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Failure to Build Energy Infrastructure Could Cost New England $5.4B

August 28, 2015 By Karen Henry

hartford conn Energy ManageFailure to expand New England’s energy infrastructure will lead to $5.4 billion more in energy costs for households and businesses, according to a study commissioned by the New England Coalition for Affordable Energy. These impacts would ramp up from 2016 through 2020, with similar or larger impacts expected beyond that timeframe if infrastructure is not added.

These consequences would be on top of the reported $7.5 billion in higher energy costs the region has already incurred over the past three winters due to the natural gas pipeline system reaching maximum capacity during the winter months to meet electricity generation and space heating demands.

Prior studies have examined the need for specific projects or types of infrastructure in the region, but this study examined multiple types of infrastructure to reduce energy costs including natural gas pipelines, electricity transmission lines, renewable and non-renewable electricity generation. The energy price impacts of the constrained energy infrastructure system were then analyzed using a dynamic, economic impact model developed by Regional Economic Models to determine broader impacts on the economy, jobs, personal income and regional competitiveness. The focus of the study was to review infrastructure investment primarily for economic purposes — to reduce prices — rather than investment deemed to be needed solely for reliability purposes.

While some infrastructure projects have been proposed or are under way that would mitigate or eliminate these adverse consequences, timely decision-making by regulatory and permitting agencies is necessary if the region is to achieve more affordable prices for consumers and improved competitiveness for businesses, according to the Coalition.

The study marks the launch of the New England Coalition for Affordable Energy, whose founding members include prominent business and labor groups advocating for more affordable energy for the region’s consumers and businesses. The study was conducted by Boston consulting firms La Capra Associates and Economic Development Research Group.

Photo of Hartford, Connecticut, skyline via Shutterstock.

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