Legislators: Energy Affordability, Reliability Are Economic Imperatives

Managing energy costs and grid reliability are critical for economic growth as Connecticut transitions to renewable alternatives, according to key state lawmakers.

Speaking earlier this month at CBIA’s 2024 Energy & Environment Conference, the lawmakers addressed a range of energy and environmental issues.

Eversource’s Jonathan Harris moderated the discussion with Rep. Joe Gresko (D-Stratford), co-chair of the legislature’s Environment Committee, ranking member Rep. Patrick Callahan (R-New Fairfield), and Energy and Technology Committee co-chair Sen. Norm Needleman (D-Essex) and ranking member Sen. Ryan Fazio (R-Greenwich).

The bipartisan panel focused on the three-legged stool of Connecticut’s energy policy—reliability, cost, and sustainability—as well as the General Assembly’s approach to climate change policy.

‘Balanced, Thoughtful’ Approach

Harris, who is Eversource’s director of regulatory affairs, asked whether Connecticut’s energy ratemaking structure, designed in the last century, “maybe doesn’t work anymore to meet the needs.”

“And there might be other ways, whether it’s state bonding or other ways to pay for things, as opposed to through electric rates,” he said.

Needleman told the audience of more than 220 people that “in general, Connecticut is the little state that wants to punch above its weight all the time.”

“And I appreciate that,” he said. “I don’t think we can, I think we have to be consistently thoughtful about what we want to do and be leaders in.

“And with that, that feeds right into the environmental side of what we’re doing.”

Needleman spoke of the need for a “balanced, thoughtful” approach to energy policy and regulation.

“I own a manufacturing company, I know what the costs associated with our goals are,” he said. “And they’re not quite as much as people think.

“But I also need people to remember when it comes to the cost of energy, we have to look at cradle to grave, right?”

‘Forced to Compete’

Fazio noted that the state’s high cost of electricity was “a major sticking point about investing in Connecticut” for businesses, particularly manufacturers.

“The fact is that we are dealing with decades of rising demand on the horizon, and no foreseeable new reliable generation in sight that can be brought online affordably,” he said.

“And that is inevitably going to lead to both concerns about cost. Because if demand increases, and supply is not there readily and affordably to go online, you’re going to see prices increase.

“And more importantly, if there’s not reliable supply, ready to come online with rising demand, you’re going to start to deal with concerns of reliability.”

He added that while “it might not be realistic to decrease electricity rates by 20% over the next decade, but at least we have to do everything possible to stop them from increasing 20% or 40% or 60%.”

“If they aren’t forced to compete, they’re less likely to succeed.”

Sen. Ryan Fazio

“There’s a lot of discrete steps that on the whole will add up to limiting future costs and increasing the likelihood of having a reliable grid,” he said.

“Natural gas has to be a part of that equation. Nuclear has to be a part of that equation. And yes, solar and wind should also be part of that equation. With hydro, we should have an all-of-the-above clean energy strategy.

“It should aim to force different sources, different producers, to compete against one another, rather than simply having, you know, special, fixed benefits for each individually.

“I think that is a happier kind of way forward, that will force everyone to compete. We want these sources of energy to succeed.

“But if they aren’t forced to compete, they’re less likely to succeed in the future.”

‘Green Monster’

Gresko addressed HB 5004, a wide-ranging bill dubbed the “Green Monster” that was designed to mitigate climate change, which died in the Senate at the session’s deadline.

“Do I think do I think it comes back in some iteration?” Gresko, who also sits on the Energy Committee, asked. “Not this month, possibly later on in this year. But I don’t think it goes away.

“And as much as I would like to have seen CBIA come out in favor of the bill, I think it was an accomplishment that you were kind of neutral on it and viewed it as more of an incentive package rather than mandates.

“I still think there’s room for this bill to make it through the legislature in some form and I look forward to doing that either at the end of this year, or I think I’m going to be inheriting the bill in 2025.”

“There are costs, but there are costs to not doing it.”

Sen. Norm Needleman

Callahan said opposition to the bill centered on the sunsetting of fossil fuel use, noting “unless we have something ready at the in the wings to replace it, that’s going to be difficult.”

