Rhode Island Aces High Costs, Energy Disruption
Two competing trends have been roiling energy markets in Rhode Island and other states in recent years. Utilities have been moving toward a greater reliance on natural gas and renewable energy. But they’re now facing concerns over volatile energy prices and reliable “baseload power.”
Rhode Island is becoming particularly familiar with issues related to natural gas distribution. During January’s “Polar Vortex,” thousands of state residents were left without service because of problems stemming from low natural gas-system pressure and a lack of transmission supply.
What’s troubling is that these issues were not unique to Rhode Island. During January’s bitter cold snap, Xcel Energy urged customers in Minnesota to switch their thermostats as low as 55 degrees, and avoid the use of natural gas appliances, because extreme weather conditions had resulted in a “significant” strain on their natural gas system.
In Detroit, where temperatures hit a record minus-11 on Jan. 30, DTE Energy Co. asked customers to limit their electricity demand. Across parts of Michigan, Consumers Energy also called for customers to limit natural gas usage. The company even requested that General Motors suspend work at several manufacturing plants. And in the Chicago area, where wind chill may have hit as low as minus-50, wind turbines were forced to shut down. Bloomberg News reported that coal power plants in the region were forced to ramp up — “temporarily supplying about half the electricity needs in the two grids that serve most of the affected region.”
Following a tough winter, Rhode Island now faces challenging energy considerations. On the plus side, the state has some of the lowest per-capita energy consumption in the U.S., as well as some of the lowest emissions of carbon dioxide. And much of this is driven by natural gas plants that supplied 92 percent of the state’s net electricity generation in 2017.
At the same time, though, Rhode Island residents are paying the highest residential electricity prices in the nation. In January 2019, Rhode Island customers paid 22.67 cents per kilowatt-hour for electricity, almost double the national average of 12.47 cents.
Rhode Island’s situation — of high electricity costs and a growing dependence on natural gas and renewables — is mirrored in the experience of other U.S. states, particularly in the Northeast. ISO New England recently announced that the region’s “constrained fuel delivery infrastructure” — its gas pipelines — could lead to “insufficient energy available” during cold winter conditions.
Similarly, the heads of four major U.S. utility providers sent a letter to PJM Interconnection in January urging a reassessment of the value of coal and nuclear plants in supporting America’s power grid. They cautioned that a lack of “fuel security and fuel diversity” could limit overall electricity production.
What Rhode Island is experiencing is part of a deepening divide that pits reliable, affordable electricity against the constraints of potential emissions reductions. Overall, the United States has massive energy demands, and states like Rhode Island will have to balance the loss of sturdier forms of electricity generation — like coal and nuclear — against the goal of transitioning to wind power and natural gas. If recent experience is a guide, however, the loss of baseload power could prove disadvantageous in the face of unpredictable weather.
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- On April 30, 2019