Fuming over solar rules: State mandate adds $250M a year to electricity costs

Fuming over solar rules: State mandate adds $250M a year to electricity costs

Mar 30 - McClatchy-Tribune Regional News - Jay Fitzgerald Boston Herald

Massachusetts businesses are feeling burned by new solar-power rules that it now appears the state knew could cost electricity customers up to $250 million more a year.

Large firms, energy suppliers and at least one business group are furious about a new state mandate aimed at increasing the use and sale of solar power.

"We should be thinking of ways to lower the costs of doing business in Massachusetts," said Mike Hachey, director of eastern commercial operations for TransCanada Corp., an energy retailer to hundreds of local hospitals, colleges and municipalities. "This program goes in the opposite direction."

Businesses complain that the new mandate disrupts existing energy contracts and introduces unclear quotas for future solar use. But their biggest gripe is the increased costs of electricity associated with solar-power mandates at a time when the economy is weak and electricity prices are already higher in Massachusetts than in other parts of the nation.

Earlier this year, the state imposed "emergency" regulations as part of Gov. Deval Patrick's push to increase solar power in Massachusetts -- and to decrease use of electricity generated by pollution-spewing fossil fuels purchased from foreign sources.

Ian Bowles, Patrick's secretary of energy and the environment, previously dismissed as "hyperbole" estimates that solar mandates could end up costing electric customers billions of dollars.

But the state's own Department of Energy Resources has calculated that the new "solar carve out" rules could cost about $250 million a year, starting in 2015 and staying above that level for five years, before slowly decreasing later next decade. That's a worst-case scenario -- but even "gentler" predictions show the cost approaching $250 million in future years.

Bowles countered yesterday that the solar mandates will still account for less than 1 percent of overall energy costs and usage in Massachusetts.

The monthly price per average homeowner will be about 50 cents to 60 cents over the years, he claimed, adding that the price of solar energy is dramatically falling.

But energy suppliers aren't happy. "This is a fairly expensive way to produce power," said Chris Kallaher, director of government affairs at Direct Energy, an electricity retailer.

jfitz@bostonherald.com