CT works on a new energy strategy as old one misses the mark
Connecticut’s Comprehensive Energy Strategy, enacted three years ago, set the state on its first-ever, broad-based approach to energy use and development in the face of climate change.
The strategy, generally referred to by its initials CES, put considerable focus on natural gas, then far cheaper than oil, as a cleaner bridge fuel to renewable energy options down the road. It called for conversions from oil to gas for heating, and it stressed the need to expand natural gas pipeline capacities to carry the large amount of fracked gas that was available so that power plants could switch from oil or coal to natural gas and new natural gas plants could be built.
That was the plan anyway.
Three years later, as state officials update the CES as required by law, they face dramatically changed energy, environmental and political landscapes that raise questions about whether the last three years may have been partly wasted and how to regroup.
The new reality
Since the first CES, the price of oil has dropped by more than half, making natural gas not much of a better deal. Conversions to gas for heat are far below their original targets.
Two of five natural gas pipeline projects and competitive bidding for more were scuttled, leaving gas supplies in New England as constrained as ever. In the meantime the region grew even more reliant on natural gas for power generation after the shutdown of the Vermont Yankee Nuclear Power Plant and a handful of coal and oil plants. More closures – including the Pilgrim Nuclear Power Plant in Massachusetts – are planned.
Greenhouse gas emissions in Connecticut were found to be increasing as of 2013 after several years of reductions. Many worry the state is now unlikely to meet a key emissions target in 2020. Regionally emissions were up in 2015 after the closure of Vermont Yankee.
Legal challenges slowed proposed renewable energy projects in the state and region. The state’s fuel cell industry came up empty-handed in recent clean energy competitive bidding, compounding the impact of a very weak financial report and layoffs at the most prominent of the state’s companies – Fuel Cell Energy.
The state and region’s largest power plant – the Millstone Nuclear Power Station, which does not emit greenhouse gases – threatened closure because it was having trouble competing against low natural gas prices.
Then there was an election – giving Republicans a strengthened hand in Connecticut, two more governorships in New England, not to mention a full sweep of the federal elected government. Many expect that Donald Trump’s stated dismissal of climate change, general Republican disinclination on the national level to fund clean and renewable energy, and Connecticut’s Democratic, non-Trump-supporting congressional delegation and governor will translate into little or no federal funding for Connecticut projects related to clean and renewable energy and climate change.
And that’s just the short list.
“We know that the world has shifted in different places,” said Rob Klee, the Department of Energy and Environmental Protection commissioner who replaced the commissioner who oversaw development of the first CES – Dan Esty. “The CES is this great tool for looking at what’s working, what needs some adjustment, versus a complete overhaul.”
Developing the new strategy, in the works for months, has included an information session in May followed by dozens of comments. In the last couple of months, the process was slowed by the departure of its primary architect, energy chief Katie Dykes, who moved over to the Public Utilities Regulatory Authority.
All this has been going on against a backdrop of at least three parallel state and regional energy planning processes. The most critical is the Governor’s Council on Climate Change. It is working on a long-term climate action plan that ideally needs to dovetail with the shorter-term goals of the CES.
Technical sessions for the CES now planned for January leave in doubt whether the plan will be done in time for the five-month legislative session that starts in January or whether some of its three components – covering electricity, buildings and transportation – will wind up before the legislature piecemeal.
But even without an actual document, let alone a final one – one thing it is not likely to include is as dominant a natural gas emphasis the first one had. The Governor’s Council, including its members from DEEP, already has determined that relying on natural gas will not get the state to its emissions goals.
“Pivot” is a word that comes up a lot – especially from environmental groups that argued three years ago that the state was putting too many eggs in the natural gas basket.
“I don’t know what I’m pivoting to,” Klee said. “We’ve been doing a lot of the things that are not natural gas.”
Critics say those things have been too little and too slow to make up for power plant shutdowns and to cut greenhouse gas emissions.
“This is a great opportunity to completely shift our focus and move toward the clean energy future that we need,” said John Humphries, founder of the Connecticut Roundtable on Climate and Jobs and one of the few non-governmental members of the Governor’s Council.
The natural gas bogeyman
The “I told you so’s,” are barely contained among the unusual mix of environmentalists and oil industry representatives who opposed the natural gas component of the first CES.
Greg Cunningham, vice president and director of clean energy and climate change programs at the Conservation Law Foundation, said there’s a lesson in having relied so heavily on fuels historically subject to market swings. But he sees a silver lining. “Those efforts might have resulted in significant buildout of natural gas infrastructure, to which we would have been wedded for decades.”
