Experts: State’s Energy Future Needs Regional Solutions

10.09.2014
Issues & Policies

Vulnerable to potential power outages and price spikes due to an inadequate energy infrastructure, Connecticut and the other New England states are facing significant energy challenges over the next several years.

That was one of the messages at the 2014 “What’s the Deal” conference this week in Cromwell, co-sponsored by CBIA and the Connecticut Power and Energy Society.

Energy Strategy

Connecticut continues to have some of the highest energy costs in the U.S. But State Commissioner Department of Energy and Environmental Protection Commissioner Robert Klee told the 200 business leaders at the conference that the state’s three-year-old Comprehensive Energy Strategy has sparked a wide range of innovative projects and solutions that are helping keep energy bills lower than they otherwise would be.

Among other things, these include numerous energy efficiency programs, increases in renewable generation sources, an expanded natural gas market, transportation improvements, and innovative microgrids and financing.

All of it is designed to provide Connecticut consumers with “cheaper, cleaner and more reliable energy,” he said—and to keep the state competitive with, at least, our Northeast neighbors

Can’t Deliver

Several speakers at the conference stressed the regional nature of the problem and the need for a regional solution.

The big problem, said Katie Scharf Dykes, DEEP deputy commissioner, is that the region’s energy infrastructure can’t comfortably deliver all the power that consumers need. And politics in our neighbor to the north is adding speed bumps to fixing that problem.

A year ago, all six New England governors agreed to collaborate on identifying and supporting private-sector electrical transmission and natural gas pipeline projects that will best lower the cost of energy in the region.

This election year, however, Massachusetts lawmakers failed to take action on moving forward with an important part of that strategy, instead opting for more study.  

But according to Heather Hunt, executive director of the New England States Committee on Electricity, the time to study things has passed, because “our experience and our [energy] bills” tell the story.

“Failure to address our energy infrastructure needs is costing New England   $3 billion per year,” added Eric Brown, CBIA’s energy attorney.

“Once the election season is over, the New England governors need to focus their administrations on that reality and work together, with urgency, to increase the region’s access to natural gas, large-scale hydropower, and other reliable and affordable energy sources for the betterment of their citizens and the region’s economic competitiveness,” he added.

Those benefits include environmental benefits, as well.

Dykes noted that until the region’s infrastructure is expanded, Connecticut must fall back on solutions it would rather not tap—including oil and coal generators, which Dykes added, “from a cost and environmental perspective are a step backward.”  

Multiple Challenges

Connecticut’s energy environment is particularly difficult due to “multiple challenges,” said James Daly, vice president of energy supply, Northeast Utilities.

Those challenges include a major shift to natural gas “without the infrastructure needed”; the rapid retirement of older power plants in the region; aggressive state carbon reduction goals; and modernization of the grid.

He identified two major transmission projects NU is working on, including the 187-mile Northern Pass, a partnership with Hydro Quebec that, once built, could provide costs benefits to Connecticut alone of from $200 million to $300 million a year.

And Access Northeast, announced last month, proposes to expand the natural gas pipeline into Connecticut by using existing right-of-ways to minimize the impact on communities, landowners and the environment.

What Will It Take?

The question facing Connecticut and the region, said Kevin Hennessy, director of federal, state and local affairs-New England for Dominion Resources, is “what’s going to be the catalyst that pushes us to take action? Price spikes or the potential for reliability issues?”

Dominion is taking action on an old brownfield site in Bridgeport and part of a farm in Somers, where the company created two innovative energy generation projects that are already powering homes and businesses in Connecticut.

The new fuel cell park in Bridgeport supported by state funds through CEFIA is now generating 15 MW of electricity for CL&P customers in the Park City and Milford. And the state’s largest solar farm, in Somers, is providing power for 5,000 homes in the area.

Help Available

One area of good news is the state’s focus on increasing energy efficiency and financing renewable energy.

While these measures alone are not sufficient to address the whole problem, they are an important piece of  the solution. And the cost of these measures is gradually being shifted from ratepayers to a market-based, private-sector financing model. 

For example, the state is offering seed help in the form of affordable capital for energy improvements.

Bryan Garcia of the Connecticut Green Bank said the bank’s aim is to provide the necessary capital to get projects off the ground, and then attract more private-sector investments in them to drive down ratepayer subsidization.

The Green Bank, now being emulated in New York State and California, is meeting an “extraordinary demand” for in-state generation projects, said Garcia, including zero-emission, low-emission and residential solar energy projects.

In the last quarter, the bank has helped finance about 11 MW of generation—compared with the state aiding the same energy amount over the previous decade.

Garcia says the bank is trying to answer, “What can we as a state do to attract local and regional banks to invest?”

But the bank is already answering that question—for example, over 11 years prior to the Green Bank, says Garcia, no state-financed energy projects included private-sector loans. But in the last three years with the new Connecticut Green Bank, similar projects have included 57% private-sector financing.

For more information, contact CBIA’s Eric Brown at 860.244.1926 | eric.brown@cbia.com | @CBIAericb

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