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44 2014 Central Mass By The Numbers • Worcester Business Journal www.wbjournal.com TECHNOLOGY & ENERGY T his fall, National Grid, the utility serving much of Central Massachusetts, announced that its residential electrical rates this winter will be 37 percent higher than last year, and businesses will face a similar hike. The big reason for the increase is clear: Natural gas, the fuel that produces most of New England's electricity, is in high demand while pipelines carrying gas into the region are at full capacity. National Grid said in its press release that, when electrical gen- erators are running at peak demand, some generators are forced to buy gas at a premium on the spot market, switch to other fuels or temporarily stop running. All those moves boost the wholesale price of electricity. So, what can businesses — particularly those that use a lot of electricity — do to keep their costs down? Jack Healy, director of operations at the Worcester- based Massachusetts Manufacturing Extension Partnership, said he advises plant operators to look closely at how they use energy. "If you ask the average manufacturer, 'What's your conservation program for energy?,' they don't have one," he said. Healy said they should, and not just because of the short-term jump in rates this year. Over the long term, he said, even if the supply of natural gas rises, the cost of electricity will remain a problem for customers. That's because New England's overall energy demand has been falling in recent years, but utilities still need the funds to maintain their infrastructures, forcing them to jack up the price for each kilowatt hour. "We're going to see energy become more and more of an issue," Healy said. Aside from conservation, another way businesses can act on energy costs is by looking at how they buy power. One person who helps them do that is Bill O'Brien, president of Risk Services Group in Shrewsbury. O'Brien said many businesses, especially small ones, don't want to spend a lot of time worrying about how they buy energy, but, as prices rise, more are thinking of making changes. "I think we are seeing a lot of activity because of the rates proposed by National Grid for the coming win- ter period," he said. O'Brien said his company targets its services at energy customers that are willing to spend a bit of time considering their options for natural gas and electricity supplies. While most households and small businesses simply use the basic supply provided by utilities such as National Grid, many larger companies buy from other suppliers. Once you start looking at different sources, O'Brien said, there are lots of options to choose from. Some suppliers sign contracts that lock in prices for any- where from one to five years into the future. Some change the price hourly. O'Brien said companies should consider energy supplies much as they do financial investments, thinking about their risk toler- ance and learning a little about how the markets work. On the other hand, he said, just like with buying stocks, it's all about having a solid strategy and not trying to time the market. "We have a different perspective on the market than a lot of people," O'Brien said. "We try to be thoughtful in looking at risk." In one example of a trade-off, O'Brien said a cus- tomer buying a fixed-rate contract from an outside supplier will certainly beat the utility's rates in December and January, when prices are highest, but they'll probably end up paying more in the spring or fall. Whether the costs even out over time, and wheth- er it's helpful to keep monthly costs stable over the course of the year, are open questions companies need to think through. For larger firms, it may be possible to diversify supply options to smooth out the risks involved in any one contract. O'Brien said it takes some effort to think through the options, but in many cases it may be worth it. "Energy's a pretty big cost for most businesses," he said. n By Livia Gershon Special to the Worcester Business Journal Message to business: Take more control on energy Sources: U.S. Green Building Council, PricewaterhouseCoopers/ National Venture Capital Association, U.S. Patent and Trademark Office, ISO New England Venture capital investment in Massachusetts biotechnology firms in 2013, making it four out of five years in which VC investment in the industry exceeded $1 billion. $1.01B Number of LEED-certified (Leadership in Energy & Environmental Design) buildings in Worcester, representing close to one-third of all LEED buildings in Central Massachusetts. 16 QUICK HITS More clean-energy jobs Before leveling off this year, the number of clean-energy jobs in Central Massachusetts grew nearly 12 percent from 2012 to 2013. Meanwhile, the state saw double-digit percentage growth in the last year in installation and maintenance jobs. central 15,518 11.9% Western 11,116 8.4% northeast 36,155 11.7% Southeast 17,205 14.3% MA 79,994 11.8% Region Jobs Growth Source: 2014 Clean Energy Industry Report, prepared for the Massachusetts Clean Energy Center by BW Research Partnership Note: Regional breakdowns are as follows: Central: Worcester County and part of Middlesex County. Western: Berkshire, Hampden, Hampshire and Franklin counties. Northeast: Essex, Suffolk and Norfolk counties and part of Middlesex County. Southeast: Plymouth, Bristol, Barnstable, Dukes and Nantucket counties. n JoB GRoWtH n tYPeS oF cLeAn-eneRGY JoBS in MASS. Sales and distribution 21,637 23,546 8.8% installation and maintenance 19,031 21,454 12.7% engineering and research 17,458 17,514 0.3% Manufacturing and assembly 13,458 14,596 8.5% other 8,409 11,262 33.9% Types 2013 2014 Growth Source: 2014 Clean Energy Industry Report, prepared for the Massachusetts Clean Energy Center by BW Research Partnership Note: "Other" category includes legal, finance, and other services Number of Central Massachusetts communities with at least one LEED- certified building. 20 Number of patents awarded to four companies – EMC, Boston Scientific, The MathWorks and Bose – in 2013, a jump of 99 over 2012. 667 Percentage of fuel in Massachusetts that comes from natural gas, higher than the national figure (40 percent). 49%