As any journalist can tell you, nothing promotes clarity of thought and purpose like a looming deadline.
So it wasn’t a shock when Governor Deval Patrick and Attorney General Martha Coakley finally reached a deal this week with NStar, offering state backing for the big utility to merge with Northeast Utilities in return for concessions to customers and commitments to buy power generated by Cape Wind, the controversial offshore wind project that has yet to be constructed in Nantucket Sound.
The business agreement between NStar and Northeast, struck in October 2010, was set to expire in less than nine weeks if the merger remained unconsummated. NStar executives had their deal on the line, and state officials risked losing their temporary leverage over the utility.
The headlines focused on NStar’s commitment to purchase 27 percent of the expensive power to be generated by Cape Wind - something the utility had been loath to do. Less noticed was another concession NStar made: that it would not use any hydropower to meet state-mandated renewable energy targets for the next five years.
That was a strange sort of concession, because hydropower already doesn’t count as a qualified renewable energy source under current state requirements. So what was the point of NStar’s hydropower concession? I didn’t get a good answer yesterday from anyone involved.
The NStar pledge is a reference to Hydro-Quebec, a huge source of electricity that doesn’t burn fossil fuel but creates other kinds of environmental problems. And it just so happens that NStar and Northeast Utilities are building a $1.1 billion transmission line that would bring relatively inexpensive hydropower from Canada to our region.
Many business leaders balk at the high price of renewable energy sources favored by current state law and embrace hydropower as a cost-effective way to achieve an environmental goal.
Consider what it costs to buy power today. The overall price of electricity fluctuates but runs at about 8 cents per kilowatt hour. Most qualifying renewable energy sources cost 10 to 15 cents, and Cape Wind power is expected to cost about 18 cents. Hydropower costs about a nickel per kilowatt hour.
Those business leaders have been lobbying on Beacon Hill in terms all legislators can understand: jobs. The Massachusetts Competitive Partnership, an organization created by leaders of many of the state’s largest companies, argues that the current renewable energy law costs jobs because it drives up the price of power for businesses. The group wants utilities to be able to use hydropower to meet renewable goals, but agrees it should not qualify for state subsidies intended to boost developing technologies.