Energy policy in Massachusetts

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Energy policy in Massachusetts
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Quick facts
Energy department: Executive Office of Energy and Environmental Affairs
State population: 6.7 million
Per capita income: $54,687
Energy consumption
Total energy consumption: 1,395 trillion BTU[1][2]
Per capita energy consumption: 211 million BTU
Energy spending
Total state energy spending: $27,248
Per capita energy spending: $4,124
Residential natural gas price: $13.24 per thousand cubic foot
Residential electricity price: 15.63 cents per kWh
See also
Energy on the ballot
Statewide fracking on the ballot
Local fracking on the ballot
Policypedia
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Energy Policy Project
Energy policy in the United States
Energy use in the United States
Energy terms and definitions
Energy policy in Massachusetts
Fracking in Massachusetts
Energy policy in Massachusetts depends on geography, natural energy resources, how electricity is generated, how much energy consumers use, politics and the influence of groups such as environmental and industry organizations. Decisions by policymakers, such as state and local governments, utilities and regulatory agencies, affect all citizens economically and environmentally, and are generally geared toward providing reliable, affordable energy. The cost of energy affects not only home heating and electricity bills, and thus disposable income, but also economic growth, including jobs, investment and the cost of doing business in the state.

How energy is produced and consumed also has an impact on the environment and pollution. Energy policy in Massachusetts is based around balancing economic growth, quality of life and resource protection.[3]

Energy policy involves tradeoffs between providing an affordable, consistent energy supply on the one hand, and limiting pollution and protecting the environment, on the other. How states attempt to balance these two differs between states, and often boils down to costs to consumers versus costs to the environment. This article provides general energy information about the state as the context within which energy policy is made, as well as information about major legislation and public and private groups that play a role in setting energy policy in the state.

See also: Energy policy in the United States for more information on energy policy.
See also: Fracking in Massachusetts

Energy overview

State facts

Below are quick facts about Massachusetts's energy climate.

Massachusetts

  • has three liquefied natural gas import terminals.
  • generated 68 percent of its electricity from natural gas and 11 percent from coal, in 2011.
  • has the third highest per capita personal income in the nation.
  • uses more electricity than it produces.
  • has renewable resources in the forms of wind, solar, hydropower and biomass.
  • has no coal mines, or petroleum refineries.
  • produces about an eighth of its net electricity generation from the Pilgrim nuclear plant.[4]

In Massachusetts

  • about 6 percent of in-state net electricity generation came from renewable energy resources, mainly biomass and hydroelectric sources.
  • more people use fuel oil as their main space heating fuel than the national average.
  • over half of the energy produced in Massachusetts is from nuclear power.
  • one-third of its energy is consumed by the transportation sector.
  • most of the energy consumed is in the form of natural gas.
  • has the eighth highest electricity prices in the nation.[4]

Available energy resources

Massachusetts has no traditional energy resources such as oil, coal or natural gas. This lack of traditional energy resources means Massachusetts imports all the coal, natural gas and petroleum consumed in the state.[4]

Massachusetts' in-state generation from renewable sources comes almost entirely from biomass and small hydroelectric facilities. Wind and solar resources are being expanded around Cape Cod and other areas that are thought to be well-suited for development. Currently there are only a few solar and wind farms in the state.[4]

Consumption and prices

As shown on the pie chart to the right, in 2011 roughly one-third of Massachusetts' energy use was for transportation, and one-third by the residential sector --for heating, cooling, lighting and other functions. Most of the energy used in the state is in the form of natural gas, which is due to the fact that nearly half of Massachusetts residents use natural gas to heat their homes. The next largest source of energy is petroleum, mainly in the form of gasoline and fuel oil. Fuel oil is used to heat homes, and about 30 percent of homes in Massachusetts use fuel oil.[4]

