Soaring electricity prices leave Massachusetts manufacturers struggling

Higher power bills contribute to plant closings

State lawmakers will soon finalize energy legislation that aims to promote efficiency and alternatives to fossil fuels. But as legislators iron out differences between recently passed House and Senate bills, businesses say they need to pay closer attention to what many firms consider the real energy crisis: spiraling electricity costs.

Massachusetts manufacturers pay the highest electricity prices in the continental United States, and the gap between their costs and those of competitors in other states is widening, according to the Energy Department. In 2006, the most recent annual data available, industrial users in Massachusetts paid more than double the average US rate, compared to 60 percent more in 2005. Only Hawaii has higher industrial rates.


As a result, Massachusetts manufacturers are struggling to stay in business. Electricity costs have contributed to the shutdown of several plants with the loss of an estimated 2,000 jobs, according to Associated Industries of Massachusetts, the state’s largest employer group.

Among them: a 200-year-old paper mill in Lee. The mill’s owner, Schweitzer-Mauduit International Inc. of Alpharetta, Ga., said electricity played a role in the decision to shutter the plant later this year and lay off about 160 workers. Power costs at the Lee mill jumped nearly 30 percent, or $2.8 million, over the past two years, with electricity accounting for 17 percent of manufacturing costs, said Bill Foust, vice president of administration.

That compares to 5 to 7 percent at Schweitzer-Mauduit’s other mills.

Boston Globe