The Connecticut Energy Marketers Association (CEMA), the industry group for the state’s 600 heating oil dealers, sees itself as a solution with a product that is now inexpensive and cleaner because of dramatically lower sulfur content. That content is expected to drop nearly to zero in a year-and-a-half with an increasing percentage of biodiesel mixed in.
“We will put a full-court press on,” said Executive Director Chris Herb. “It will be for a complete repeal of any language in the CES that has to do with gas expansion or conversion.”
But natural gas is likely to be a component of the region’s energy mix for a long time – and therefore the CES. Power plants rely on it more than ever, with many having converted to gas and new ones planned – including in Connecticut. The winter heating season puts more strain on the system.
Despite a report from the Massachusetts attorney general, also since the last CES, that the region didn’t need more gas pipelines, the Independent System Operator (ISO) that runs the New England power grid pointed out in its recent winter outlook that natural gas accounts for 44 percent, or 14,850 megawatts, of the region’s generating capacity, nearly a quarter of which is at risk on cold winter days. The 1,500-megawatt oil and coal Brayton Point Station in Massachusetts is set to close in May.
“We still see the need for additional gas infrastructure, whether it’s pipelines, whether it’s LNG storage, whether its dual fuel capability,” said Anne George, ISO’s vice president of corporate communications and external affairs. “That need is still one of the most acute challenges we have.”
But more gas worries many in the environmental community.
Acadia Center, a Northeast-based environmental advocacy group that was among critics of the natural gas emphasis in the 2013 CES, discovered a math error in DEEP’s calculation of greenhouse gas emissions in 2013.
Instead of being at, or even just below, the 2020 emissions cap dictated by the state’s Global Warming Solutions Act – which is where emissions were in 2012 – they were heading back up. DEEP has since revised its calculation.
Acadia’s calculation, based on publicly available data, showed more. “We found an increase of 7.5 percent from 2012 to 2015,” said Bill Dornbos, who heads Acadia’s Connecticut office. “Looking at the data that’s out there now for 2016, we’re pretty confident 2016 will be higher than 2015 and maybe even significantly so.”
Most believe the cause is not the electricity sector, which has all but eliminated its dirtiest generators in the state and region. Rather the lower price of gasoline has increased the use of vehicles and the purchase of less fuel-efficient ones. Transportation accounts for about 40 percent of emissions.
Emissions from buildings and manufacturing account for another 40 percent, and that’s gone up too. “Our current natural gas emission level is higher than the entire carbon budget for 2050 (80 percent below 2001 emissions),” Dornbos said.
The solution he and others want incorporated into the CES is a paradigm favored by the environmental community: electrify as much as you can, such as heat and transportation, and then decarbonize the power grid by switching from fossil fuels to clean and renewable power. The theory is it’s easier to control emissions that way.
The CES is likely to do that by pushing for greater use of air source heat pumps and electric vehicles – electrification of heat and transportation.
But some think it’s just robbing Peter to pay Paul. It may take stress off fossil fuel use and emissions for heat and transportation, but would increase those stresses for electricity.
“That means we can’t even drive when the grid goes down. We can’t heat or cool our homes when the grid goes down,” said Lynn Stoddard, director of the Institute for Sustainable Energy at Eastern Connecticut State University and a member of the Governor’s Council. She says she’s “queasy” about electric vehicles since they’re still individual transportation and a contributor to congestion, wear on roads and worrisome land use.
Klee conceded such plans would lead to more electrification, but slowly. “We have what, 3, 4,000 EVs on the road today?” he said. “It’s not going to go to 100,000 this year or next year.”
There are strategies being considered that would help, such as cheaper electric rates if you charge an EV overnight. But you still need the cleaner power.
More on the wish list
Clean and renewable energy strategy is rooted in goals set by many states called the renewable portfolio standard (RPS).
Connecticut set its standard a number of years ago – to get 20 percent of its power from the cleanest renewables by 2020, one of the toughest goals at the time. Since then many states have enacted stronger standards that extend farther into the future.
Connecticut’s environmental community is squarely behind expanded standards, though few offer specific targets. Klee said Connecticut probably will “modify” the standard in the new CES.
“The RPS from what we’ve seen is delivering things that we’re not necessarily thrilled it’s delivering,” he said, noting that much of of the state’s renewable energy comes from wood-burning plants in Maine – not ideal environmentally. “I think one of the things we’ve learned is tinkering with the RPS is never easy. It’s a market, so we have to be very cautious about what we do.”
Rep. Lonnie Reed, D-Branford and co-chair of the energy and technology committee said she thought the RPS should be increased. “But we better know more about it before we do,” she said. “You don’t want to put false goals out there.”
Eric Brown of the Connecticut Business and Industry Association said his organization would not support goals for renewable energy significantly more aggressive than those of other states in the region. “We’re generally in favor of regional if not national approaches,” he said. “Anything that keeps us from sticking out like a sore thumb and a big red flag to stay away.”