Energy consumption in Massachusetts
MA energy sector usage chart.png

Legend[5]
     Transportation       Residential     Industrial       Commercial
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The price of gasoline in Massachusetts generally follows the national average, though it is often slightly higher.[6] According to the U.S. Energy Information Administration's February 2014 report, the federal excise tax is 18.40 cents per gallon of gasoline and 24.40 cents per gallon of diesel fuel. In addition to that, Massachusetts collects a total tax of 26.51 cents on every gallon of gasoline, gasohol and diesel fuel, which ranks it 29th highest in the U.S.[7][8] Reformulated gasoline is required by the state in order to limit ozone formation.[4]

Comparisons tables

The table below compares Massachusetts' consumption and spending for energy, as well as prices for natural gas and electricity, and carbon emissions to those of Maine, which has similar population, resources and consumption needs because of climate and geography. Also given are the U.S. averages and the state rankings. All rankings are from highest to lowest, so, for example:

  • Massachusetts' rank of 49th in natural gas prices means that the price of natural gas in Massachusetts is much lower than the price in Maine which ranks ninth.
  • Maine's price for electricity (ranked 12th) is similar to Massachusetts, which has a rank of eighth.
  • Maine's rank of 44th in carbon emissions means that carbon emissions are lower in Maine than in Massachusetts, which has a rank of 29th.
  • Likewise, per capita income in Massachusetts is higher than the national average, and very different than in Maine, which at 29th ranks 26 places behind Massachusetts’ ranking of third in per capita income. A ranking of third means Massachusetts has the third highest per capita income in the United States.
  • Per capita energy consumption in Massachusetts (at 46th) is much lower than the per capita energy consumption in Maine (at 26th).
  • Per capita energy spending in Massachusetts is much lower than in Maine because it ranks 36th highest to Maine's ranking of 10th highest.
Consumption and Expenditures Comparisons Summary
Type MassachusettsMaineU.S. Figures
FigureU.S. Rank*FigureU.S. Rank*Totals
Population6.7 million141.341313.9 million
Per Capita Income Average$54, 6873$39,48129$42,693
Total Consumption1,395 trillion BTU28413 trillion BTU4397,301 quadrillion BTU
Per Capita Energy Consumption211 million BTU46311 million BTU26312 million BTU
Total Spending on Energy$27,248 million16$7.317 million41$1,394,088 million
Per Capita Spending on Energy$4,12436$5,50810$4,474
Price of Residential Natural Gas, dollar per thousand cubic feet$13.2449$15.319$12.48
Price of Electricity, cents per kWh15.63814.451212.31
Total Carbon Dioxide Emissions, million metric tons (2010)732918.5445,631
*Rank is from highest to lowest.

The drastic difference in per capita spending between the two states is due to the different population sizes in the two states and the high price of natural gas and electricity in Maine. Natural gas prices in Massachusetts are some of the lowest in the nation.[4]

See also: State Energy Rankings to compare all 50 states
Consumption of energy for heating homes in Massachusetts
Source Massachusetts 2011 U.S. average 2011
Natural gas 49.1% 49.5%
Fuel oil 31.8% 6.5%
Electricity 14% 35.4%
Liquid Petroleum Gases (LPG) 2.6% 5%
Other/none 2.4% 3.6%

Of the homes in Massachusetts, 49 percent use natural gas as their heat source, slightly less than the national average. Over 30 percent of homes use fuel oil to heat their homes, which is significantly greater than the national average.[4]

Production and transmission

Energy production by type in Massachusetts, 2011
Type Amount Generated
(trillion BTU)
% of State % of USA
Nuclear 53.2 52.67% 0.64%
Other 47.8 47.33% 0.67%

Over half of the energy produced in Massachusetts is from nuclear power, with the remainder being generated from what the U.S. Energy Information Administration classifies as 'other,' which is "assumed to equal consumption of all renewable energies except biofuels."[4]

Where electricity comes from in Massachusetts[9]
Type Amount generated (MWh) % of state** % of U.S.**
Petroleum-fired 9,000 0.34% 0.03%
Natural gas-fired 1,978,000 74.28% 0.2%
Nuclear 387,000 14.53% 0.05%
Hydroelectric 66,000 2.48% 0.02%
Other renewables 156,000 5.86% 0.08%
Total net electricity generation 2,663,000 100% 0.06%
**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.