“I know what a lot of the price of power is because of [the legislature], because of mandates that we put on these companies,” he said.

“And it’s difficult for me to support a bill that is definitely going to make electricity rates go up, because our constituents just can’t afford it.”

Needleman said while he was not “a gung-ho advocate for phasing out fossil fuels tomorrow, but over the next 30, 40, 50 years, I hope we can all see that fossil fuels need to be phased out.”

“We need to continue to innovate and continue to be creative,” he said. “There are costs, but there are costs to not doing it.”

Future Shock

While all four legislators agreed that demand for electricity will increase dramatically over the next few decades, there were differing opinions about the means for meeting that demand.

“I think we’re seeing light at the end of the tunnel,” Needleman said.

“Renewables, we know that the more they are used, and we subsidize their use, the lower the price comes over time, which is exactly what happened with solar, we put huge subsidies in place.

“Then we changed all the all of the programs that we had to lower those subsidies, and eventually we want them to be competitive in the market.

“These are issues that we’re have to tackle over the next 10 years if we want to lower our costs.”

Rep. Patrick Callahan

“Any energy source that doesn’t have a fuel, those are going to be cheaper over the long run if we get over the capital costs. So I think that that’s the future.”

Needleman added that battery storage expansion was “the next big step,” saying “hopefully, we can get them to the point where we can store energy more efficiently, because intermittency with wind and solar is a problem.”

Callahan told the audience he expects that the legislature will continue to navigate energy supply and demand issues.

“I am concerned with where we are on the grid,” he said.

“These are issues that we’re going to have to tackle over the next 10 years if we want to lower our costs and get better at controlling emissions. So we’ll see what next session brings.”

Transition Management

Fazio pointed to projections that regional energy demand will increase as much as 60% by 2040.

“We’re dealing with very great orders of magnitude,” he said. “And we’re really, really rooting for and hoping for these industries to compete on cost to bend the cost curve down so they can be more affordable so they can be deployed.”

Fazio believes the transition away from fossil fuel requires leveraging an array of energy sources, including natural gas and nuclear power.

“The best case scenario for from an environmental and reliability standpoint is that small modular reactors or advanced nuclear are developed in a way that is cost effective and new construction, new deployment can happen,” he said.

“But we’re not in going to have new nuclear deployment that’s affordable in the next 10 years. So how do we get there?

“We are in trouble. I don’t think there’s any two ways about it.”

Fazio

“It’s probably not with $160 [a kilowatt] offshore wind when the wholesale market in natural gas is $30. It’s probably not with solar, although, you know, maybe some of the grid scale stuff needs to be part of the solution.

“We are in trouble, I think. I don’t think there’s any two ways about it. We’re in trouble from a cost perspective and or reliability perspective, because those are interacting factors.

“The best case scenario is that you could, in co-located places, expand the natural gas pipeline to provide transition.

“That brings us away from more oil plants, it brings us away from gasoline powered cars. So it reduces our greenhouse gas emissions, while providing reliable and affordable energy and nuclear technology or some of the other zero carbon technologies innovate on cost in the next 10 years.

“That’s the best case scenario. Unfortunately, I don’t think I would bet on any of those happening.”

Permitting

The legislators also discussed the state’s permitting process, responding to an audience question referencing regulatory reforms in neighboring Massachusetts designed to expedite green energy projects.

Gresko referenced the Department of Energy and Environmental Protection’s 20BY26 initiative, which includes the creation of a permanent concierge office. 

“DEEP has their 2026 goals and they have this permit concierge to try to streamline the permit process,”he said.

“But the point is well taken. For example, we’ve been waiting six months for an interconnect with our local battery company for a project in Bridgeport.

“It feeds into the opinion that it takes forever to do any kind of innovation.”

Rep. Joe Gresko

“These are extended periods of wait, and it feeds into the opinion here in the state of Connecticut that it takes forever to do any kind of innovation.”

Fazio noted that “a lot of the regulatory permitting processes are increasing the marginal cost of these programs.”

“I know that those types of reforms have seen bipartisan support around the country,” he said.

“I don’t think it’s an elixir, but it probably bends cost curve in the right direction. So I’m more than open to it.”