“Cheaper, cleaner, more reliable.” That mantra has guided the energy policy of Gov. Dannel P. Malloy’s administration since he stepped into office on January 5, 2011.
An election cycle later, some of those pledges are coming back to haunt Malloy as his opponent, Republican Tom Foley, argues that energy is not cheaper.
The Malloy administration’s record on energy issues may not be the most debated issue of the gubernatorial campaign, but there’s a heck of a lot of it.
Malloy arrived with grand plans for remaking the Department of Environmental Protection into the Department of Energy and Environmental Protection and for creating the nation’s first Green Bank to better fund clean-energy projects.
He spearheaded legislation to make those changes and instituted dozens of programs and policies to address energy issues — especially the state’s electricity rates, which are nearly the highest in the nation.
Malloy addressed climate change and the environment in general as well as making specific responses to two tropical-style storms, devastating blizzards and nor’easters that the state endured during his tenure.
Foley calls himself a conservationist, but says his focus on energy would try to balance such policies with the financial cost to citizens. “I would certainly like to rely more on market-based forces to do this than government mandates,” he said. “I am reluctant to make Connecticut any more expensive for its citizens than it is already, and less competitive for jobs.”
In assessing his success in making energy cheaper, cleaner and more reliable, Malloy said in a recent interview, “We’re more reliable; we’ve certainly reached that goal at least from the perspective of the delivery system.”
“I’m also proud that we’re buying 10 times the renewable energy since I’ve become governor,” he said.
Cheaper, he admitted, has been a little tougher. “But I think in the long run we will be cheaper, which is really the big target.”
Foley says no; that electric rates are higher now than four years ago. He points to this year’s doubling of the Conservation and Load Management charge – a fee on electric bills that the legislature imposed to fund energy-efficiency programs run through Energize Connecticut. “I think that Gov. Malloy has overreached on a lot of his legislative initiatives,” Foley said.
In an interview, however, Foley was unfamiliar with a number of those initiatives — including the popular residential solar program run through the Green Bank.
Foley also was not familiar with the utility-run commercial renewable energy programs, which have drawn hundreds of business applicants; and the Regional Greenhouse Gas Initiative, the nation’s first regional cap-and-trade program for carbon emissions. It was begun in a Republican administration, but the Malloy administration has helped strengthen it.
“I don’t think Connecticut ought to be leading the world or even leading the nation on these things at the expense of consumers and jobs,” Foley said several times.
The truths about energy, however, are complex, nuanced and intertwined with factors the state may not control – the weather, for one.
Bottom line on the bottom line
Connecticut Light and Power’s rates for the residential standard offer, the benchmark price for electricity supply, are slightly higher than they were when Malloy took office, though they had been lower until July. United Illuminating’s standard offer has been lower for the duration.
The delivery rate per kilowatt-hour, a series of charges that reflect what it takes to deliver electricity (it includes that Conservation and Load Management charge) has gone up.
But in terms of electric bills, there’s evidence people and businesses are more efficient in their electricity use and therefore are paying less. The independent system operator that runs the New England electric grid is predicting electricity use to be flat well into the future as a result of energy efficiency.
Even so, Foley said: “I think the efforts to make households more efficient really isn’t working.”
Energy efficiency is a core element of the state’s first Comprehensive Energy Strategy, legislated in concept in 2011 and approved in practice in 2013.
“Energy efficiency has been an entirely bipartisan issue in Connecticut for almost two decades now, for good reason – eliminating costly energy waste is an economic winner,” said Bill Dornbos, Connecticut director and senior attorney of ENE, a regional environmental group, reflecting a widely held view among environmentalists, business groups and government officials. “After all, the cheapest kilowatt of electricity or gallon of heating oil is the one we never use.”
The yin and yang of natural gas
The push for natural gas is designed to take advantage of fracking technology that has resulted in an abundance of gas at a low cost. The Connecticut strategy calls for about 300,000 customer conversions to natural gas heat over 20 years, most of which are expected to come from oil and propane users. DEEP reports about 10,000 conversions so far this year, about half the year’s goal.
Natural gas is also being used more to run power plants in the region because it’s cheaper and cleaner than coal and oil. But the power plants and heating systems draw their gas from the same pipelines and have pretty much maxed them out, especially when it’s cold.
During cold snaps last January, for instance, home heating needs required so much gas that power plants could not always get enough, forcing the electric grid to revert to coal and oil and pushing purchase prices up as much as 10-fold for short periods. That cost was not passed on to customers at the time, but electricity customers are starting to feel it now, leading to the recent rate rises.
Plans to add major gas distribution pipeline capacity in the state and region are also part of the state’s energy strategy. In a letter signed by all six New England governors last December, the states pledged to work together to improve electricity transmission and other infrastructure, such as pipelines, but the process has been slow if not stalled.
A couple of distribution pipeline expansions have been proposed for Connecticut, but are still several years away, even if everything goes smoothly. Smaller, local expansions, such as those that bring gas pipes down new streets, are planned or completed. The gas companies will be able to recover the cost of such projects from customers.
Foley gives an unequivocal “no,” to whether he supports the gas buildout.
“He’s burdening consumers’ home heating fuel with the cost of the buildout for natural gas,” Foley said of Malloy. “He’s raising everybody’s costs. Why isn’t he just letting the market do this?”
“I don’t support forcing consumers to consume one kind of energy over another,” Foley said.
Malloy responded: “There is nothing in any proposals that we’ve made that requires anyone to use any specific energy source.”