In 2011, the electricity consumed in Massachusetts was produced mainly from natural gas. Two-thirds of the total generation of electricity in the state comes from natural gas, and considering the low price of natural gas in the state this makes economical sense. Nuclear power generates the next largest amount of electricity in Massachusetts. On peak summer days the New England grid may use petroleum and coal resources to meet nearly one-fourth of its needs.[4]

Massachusetts has been part of the Independent System Operator-New England (ISO-NE) regional electricity market since 1999, which manages the electrical transmission grid in the state. Almost all of the state's energy generation comes from independent power producers. The Department of Public Utilities regulates four investor owned electric companies in Massachusetts. There are 96 electric utilities that operate in Massachusetts, 12 are competitive suppliers and 84 have an electric brokers license. The brokers and suppliers are licensed in different ways, but do the same essential tasks.[10] There are 49 natural gas utilities in Massachusetts, five are gas suppliers, while the other 44 are retail agencies. The difference between these types of suppliers, like electrical suppliers, is in the licensing process.[11]

Energy policy

Policy Issues

Some research on the impact of Renewable Portfolio Standard (RPS) legislation in Massachusetts shows that the RPS has actually discouraged new generation of renewable energy generated by Massachusetts because the standard can be met more cost-effectively by purchasing renewable energy certificates (RECs) from neighboring states that share the same transmission grid.[12]

See also: Fracking in Massachusetts

Energy policy is made, executed and influenced by many organizations, both public and private, and is codified in the laws and regulations of the state. Each state’s energy policy involves tradeoffs in which energy production and prices are weighed against environmental concerns and efficiency. Each state’s energy policy involves tradeoffs in which energy production and prices are weighed against environmental concerns and efficiency. Massachusetts established its RPS in 2003 when the requirement was just 1 percent of energy being generated by renewable sources that year. The requirement has since been increased, and the current goal is 9 percent by the end of 2014. Massachusetts is slightly more strict about what types of sources count towards the nine percent goal than are other states. The RPS goal excludes older forms of renewable generations because they fail to meet certain efficiency requirements. Currently technologies that count towards the goal include, solar, renewable fuels and hydroelectric, among others. Utilities comply with the RPS mandate by either producing or purchasing renewable energy sources and then selling that energy to consumers.[13] A report published by the Harvard Kennedy School, on the impact of RPS legislation in Massachusetts, shows that the RPS has actually discouraged renewable energy generation by Massachusetts. Instead the standard is being met more cost-effectively by purchasing Renewable Energy Certificates (RECs) from neighboring states that share the same transmission grid.[14] There are differing estimates about the economic impact of RPS mandates in terms of costs that may affect prices and jobs, as well as the impact on the environment and pollution. Thus, for example, there are many new studies of what is called the "rebound effect" which refers to the fact that "some of the theoretically estimated gains in energy efficiency will be eroded as consumers consume additional goods and services."[15][16][17][18][19]

In 2013, Massachusetts was ranked number one in the nation in energy efficiency by the American Council for an Energy-Efficient Economy.[20][21] There are differing estimates about the economic impact of these mandates in terms of costs that may affect prices and jobs, as well as the impact on the environment and pollution. Thus, for example, there are many new studies of what is called the "rebound effect" which refers to the fact that "some of the theoretically estimated gains in energy efficiency will be eroded as consumers consume additional goods and services."[22][23]

