Energy Forecast: Cloudy, Periods of Sun
In his 2015 energy forecast, delivered at this year’s 21st Century Energy: What’s the Deal conference, DEEP Commissioner Robert Klee noted that with a “cheaper, cleaner domestic energy supply just 90 miles away,” his agency is aiming for 50% natural gas penetration in Connecticut to achieve parity with neighboring states.
He acknowledged, however, that natural gas is not a viable option for the foreseeable future in half the state, “which is why need to keep pursuing energy efficiency…and driving down the cost of alternatives.”
Noting that “there are limits to what consumers can and will pay,” Klee called for leveraging more private capital to reduce subsidies—crowdsourcing, the Groupon approach, and other innovative strategies to encourage deployment at scale.
‘It All Boils Down to…’
“We’ve entered a very volatile period in our energy market,” said Deputy Commissioner of Energy Katie Scharf Dykes [pictured above, with Klee], underscoring the challenges to sustaining a competitive economy.
“It all boils down to a problem of inadequate infrastructure.”
Connecticut’s pipeline constraints and limited natural gas buying capacity, said Dykes, resulted in $3 billion in additional costs last winter and are expected to keep prices elevated this winter too.
Stopgap solutions such as increased reliability on coal and oil “take us backward from a cost perspective [by increasing wholesale electricity costs] and an environmental perspective,” she said.
“And the problem will only get worse.”
‘Too Big for One State to Solve’
Though we won’t know the new natural gas procurement rates until the latter half of November, said Dykes, price volatility in New England will continue until three things happen: we secure adequate natural gas infrastructure; we diversify our energy supplies to include more renewables and large-scale hydropower; and we reduce consumption of electricity or gas—or both.
She acknowledged, too, that our energy challenge requires a regional approach, such as the New England Governors’ Energy Infrastructure Initiative, which would expand renewable energy and natural gas capacity by appropriate cost-sharing—cooperative investments in pipelines, electric transmission, renewable generation, and energy efficiency across the six New England states.
“This problem is too big for one state to solve on its own.”
The conversation continues this Friday as Arthur House, chairman of the Connecticut Public Utilities Regulatory Authority, speaks to Connecticut business leaders about infrastructure security risks and responses at CBIA’s 2014 Environmental Policies Council Fall Meeting & Outing.
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