Connecticut policymakers are scrambling to develop a new energy strategy now that decisions in Massachusetts and New Hampshire have stalled multibillion-dollar pipeline projects to bring more natural gas to New England.
The long-range consequences of taking the wrong path now could lead to millions of dollars in added energy costs for consumers, missing mandated greenhouse gas emission reductions and a weaker business climate.
Gov. Dannel P. Malloy’s administration is trying to revise the state’s comprehensive energy plan. The legislative deadline for completing the strategy update was October, but state officials now say they hope to have it completed by early next year.
“The challenge of inadequate regional natural gas capacity to serve power plants is greater than one state can solve alone,” said Department of Energy and Environmental Protection spokesman Dennis Schain.
“If there was a path forward to bring in more [natural gas] supplies, we would pursue that,” Schain added. Without that as a “feasible solution at this time… we will look to all the other alternatives and build on them.”
A Critical Juncture
Environmentalists argue this is a perfect time for the state to commit more money and effort to energy efficiency and developing renewable sources like solar and wind power. Business analysts and key state lawmakers insist it’s still essential to find a way to get more natural gas here as a bridge until renewable energy is developed enough to satisfy this state’s appetite for electricity.
A big factor in this energy dilemma is how to get all the New England states to agree on major solutions. The gas pipeline plans were “all premised on regional cooperation,” said Sen. Paul Doyle, a Wethersfield Democrat who is co-chairman of the General Assembly‘s energy and technology committee, “and the whole thing backfired.”
A major transmission line project to dramatically increase importation of electricity from Canadian hydropower into New England continues to face tough opposition in New Hampshire, the primary route for the proposed power line.
Some Connecticut lawmakers are also wondering how President-elect Donald Trump’s pro-fossil fuel administration will affect energy markets in New England and around the U.S.
Another facet of the energy debate is that Connecticut has set 2020 and 2050 targets for reducing greenhouse gas emissions to combat climate change. But recent analysis by the state and outside groups indicates that greenhouse gases from fossil fuels have actually been rising in Connecticut in recent years.
“We’re sort of at a critical juncture here,” said Claire Coleman, a climate and energy attorney with the Connecticut Fund for the Environment. She said the state could fail to meet its greenhouse gas reduction goals unless it changes its energy policies.
“We’re trying to figure out where to go and how to get there,” said Rep. Lonnie Reed, D-Branford, House chairwoman of the energy and technology committee.
William Dornbos, director of the Connecticut branch of a pro-renewable energy group called the Acadia Center, said: “I think this is a chance to pause and reassess the state’s energy plans.”
Officials at Eversource, New England’s largest electricity distributor, say the big pipeline projects remain the only realistic, affordable option to hold down energy costs and improve reliability. They think Connecticut should remain committed to expanding natural gas use for generating electricity in this state, and warn that failure to do so will cost consumers billions of dollars in higher energy costs, particularly during tough, cold winters.
James Daly, Eversource vice president for energy supplies, said the goal is to bring more natural gas in from the Marcellus Shale fracking fields of Pennsylvania and New York. “What we’re trying to figure out is how to get there,” he said.
The problem for energy planners in this state is that realistic proposals for financing these major pipelines will require legislative changes in Massachusetts and New Hampshire – which Connecticut officials can’t control.
Pipelines That Are Too Old and Too Small
Connecticut, Rhode Island and Maine have already passed legislation to allow electricity ratepayers to be charged for the costs of building or expanding natural gas pipelines. A court ruling in Massachusetts and an administrative decision in New Hampshire have effectively prohibited ratepayers in those states from having to pay pipeline costs.
One $3.3 billion pipeline plan was dropped early in 2016 because of uncertainty over financing the project. Eversource is a major player in a different, $3 billion proposed pipeline expansion called Access Northeast, but that’s been blocked by the actions in Massachusetts and New Hampshire.
In late October, those decisions led Malloy’s energy office to halt consideration of major natural gas pipeline plans, explaining that Connecticut ratepayers can’t be expected to carry all the burden of those projects if other New England states won’t pay their fair share.
“What’s been thrown up in the air is how these projects can be paid for,” said Eric Brown, an associate counsel for the Connecticut Business & Industry Association. “There’s a significant amount of uncertainty,” Brown said. “What’s the answer? I’m not sure.”
But Daly said Connecticut and New England businesses could face daunting competitive pressures in the years ahead if energy costs continue to rise in this region compared with other areas of the U.S.
Daly said his company is hoping Massachusetts and New Hampshire will eventually recognize the need for a financing solution. He said the problem is that “not all [the states in the region] are going to be on the same track at the very same time.”
Existing pipelines are too old and too small to bring in the amount of gas the region needs, according to energy industry experts, particularly during frigid winter periods. Energy industry analysts estimate New England will need an additional 1 billion to 2 billion cubic feet of natural gas a year to meet increasing demand.
“We don’t think that’s the case,” said Dornbos. He said independent research indicates that energy conservation together with increasing renewable sources like solar and wind power can supply the region’s energy needs without massive investments to bring in more natural gas.
Daly points out that older oil- and coal-fired generating plants are being closed or converted to natural gas. Reed, the legislator, said nuclear power continues to be very expensive, with high costs for security and storage of spent nuclear fuel rods.
The CBIA’s Brown said he has no doubt that current constraints on supplies of natural gas “will continue to hurt us in terms of the cost of electricity,” particularly if we get another bitter winter.
Both environmentalists and industry officials say what is needed is a “balanced approach” to solving Connecticut’s energy needs, without over-reliance on any one type of energy. But they disagree about what that balance should include. Daly argues that natural gas to generate electricity is a proven technology that will be needed for decades to come; environmentalists like Coleman insist investing those billions of dollars in energy efficiency and renewable power sources is a “better deal for Connecticut taxpayers.”