Major legislation

  • The Green Communities Act (2008) strengthened existing RPS goals, and also created the Green Communities Division that helps over 350 Massachusetts towns find clean energy solutions that reduce long-term energy costs by providing technical assistance and financial support.[24]
  • The Global Warming Solutions Act (GWSA), was signed by Governor Patrick in August of 2008, and created a goal of reducing heat-trapping emissions to levels an an attempt to avoid the worst effects of global warming. The act requires reductions from all sectors of the economy to reach a target of a 25 percent reduction of greenhouse gas emissions by 2020 and an 80 percent reduction by 2050.[25]
  • The Ocean Management Plan (2009) protects marine habitats and natural resources in Massachusetts' waters, while opening up some areas to development for renewable resources such as wind and tidal energy. The act sets up three areas: prohibited areas where most uses and activities are prohibited, renewable energy areas where only renewable energy use is allowed, and multi-use areas where there are fewer regulations on what activities are allowed.[26]
  • Massachusetts voluntarily follows the federal Clean Air Act (1990) guidelines that mandate the use of reformulated gasoline (RFG). RFG is gasoline that has more oxygen and other additives in it than normal gasoline. The additives and extra oxygen cause different chemicals to be emitted when the gas is burned than does normal gasoline. These chemicals don't contribute to smog as much as traditional gasoline.[27]
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State energy policy

State fracking policy

Energy policy terms

Fracking in the U.S.

Energy use in the U.S.

Energy policy in the U.S.


See also
Local fracking on the ballot

Statewide fracking on the ballot

Ballot measures

Below is a list of energy related ballot measures across Massachusetts. These ballot measures cover issues from fracking bans, to utilities and related tax questions.

Government agencies and committees

  • The Executive Office of Energy and Environmental Affairs is a part of the executive branch of the Massachusetts government. The office coordinates regulatory efforts on energy resources and environmental protection. The office has several departments that operate within it.[29]
  • The Department of Energy Resources (DOER) manages energy resources and promotes efficient and clean use of the state's resources.[30]
  • The Massachusetts Public Utilities Commission (PUC) is a three member board that regulates electric power, natural gas, and water utilities in Massachusetts. The PUC runs the Department of Public Utilities (DPU), which is in charge of regulating some of the investor owned utilities in Massachusetts. The DPU ensures that utility consumers are provided with reliable and low cost service.[31][32]
  • The Department of Energy and Environmental Affairs oversees energy and environmental issues in the state. The department is managed by the Secretary of Energy and Environmental Affairs. There are six regulatory agencies under this department: the Departments of Environmental Protection, Agriculture, Public Utilities, Energy Resources, Conservation & Recreation and Fish & Game.[33]

Major organizations

  • The Massachusetts Clean Energy Center (MassCEC) has dedicated itself to assisting clean energy technologies, companies and projects in Massachusetts while also creating high-quality jobs and long-term growth for the economy. MassCEC has helped support municipal clean energy projects, and invested in residential, as well as commercial, renewable energy installations in order to create a robust marketplace for clean energy.[34]
  • The New England Clean Energy Council (NECEC) is a regional non-profit organization that serves the New England area by representing clean energy companies and entrepreneurs through programs and initiatives that help businesses at every stage of development. The council provides funding and workforce development services such as training for employees and internships for students. The group also advocates for energy policy at the local and national level that it believes will accelerate the region's new energy economy.[35]
  • Massachusetts' Businesses for Clean Energy puts pressure on government officials in Massachusetts to invest in new, clean, and renewable efficient energy that is locally grown, instead of traditional energy resources that are not as efficient or good for the environment as the newer renewable energy resources.[36]

In the news

This section displays the most recent stories in a Google news search for the term "Massachusetts+Energy+Policy"

All stories may not be relevant to this page due to the nature of the search engine.

