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Executive Summary

New England Energy Landscape Update, October 3, 2016

In August 2015, Daymark Energy Advisors1 (Daymark) and the Economic Development Research Group (EDR) prepared a report for the New England Coalition for Affordable Energy (the Coalition) , The Economic Impacts of Failing to Build Energy Infrastructure in New England. The August 2015 report was prompted by business and industry concerns about high prices and price volatility that led to development of the Coalition.

That report examined a five-year horizon through 2020 and found that energy costs could be $5.4 billion higher in the absence of new infrastructure based on specific assumptions about natural gas pipelines, electric transmission lines and electric generation fueled by wind and natural gas. The impacts on jobs, capital investment and personal income were also modeled.

This report surveys the major issues and developments in the energy landscape impacting the New England region since August 2015. The report discusses the potential consequences of these developments on the cost of energy to consumers and regional competitiveness. It is fair to say that the current energy landscape is in flux and that there is a high degree of uncertainty regarding outcomes over the next three to five years and beyond. In general, the observed changes fall into three broad categories: state policies on electricity supply mix, electricity market drivers, and natural gas infrastructure.

Main Findings
  • State policies influencing the future electricity supply mix will impact the broader competitive wholesale markets going forward.
  • Transformation in the electricity market is likely to impact the timing of investment decisions that can affect price volatility and reliability.
  • Pipeline delays and cancellations may expose the New England region to continued seasoned price volatility and intermittent price spikes.
  • Developments over the past year in New England and adjacent regions have introduced additional uncertainty to the timing and composition of infrastructure additions to the regions over the next five years.
  • Uncoordinated policy and market actions may lead to greater electricity and natural gas price volatility in the near term and suboptimal investment decisions in the longer term, with the potential for adverse jobs and disposable income impacts for New England consumers and businesses in the 2019-2020 period and years immediately following.

  • Read the full report here.

    Original Report: Economic Impacts of Failing to Build Energy Infrastructure in New England, August 25, 2015

    New England has among the highest natural gas and electricity prices in the U.S., a distinction that is increasingly being driven by inadequate energy infrastructure. In fact, energy infrastructure constraints have reportedly cost the region at least $7.5 billion over the past three winters alone.

    Since 2000, New England’s reliance on natural gas to generate electricity has increased dramatically and is now used to fuel over 40% of the region’s generation, which determines electricity prices a majority of the time. Pipeline infrastructure has not kept pace with this increased demand and is reaching maximum capacity, especially during the winter months, to meet both electricity generation and space heating demands.

    The economic consequences of failing to build natural gas and electricity infrastructure to serve New England’s energy needs over the next five years (2016 to 2020) can be characterized in three ways: the cost of electricity and natural gas, the region’s employment, and disposable income.

    Read the full report here.

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