required to solicit long-term renewable energy contracts twice in a 5 year period; however, current law does not require the solicitation procedure to be competitive and instead allows these utilities to engage in closed-door negotiations. Recently, NSTAR successfully secured three long-term renewable energy contracts with smaller land-based wind projects at a significantly lower cost than National Grid’s contract with Cape Wind, illustrating how competitive solicitation procedures stand to benefit the Commonwealth’s ratepayers.

The legislation, filed in both the House and Senate, clarifies the definition of cost-effective long-term contracts to mean those proposed contracts which either: (1) result in net ratepayer savings when compared to current and projected future market prices of energy; or (2) are least costly in terms of electric service rates.

“The cost of electricity is a major factor for the budgets of Massachusetts residents and their employers. Contracts need to safeguard their interests first and foremost,” said Senator Bruce Tarr. “This legislation will work to ensure that the costs passed on to consumers come from a process of transparency and not the shadows of other agendas.”

House Docket 4808 is currently awaiting a bill number and committee assignment.