For Immediate Release - November 09, 2011

AG Coakley Focuses on Costs and Benefits of Green Communities Act

In Testimony to Legislature, AG Urges Greater Transparency and Competition In Order To Reduce Costs

BOSTON – Today, Attorney General Martha Coakley testified on the impact on consumers of the Green Communities Act (GCA), arguing that the benefits of the GCA should be maintained while also working to reduce the costs of the programs. Coakley called for measures to increase competition and transparency, provide clearer, robust definitions of cost‑effectiveness, and offer fewer sweetheart incentives for utility companies.

The oversight hearing on the Green Communities Act (GCA) of 2008 was held before the Joint Committee on Telecommunications, Utilities and Energy at the State House this morning.  The purpose of the hearing was to review the impact of the GCA and evaluate whether any additional changes to the plan are necessary.  The Green Communities Act was comprehensive energy reform legislation enacted in 2008 to maximize the benefits of renewable and alternative energy, and to improve energy efficiency for ratepayers across the Commonwealth.          

“The GCA has provided a number of benefits, including increased energy efficiency programs that led to savings for many consumers,” AG Coakley said. “But the GCA programs also have escalating costs that will cause an increase in rates. We must provide more transparency and competition to mitigate these costs.”

In her testimony, AG Coakley discussed the GCA’s overall impact on consumers in the Commonwealth since 2008.  She outlined a number of benefits including enhanced consumer protections and energy efficiency programs which will save ratepayers billions in the long-term.

AG Coakley also cited an analysis that the GCA programs will cost more than $4 billion over the next four years, which will cause the total delivered costs of electricity to rise an estimated seven percent for consumers.

To increase competition and transparency, Coakley recommended that all long-term renewable contracts should be subject to competitive procurement. She also argued that more effort should be made to expose the true costs of energy, including costs that are hidden as subsidies as well as environmental costs.

She also stated that statutory or regulatory changes should be made to subject all programs to rigorous cost-effectiveness standards and, when possible, be required to be implemented at the least cost to consumers.  Further, the AG's Office is concerned with policies that favor more costly technologies and would like to see technology neutral policies that ensure that the least expensive alternatives are implemented first.

AG Coakley also outlined what she called “sweetheart incentives” for utilities in the GCA. For instance, companies are allowed to receive incentives for meeting energy efficiency goals. Utility companies also receive a bonus 4% on the cost of any long-term renewable contracts even though the entire cost of those contracts are already passed through to consumers. Coakley urged the Legislature to re-evaluate these incentives and to implement changes to protect the interest of ratepayers.

The Attorney General’s Office of Ratepayer Advocacy is by statute the utility ratepayer advocate for Massachusetts consumers and is authorized to intervene in or institute administrative and judicial proceedings on behalf of consumers in connection with any matter involving the rates, charges, prices or tariffs of any gas or electric company doing business in the Commonwealth.