Worcester Business Journal

4 Worcester Business Journal • June 6, 2016 www.wbjournal.com T he controversial Kinder Morgan pipeline that was supposed to give Massachusetts relief from a constrained natural gas supply has been cancelled. While its end puts a halt to the debate surrounding it, the larger issue of high energy costs for the state remain. "We're so much more expensive than other parts of the country, and it does put us at a competitive disadvantage and our concern is we will continue to lose employers to other states that are active- ly recruiting," said Roy Nascimento, president and CEO of the Fitchburg- based North Central Massachusetts Chamber of Commerce that had sup- ported the pipeline in order to help relieve cost constraints. What was it? The Northeast Expansion Project pipeline would have increased the amount of natural gas flowing into the region from Pennsylvania, thus bringing down cost for the fuel that sees high demand in the winter for both heating and electricity production. The price of natural gas is a key factor in the price of wholesale power because the fuel gener- ates 49 percent of the electricity pro- duced in New England, according to regional electric grid administrator ISO New England. However, the pipeline had created controversy over its environmental impact, along with the implication that bringing more natural gas into the region would increase Massachusetts' reliance on fossil fuels. Why should I care? Because manufacturers and other heavy power users care, especially in North Central Massachusetts that has a high number of Central Massachusett's manufacturers. For these businesses, power is a huge portion of their overall costs, said Nascimento. "Energy goes up one penny, and that's a million dollars a year more in expenses for a fairly large manufacturer," he said. These high costs make the state less competitive in all areas of manufactur- ing, which includes the much-touted biotech industry. What now? Nascimento is in favor of moving for- ward in any kind of area that will cut the costs of electricity to businesses. This includes natural gas, he said, but also alternative energy sources such as solar, wind and hydro. A concern in the state is figuring out where to site these alternative energy sources, as wind farms and even solar farms have had location issues, he said. Ultimately, Nascimento said, the state needs to figure out a way to relieve the power-price differential, which will be increasingly difficult as more coal and nuclear power plants come off line. "Long term, I think we will see energy prices increase until we find a solution to our energy needs," he said. n Staples CEO stepping down as firm looks beyond office supplies Following the failed merger with Office Depot, long-time Staples, Inc. CEO Ron Sargent will step down on June 14. Sargent, who has led the company for 27 years, has agreed with the board of directors to step down at the com- pany's annual meeting. Shira Goodman, Staples' president of North America Operations will serve as the interim CEO. Sargent will continue to serve as a director and non-executive chairman through Staples' 2016 fiscal year ending on Jan. 28. SpencerBANK and Southbridge Savings Bank merger approved The merger of the holding compa- nies of SpencerBANK and Southbridge Savings Bank has been approved and will operate under the name SSB Community Bancorp MHC. The merger has been approved by the board of trustees of each bank's par- ent mutual holding company and has received the required regulatory approvals, the companies reported. The combined mutual holding com- pany will have close to $1 billion in assets and $108 million in equity and represent a branch network of 15 offic- es located throughout Central Massachusetts, according to a release from the banks. By merging the hold- ing companies, as opposed to the banks, the two entities will be able to combine resources while continuing to operate independently "Each bank brings complementary products and services," Todd Tallman, President and CEO of Southbridge Savings Bank, said in a statement. "This partnership will provide us the ability to offer a broader range of services." Worcester No. 1 in Massachusetts for purchasing power A new study examining the cost of living versus an area's median income has found Worcester County residents have the greatest purchasing power in all of Massachusetts. The new study from SmartAsset examined where people in the Bay State can get the most for their money. Turns out Worcester is first, with a purchasing power index of 78.19. The index was derived from Worcester's second-low- est cost of living in the state, at $40,296, and the median income at $65,453. Coming in second and third were Norfolk and Nantucket counties. Middlesex County came in on the list in fourth with a purchasing power index of 77.08 derived from a cost of living of $52,135 and a median income of $83,529. HeartToHub makes inaugural ride from Worcester to Boston The HeartToHub line that will cut 30 minutes off the morning commute took off from Union Station for the first time on May 23. The train left shortly after 8 a.m., marking the first time the commuter rail has run nonstop service between Union Station and Boston in under an hour. The non-stop train will run twice a day on weekdays, leaving Worcester at 8:05 a.m., and leaving Boston's South Station at 7:35 p.m. The previous Commuter Rail sched- ule for the Framingham/Worcester Line takes about an hour and a half to get to Boston, and trains stop as many as 16 times on the way to South Station. Transportation Secretary and CEO Stephanie Pollack said the non-stop train is part of a wider, comprehensive update of Commuter Rail schedules. Hopkinton Tech Park leases out 57K sq. ft. A leasing spree has eaten up the majority of available space in the Hopkinton Technology Park, ushering in heavy hitters such as Spring Bank Pharmaceuticals, according to Greater Boston Commercial Properties. The leases were completed over the last four months, with almost half of them going to biotech and chemistry companies for laboratory space. The majority of the space, 34,763 square feet, represented new leases in the park with the largest new tenant being Spring Bank Pharmaceuticals but also being joined by EMC, Boston Rustic Weddings and Rimkus Consulting. The remaining 22,000 square feet were existing tenant extensions. The leases were completed by Bret O'Brien, president of Greater Boston Commercial Properties, Inc. Worcester unemployment falls to 4.2% Unemployment in the Worcester metropolitan area dipped by nearly an entire percentage point in April, bring- ing it to 4.2 percent and representing one of the largest gains in employment in the state, according to data from the Executive Office of Labor and Workforce Development. Although all areas of the state saw a decline in unemployment, down to 3.9 percent for April, the largest gains for the state were in the Boston- Cambridge-Newton, Springfield, Barnstable, Worcester and Lowell- Billerica-Chelmsford areas. Worcester's unemployment dropped by nearly a percentage point year-over-year from 5.1 percent last April. REGIONAL BRIEFS Verbatim "They're up there working, and it's really great to see new con- struction … We have seen a lot of renova- tions in the city." Marlborough Mayor Arthur Vigeant, on the $37-million new construction by Framingham- based LFB USA in the city >> "Those individuals, many of whom will graduate from colleges and universities in Worcester, will be able to commute into Boston for a job or a co-op or an internship, and yet afford a quality of life in the Worcester area." Lt. Gov. Karyn Polito, on the new HeartToHub nonstop train from Worcester to Boston >> "Now, more than ever, it's really impor- tant that we create what I've called the combo platter, diver- sify our portfolio and incorporate some alternatives to the more traditional sources of energy we've been using, to be sure that we can meet our region's energy needs going forward." Gov. Charlie Baker, on the energy bill being debated by the Massachusetts House of Representatives >> In Review CENTRALMASS >> Continued on Page 6 Gas pipeline cancellation leaves ghost of cost concerns BY SAM BONACCI Worcester Business Journal Digital Editor

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