'Low' energy prices still highest in nation

• Published in: Telegram & gazette
• Main Author: Borowski, Benjamin
• Format: Newspaper Article
• Language: English
• Published: Worcester, Mass GateHouse Media, Inc 03.02.2016
• ISSN: 1050-4184

After record-shattering electricity prices during the Polar Vortex, some dangerously allege that "low" electricity prices during some points last year mean New England is safe. A foreign cartel crashing oil prices isn't our "market" working. Neither is an electric reliability subsidy for oil called the Winter Reliability Program, so far approved through 2018. Unseasonably warm holiday weather is pure luck. In 2015, our electricity "market" reflected OPEC's decision to not curtail oil production despite low global demand, which crashed oil prices from over $100 to less than $50 per barrel. The contract price of liquefied natural gas (LNG), indexed to oil, also nearly halved. Oil and LNG are the fuels used by our most expensive "peak" electric generators. We use them to meet the highest increments of demand, and they set the electricity price for the market. Lower fuel costs for them means lower electricity prices. But oil is dirty, volatile, imported from Venezuela, and burned in the least-efficient generators. LNG is produced in countries like Yemen (where environmental regulation is probably a little light), then it's liquefied, stored at about -260 degrees, transported by supertanker, and re-gasified before consumption. Each step adds costs and emissions. Why are these fuels determining the fate of our electricity market?