Malloy and others point ominously to the planned closures of at least two coal-fired plants in Massachusetts and the Vermont Yankee nuclear power plant as evidence more generation is needed. “When states are actually having to close factories during the winter because they need to preserve that gas to go to electricity-generating facilities,” Malloy said, “the New England economy can’t tolerate that.”
Malloy wants more power from gas-fired and large-scale hydroelectric plants, also a part of the state’s energy strategy. Hydro was controversial among environmentalists last year because Malloy proposed it potentially at the expense of other renewables and because of their opposition to transmission lines in northern New England. Hydro remains more or less stalled.
“I believe that we have to do all of these things,” Malloy said. “So this is movement in all directions, all at the same time.”
Clean power bonanza
What has come on line in Connecticut during the Malloy administration are the state’s first large-scale clean energy projects: two solar installations in Somers and East Lyme, and the nation’s first fuel-cell power plant in Bridgeport.
Solar power has increased by 1,000 percent in the last four years, with the residential solar program reaching its 10-year goal of 30 megawatts this summer, eight years ahead of schedule. One megawatt can power about 1,000 homes.
“The solar industry in Connecticut was more of a boutique industry before the state energy strategy went into effect,” said Mike Trahan, executive director of the industry group Solar Connecticut. He noted that the Green Bank has been able to reduce incentive levels dramatically as consumer interest in solar and the industry overall have grown. “We’re on much firmer ground now,” he said.
Malloy plans a 10-fold expansion in the residential solar program by 2020 and additional funding for the Green Bank to help capitalize it and other programs.
When asked about maintaining the residential solar program, Foley said: “I don’t know exactly what it is.” Nevertheless, he contended that “a lot of efforts to support green energy really haven’t worked.”
“Just because you’ve installed it, doesn’t mean it’s good policy,” he said. “I know it makes people feel good, but it’s not clear you’ve achieved the result that you want.”
Comparing the details
The energy policy put in place by the Malloy administration and a detailed energy, environment and climate plan released by the governor’s campaign contrast with a single line in Foley’s campaign literature: “I will end the mandates and other costs that have been added to electricity bills by Governor Malloy.”
Privately, some of those most likely to support Foley would like to see a more developed and specific energy policy.
The Connecticut Business and Industry Association, which often leans Republican, has long worried that the state’s high energy costs are hurting its competitiveness and attractiveness to business.
But Eric Brown, CBIA associate counsel, also praised Malloy and the legislature for implementing a “more coherent energy policy,” and for the creation of DEEP.
But on the cheaper, cleaner, more reliable front, he said, “Renewables and cost can work hand-in-hand, but it is very difficult to find something that works great for all three of those,” he said. “We’ve done some things, but clearly we need to do more.”
Brown views the natural gas push as one answer. “The opportunity we have with reserves of natural gas so close by, if we don’t do everything we can to take advantage of it, we would fall further behind,” he said.
Environmental groups, many of which are non-profits and prohibited from discussing the campaign directly, have applauded most of Malloy’s policies. He has won a first-ever gubernatorial endorsement from the Connecticut League of Conservation Voters.
But most environmental groups have been lukewarm about natural gas all along, citing the dampening effect they believe it would have on investments in cleaner forms of energy. They are concerned about the environmental impacts of the fracking process used to recover the gas and about other environmental problems of gas pipelines, including their tendency to leak methane, a greenhouse gas more potent than carbon dioxide.
Whoever is elected, “I think it would be the perfect time to revisit the role of natural gas in Connecticut’s future,” said Shanna Cleveland, senior attorney with the Conservation Law Foundation. ”What we’ve seen over the last few months is a lot of governors starting to reassess where we were in May and June about increasing natural gas capacity.”
A more “holistic” approach, she and others said, would be better.
Perhaps most vocal in opposition to a gas buildout has been the Connecticut Energy Markets Association, formerly the Independent Connecticut Petroleum Association. It represents nearly 600 home heating oil and gasoline distributors, many of whom could lose business in a wholesale conversion to gas.
Chris Herb, the organization’s president said of Foley, “I’m more hopeful that his pro-business stance is more conducive to a fairer look.”
Tallying the program numbers
While the Malloy administration portrays most of its energy programs as successes, not all have hit their goal. Lead By Example, a program designed to cut energy use in state facilities 10 percent by 2012, missed that mark. But 57 projects have made a substantial dent and plans are to wean the program off bond financing and onto financing through the energy savings themselves.
Malloy said transmission concerns and natural gas availability for fuel cells, which mix it with oxygen to produce needed hydrogen, were to blame for the falloff; and he expected both problems to be ironed out. But Foley called it a “stealth tax” because it is run by the utilities and their costs would ultimately be paid by all customers.
The state’s microgrid pilot project, created to help critical facilities keep power during outages, like those in tropical storms Irene and Sandy, also had far fewer applicants on its second round.
On the other hand, the Green Bank’s Commercial Property Assessed Clean Energy program, C-PACE, which allows businesses to borrow at lower rates for clean energy and energy-efficiency projects and make loan payments as part of their property tax bills, has been snatched up in 93 cities and towns for 54 projects in just over two years. C-PACE has already been recognized as a national model.
“I support conservation efforts, and I support efforts to protect our environment,” Foley said. “I think a lot of energy policy today is fighting the last war.”
“Technology is going to solve a lot of these problems, and I think good government policy is more about supporting technology.”
As for Malloy, while his energy focus may move to modernizing the grid and providing new financial models for supplying power, the goal is pretty much unchanged.
“There’s a lot of things we could do to bring about cleaner, cheaper and more reliable energy in Connecticut,” he said. “And that’s where I’m going to continue to spend a lot of my time and energy.”