Massachusetts Energy News Feed

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See also

External links

References

  1. These figures come from the EIA State Profiles and Energy Estimates, Massachusetts Overview. Statistics for population and per capita income are for the year 2012; consumption and spending estimates are for 2011; and prices are for October 2013. Updated pricing information is available on the state's EIA profile. Prices will be updated on this page biannually.
  2. U.S. Energy Information Administration, "Massachusetts Overview," accessed February 5, 2014
  3. Executive Office of Energy and Environmental Affairs, "2013-2015 Strategic Plan," accessed February 28, 2014
  4. 4.0 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 U.S. Energy Information Administration, "Massachusetts Profile Analysis," December 18, 2013, accessed March 15, 2014
  5. This chart depicts the state's energy consumption as reported by the EIA for 2011. Click the image to enlarge.
  6. To compare current gasoline prices in Massachusetts to the U.S averages, go to GasBuddy.com
  7. U.S. Energy Information Administration, "Petroleum Marketing Monthly," February 2014, accessed February 14, 2014
  8. The Tax Foundation, "State Gasoline Tax Rates, 2009-2013," March 21, 2013
  9. These figures come from the EIA State Profiles and Energy Estimates U.S. Energy Information Administration, "Massachusetts Overview," accessed February 5, 2014
  10. Executive Office of Energy and Environmental Affairs, "Electric Suppliers," accessed March 2, 2014
  11. Executive Office of Energy and Environmental Affairs, "Gas Suppliers," accessed March 2, 2014
  12. Harvard Kennedy School Review, "Looking for Regional Gains: Do Renewable Portfolio Standards Really Work?," November 27, 2013
  13. Database of State Incentives for Renewables and Efficiency, "Renewable Portfolio Standard," April 17, 2013
  14. Kennedy School Review, "Looking for Regional Gains: Do Renewable Portfolio Standards Really Work?," November 27, 2013
  15. International Risk Governance Council, "The Rebound Effect: Implications of Consumer Behavior for Robust Energy Policies," accessed March 3, 2014
  16. Scientific American, "How Bad Is the Rebound from Energy Efficiency Efforts?," May 21, 2013, accessed March 3, 2014
  17. According to a report called "The Status of Renewable Electricity Mandates in the States," by the free-market Institute for Energy Research, the cost of electricity in states with RPS were on average 38 percent higher in 2010 than in states without a RPS.
  18. Institute for Energy Research, "The Status of Renewable Electricity Mandates in the States," accessed March 24, 2014
  19. Manhattan Institute, "The High Cost of Renewable-Energy Mandates," February 2012
  20. For a full explanation of how the ACEEE calculates this ranking see the executive summary of their report.
  21. American Council for an Energy-Efficient Economy, "State Energy Efficiency Policy Database," accessed February 27, 2014
  22. International Risk Governance Council, "The Rebound Effect: Implications of Consumer Behavior for Robust Energy Policies," accessed March 3, 2014
  23. Scientific American, "How Bad Is the Rebound from Energy Efficiency Efforts?," May 21, 2013, accessed March 3, 2014
  24. Executive Office of Energy and Environmental Affairs, "Green Communities," accessed March 2, 2014
  25. Executive Office of Energy and Environmental Affairs, "Massachusetts' Progress towards Reducing Greenhouse Gas (GHG) Emissions by 2020," accessed March 2, 2014
  26. Pacific Energy Inc., "Massachusetts' Ocean Management Plan," accessed March 2, 2014
  27. Executive Office of Energy and Environmental Affairs, "About Reformulated Gasoline (RFG)," accessed March 2, 2014
  28. The General Court of Massachusetts, "Joint Committee on Telecommunications, Utilities and Energy," accessed March 2, 2014
  29. Executive Office of Energy and Environmental Affairs, "Welcome," accessed March 2, 2014
  30. Executive Office of Energy and Environmental Affairs, "Department of Energy Resources (DOER)," accessed March 2, 2014
  31. Executive Office of Energy and Environmental Affairs, "Department of Public Utilities," accessed September 24, 2011
  32. Executive Office of Energy and Environmental Affairs, "Department of Public Utilities (DPU)," accessed March 2, 2014
  33. General Laws of Massachusetts, "Executive Office of Energy and Environmental Affairs - Creation" accessed September 24, 2011
  34. Massachusetts Clean Energy Center, "About MassCEC," accessed March 2, 2014
  35. New England Clean Energy Council, "About Us," March 2, 2014
  36. Massachusetts' Businesses for Clean Energy, "About Massachusetts' Businesses for Clean Energy," accessed March 2, 2014