Congressmen Neal And Kennedy Discuss Energy Costs In Lee | WAMC

Congressmen Neal And Kennedy Discuss Energy Costs In Lee

Jun 8, 2015

Massachusetts Congressman Richard Neal visited a specialty paper company he says is succeeding despite high energy costs this morning. The Democrat toured the facility with Congressman Joe Kennedy of eastern Massachusetts.

The congressmen spent about 45 minutes walking around Onyx Specialty Papers in South Lee speaking with company leaders. Operating out of a mill built in 1806, Onyx employs more than 150 people with an annual payroll exceeding $10 million. During a forum in February, co-owner and president Pat Begrowicz said the company’s 2014 electricity bill was $2.4 million, making energy the third highest expense behind raw materials and labor.

“We currently use about half the electricity that we used at this mill 10 to 12 years ago, but we pay 20 percent less even bringing that forward to 2014 dollars,” Begrowicz said. “We have not seen a drop in the cost of electricity despite half the consumption.”

Congressman Neal adds the company has indicated it could hire an additional 70 people beyond the planned hiring of 25 if it could rein in its energy costs. 

“Here in New England we have high energy costs that are impeding economic growth,” Neal said. “When you look at energy costs in the Berkshires, they’re more outside the mainstream than the rest of state and it’s not a coincidence that it’s the only part of the state that consistently loses population.” 

Neal invited fellow Democrat Joe Kennedy to his district to learn more about restrictions energy costs are placing on area businesses. In office since 2013, Kennedy serves on the House Committee on Energy and Commerce. He says energy markets aren’t functioning as they should because of a lack of capacity and a coherent regional strategy to come up with a long term policy that involves investments in renewable energy.

“The rest of the country does use their own different regional strategies,” Kennedy said. “Some aspects of federal legislation won’t solve some of these problems. But it is where getting together as a region and coming up with a regional energy strategy that understands ‘Yes we want to make these investments and need to make these investments’ into a clean energy future. But at the moment the cost and pricing on some of those models isn’t economically competitive. So how do we make those investments in the short term and also recognize we need a base load energy for when the sun doesn’t shine and the wind doesn’t blow.” 

Kennedy says a planned $5 billion pipeline being proposed by Kinder Morgan from Pennsylvania to Massachusetts can be a piece of the solution. He also said plans to bring hydroelectric power from Quebec should be looked at while the concerns of local residents need to be included in those discussions.

Recognizing capacity is an issue, Neal says he doesn’t think the Kinder Morgan natural gas pipeline is a part of the solution as currently proposed.

“The issue’s been handled by Kinder Morgan about as badly as any issue I remember in my time,” Neal said. “Part of it is not to surprise people. They’ve constantly subjected the citizenry to these surprises and I think they’ve been slow on answers. Much of the controversy that they find themselves is one that they created.”

Opposition to the pipeline has been strong in western Massachusetts, evident at meetings and open houses held by Kinder Morgan. Opponents question whether the gas carried through the pipe will be exported. State Senator Ben Downing says there needs to be more ownership of the energy markets including breaking out of a restrictive regulatory framework.

“We’ve essentially left our energy future up to these forward capacity markets,” Downing said. “There’s a reason that we don’t have a strategic plan in the region for energy…it’s because we’ve allowed it to just be auctioned off through these markets. We haven’t developed it in a way that we ought to, to be able to work together among the regions to meet our needs in a balanced way.”

Monday afternoon, Neal and Kennedy toured Springfield’s STEM Middle Academy with Daniel Warwick, the superintendent of Springfield Public Schools. Later the congressmen met with leadership of Baystate Medical Center. Facing a $22 million budget gap, the largest employer in western Massachusetts announced last week it was laying off 24 employees, cutting hours for 17 workers and leaving 45 vacant positions unfilled. Here’s Neal.

“They are one of the largest Medicaid providers in all of New England,” Neal said. “Trying to expand opportunity for them to be reimbursed at a greater rate would be a consideration. They continue to expand. They continue to grow.”