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Best company for the job? Bay State’s clean energy future hinges on a corporate giant with a controversial track record in other states
That would be Avangrid, which has been in the headlines lately for all the wrong reasons.
The U.S.-based subsidiary of Spanish utility behemoth Iberdrola, Avangrid last week had an unwelcome message for Gov.-elect Maura Healey.
Playing hardball, Avangrid said it now wants out of plans to build the 1,200-megawatt Commonwealth Wind project 22 miles off the coast of Martha’s Vineyard, having pushed unsuccessfully to renegotiate a higher price for the electricity its wind farm will generate.
Amazingly, for all the digital ink that has been spilled in the local press over the nascent off-shore wind industry, little to no attention has been paid to the serious issues, resulting in tens of millions in penalties, Avangrid has faced in other states.
After all, Avangrid may hold the key to whether Massachusetts can meet its carbon reduction goals in the coming decades, with the utility company also behind the separate, 800-megawatt Vineyard Wind project, slated to come online in 2024.
And that’s not all. Avangrid, through its Maine subsidiary, Central Maine Power, is battling to build a transmission line that will funnel Canadian hydro power onto the New England grid.
How to build an off-shore windfarm, per Uncle Sam
But while Avangrid is a relatively new and mostly unknown player in Massachusetts, other states in the region and across the country are well acquainted with the utility giant.
And the experience has been less than ideal.
Avangrid’s Maine subsidiary, CMP, scored dead last among U.S. utilities in 2022 in customer satisfaction, according to consumer research firm J.D. Power.
Off year? Well, not exactly. Rather, it was the fourth year in a row that Central Maine Power came in dead last on the national survey.
In fact, the power company is so unpopular, it has sparked a revolt by some Mainers, who are pushing a ballot question to replace CMP and the state’s other major utility, Versant, with a nonprofit power company.
“Basically, I would advise that if you have the opportunity to work with any other company than Avangrid, that you do just that,” Andrew Blunt, executive director of Our Power, which is leading the revolt against CMP, told Contrarian Boston.
Avangrid’s subsidiaries in Connecticut were recently hit with a $4.5 million fine, having failed to contact customers directly before seeking to garnish their wages, violating a pandemic moratorium on such aggressive bill collection practices.
Avangrid is appealing the fine.
All told, Avangrid subsidiaries in the Northeast have racked up more than $60 million in fines related to allegations of poor customer service and other issues over the past five years.
In fact, state regulators in New Mexico, after looking at Avangrid’s track record in Maine, Connecticut and other states, rejected its attempt to acquire the local utility, with the case now before that state’s highest court.
Mariel Nanasi, executive director of New Energy Economy, has been a tough critic over the years of Public Service Company of New Mexico, or PNM.
But Nanasi has played a critical role in the opposition to the merger, arguing she’d rather stick with PNM than take a chance with Avangrid.
“Everyone knows I am not a fan of PNM, but I would rather have PNM than Avangrid,” she said.
But even as New Mexico has kept Avangrid at arms’ length, Massachusetts regulators and utilities have gone in the opposite direction, choosing to rely on Avangrid to produce desperately needed carbon-free energy.
There are certainly market factors at work here in Avangrid’s push for higher rates for its off-shore wind farm, with world energy markets in turmoil since Russia invaded Ukraine earlier this year.
That said, the 11th-hour nature of Avangrid’s demands in Massachusetts for essentially more money, combined with its less than illustrious track record in other states, should raise some red flags.
But the watchdogs, such as they are these days in the local press and in state government, can’t be bothered to bark or even growl a little.
The Wu administration’s big gamble to boost the amount of affordable housing has risks, experience in other cities shows
Want to develop Boston’s next big condo or apartment tower? Well then, get ready to build a lot of affordable units alongside the luxury ones, for that is the cost of entry when it comes to doing business in the city.
All of which brings us to Mayor Michelle Wu’s decision last week to hike the amount of units that developers are required to rent or sell at below market rates in every new residential high-rise or building they put up.
The new standard is 20 percent, up from 13 percent before.
While city officials have worked overtime to downplay concerns the increase might lead to a drop in new housing production, the experience in Cambridge and San Francisco suggests that is just what may happen.
Photo by Brandon Griggs on Unsplash
In fact, the evidence comes right from one of the consultants the Boston hired to research the potential impact of a hike in the city’s affordable housing requirements.
Cambridge in 2017 began requiring 20 percent affordable units in all new housing projects built in the city. Over the next five years, the overall number of new residential units built in the city fell by a whopping one third, according to the report by RKG, the consultant in question.
That said, the number of affordable units did increase in Cambridge - by all of 2 percent.
Overall, roughly a thousand fewer apartments and condos were built in Cambridge over the past five years since the city boosted its affordability requirements. In the middle of a dire housing crisis, that’s a lot of housing lost.
A similar thing happened on the West Coast. San Francisco began requiring developers in 2016 to boost the number of affordable units in their projects to 25 percent. Construction dropped off markedly, falling from 1,800 to 2,000 new affordable units a year to less than 1,000.
While 1,500 affordable units came online in the San Francisco last year, it was still significantly below what it had been before.
Boston’s decision to demand more of developers - in this case, requiring them to build more units that will either lose money or be significantly less profitable - likely carries more risks than city officials are acknowledging.
“If you have heard about the fable of the golden goose, at some point you squeeze too hard,” said David Begelfer, principal at CRE Strategic Advisors. “It’s a pretty fragile market. Adding on costs substantially could be a real problem.”
Potential Trump charges: Long time in coming
Donald Trump has proven to be one of the most dangerous demagogues in American history.
And Trump is surely just the kind of cunning charlatan the founders had in mind when they laid the foundation of our system of government with its many checks and balances.
Sure, it can make it extremely difficult to get things done at times. But the diffusion of power among competing institutions so far has made it extremely hard for a would-be tin-pot dictator like Trump to successfully seize power.
But nothing is ever impossible, which makes Jan. 6 committee’s decision Monday to urge the Justice Department to take action and bring criminal charges against Trump so important.
The point is not to put Trump in a jail cell, which seems an unlikely outcome, but to disqualify him holding office ever again.
As the committee’s vice chairwoman, Rep. Liz Cheney, put it in the panel’s televised proceedings on Monday, Trump watched the riot on TV and showed no inclination of taking any action to put a stop to it.
“No man who would behave that way at that moment in time can ever serve in any position of authority in our nation again,” Cheney said, per the Washington Post. “He is unfit for any office.
Quick hits
Mount Monadnock is for beginners. But seriously, dude, you don’t climb it in the middle of December: “Oklahoma hiker rescued in snowy conditions after becoming lost on N.H.’s Mount Monadnock” Boston Globe
If progressives can't get along with themselves, how do they expect to connect with other Americans? "The Left's Fever Is Breaking," New York Times
Filling out her team: “Healey picks Patrick Tutwiler, former Lynn superintendent, for education secretary” Commonwealth Magazine
About Contrarian Boston
I have fielded emails over the past couple of months asking what Contrarian Boston is about.
Here’s a link to our mission statement – you can find it in the “about” section.
For a more prosaic, nuts-and-bolts description, read on.
An online newsletter, Contrarian Boston publishes every Monday, Wednesday and Friday. In Contrarian Boston you’ll find analysis of the day’s news, and original reporting as well.
Our focus is:
· Politics and all levels of governance, good and bad, with an emphasis on state and local, with some national mixed in;
· Economic growth and business, especially real estate, housing and new development projects;
· The media and why it does what it does;
· Education, from school board spats to the doings of multibillion-dollar university endowments;
· And whatever else catches our fancy.