High energy costs threaten recovery

Rhode Island’s economy continues to recover, with new companies contemplating locating here and existing ones considering investing in growing their footprints and workforces. But one significant issue continues to threaten their growth and the possibility of a full economic rebound: high energy costs.

New England continues to be plagued with some of the highest electricity costs in the country. The latest figures from the U.S. Energy Information Administration put our region’s electricity rates at 50-58 percent higher than the national average. In Rhode Island, we’re consistently ranked among the top 10 states with the highest electric costs. Our industrial electric rates are the highest in the continental United States and more than double the national average!

The combination of high electric costs and unpredictable price spikes represent a huge drain on nearly all Rhode Island businesses, but particularly those with large facilities or operations with significant energy needs. A new survey by the New England Coalition for Affordable Energy found that 80 percent of Rhode Islanders are concerned about energy affordability. Not only that, but manufacturers here ranked highest among New England states for their concern on what high electric costs impact their competitiveness.

Today, Rhode Island is in effect an “energy island”: We’re at the end of the pipeline literally and figuratively. We produce only a portion of our own power in-state, and it’s proven cost-prohibitive and controversial to build new gas pipelines or thousands of miles of transmission lines carrying Canadian hydropower.

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We all support renewable energy as part of the state’s energy portfolio, but the reality is that we simply can’t meet our energy demand in a meaningful or affordable way without traditional energy sources. More than 10,000 megawatts are coming off the New England grid in a few short years – and there’s just no way that we can fill that gap with renewables or energy-efficiency methods alone.

We need to tackle the issue of high electric costs immediately. The fact of the matter is, we simply can’t expect to lure – or even keep – companies here if we can’t get our energy costs in check. We risk losing some of our valued companies to other states where energy costs are significantly less.

The good news is, we have a very viable option on the table now that could drastically lower electric costs: the proposed power plant in Burrillville. The Clear River Energy Center would save Rhode Island ratepayers $200 million in just the first four years of operation. Not only that, but it would also represent one of the largest new investments by a company in our state in years. It would put more than 300 construction workers to work building the plant. How many other companies are lining up to invest that kind of money in building and hiring in the Ocean State? The other good news is that the New England states are actively coordinating an effort to bring more natural gas to the region by expanding our pipeline capacity.

From family-owned factories to information technology companies, every Rhode Island business feels the pain of high energy bills. That’s why our members – who represent the roughly 1,500 manufacturers and some of the biggest companies in Rhode Island – support the Clear River Energy Center and natural gas pipeline expansion. It’s time to get behind an energy plan that works. To stay competitive – indeed, to grow our economy – we must lower our energy burden. Approving the Clear River Energy Center and bringing more natural gas to Rhode Island would help our businesses afford to stay here and remain competitive.

As state leaders chart our energy future, we implore them to take a pragmatic approach that recognizes the incredible strain of high electric costs. Let’s not threaten our economic recovery. •

Douglas Gablinske is executive director of The Energy Council of Rhode Island. William McCourt is president & CEO of the Rhode Island Manufacturers Association.

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