But the RPS is just a goal. You still need policies to acquire that renewable energy.
Among policies being pushed for the CES is expansion of shared clean energy even before an existing small and much-delayed pilot project ends. It’s a way for those who can’t put solar panels on their own properties to benefit from a project elsewhere.
Another is expansion of what’s known as virtual net metering, a method to allow those who make more renewable energy than they can use to sell it to others. An existing program has reached its cap and many argue the cap should be raised or eliminated.
There probably will be expanded competitions for so-called grid-scale renewables – major sources of renewable energy that are tied directly into the electric grid, such as large solar fields or wind farms. And utilities are likely to be granted additional opportunities to own generating plants as deregulation rules that prevented them from owning power plants are tweaked.
There’s also discussion of whether fuel cells – not quite renewable because they generally need natural gas, but considered clean – should get special treatment. They are the products of a home-grown industry that are still expensive enough to have difficulty competing financially against solar and wind. Many see fuel cells as a critical component for two aspects of an energy strategy.
One is that they can help to decentralize the power supply to make it more secure. Another is that, because fuel cells run 24/7, they provide a solution for the inherent drawbacks of some of the most popular renewable power sources – solar and wind — which only work when the sun is shining or the wind is blowing.
“We can’t run the system on intermittent resources like just solar and just wind,” said James Daly, vice president for energy supply for Eversource. “Some argue that all you need to do is add batteries to those two resources and then you’ve got a solution. But that’s really a long way off.”
Daly would like to see greater support of hydropower with a commitment to more transmission. It’s not a surprise since Eversource is a partner in Northern Pass, a proposal to bring Canadian hydropower in through New Hampshire. It has faced opposition, but the new governor of New Hampshire, a Republican, is on record supporting it, unlike his predecessor.
Daly also would like to see a more reliable gas supply. Eversource, however, is re-evaluating its support for the Access Northeast natural gas pipeline project after New Hampshire, Rhode Island and Massachusetts ruled against recovering costs for it from ratepayers. Those rulings resulted in several companies pulling their support for the pipeline and the rulings were also why Connecticut canceled its own natural gas plans, saying the state can’t do such projects on its own.
What many consider key to the New England grid’s reliability is the 2,100 megawatts of power provided by the two units of Millstone. It was barely mentioned in the 2013 CES, but may well be the most contentious piece of the new one.
Millstone now a key player
Last Aug. 11 was the first of a series of 90+ degree days in what would turn out to be the hottest August in Connecticut in 122 years.
At around 10 a.m., Millstone II, the smaller of the power station’s two reactor units, suffered a lightning strike, and the ensuing power surge sent two of its four circulating water pumps offline. With the remaining two insufficient to keep the unit working, the plant was shut down, taking some 870 megawatts of power capacity with it.
Compounding the problem, other generating units in the region also went down, all of which sent ISO scrambling for power on the high-priced spot market.
Power prices that normally average about $40 per megawatt hour spiked at a couple of points that day at nearly $2,700 per megawatt hour. The highest hourly average that day was nearly $1,450 and the average price for the whole day was $255.
“Prices went absolutely bonkers,” said Kevin Hennessy, director of federal, state and local affairs in New England for Dominion, Millstone’s owner, who happened to be at meeting in Boston that day with dozens of other regional energy officials.
“Folks came up to me at this meeting,” Hennessy recalled. “They kind of said, ‘Oh you waited until we got together in a room and then you had to knock off one of your units to show how important Millstone is.’”
It was an expensive, though potentially helpful incident for Dominion that followed a contentious drama at the end of the last legislative session over exactly that — the value of Millstone.
As has happened with other nuclear plants around the country, Dominion had argued it was having difficulty competing against much cheaper natural gas power – though the company has never opened its books to lawmakers – and might be forced to shut down. Similar threats in New York and more recently in Illinois have resulted in large subsidy packages – nearly $500 million a year for four plants in New York and $235 million for two plants in Illinois.
Hastily pulled together legislation in the last few days of the last session would have allowed Millstone to compete against other large-scale clean-energy providers. The bill never made it through and is now poised to be re-litigated. Commissioner Klee has said the issue of Millstone will appear in more detail in the CES. In what form is unknown.
The environmental community is to a large degree officially silent on Millstone, though privately there is little appetite for seeing it shut down before its licenses run out in 2035 and 2045. DEEP estimates that greenhouse gas emissions region-wide would go up 27 percent if that happened. And many see its continued operation as buying time to get more renewables running.
Crystal clear is that there is zero appetite for a New York- or Illinois-style subsidy.
We’ve already paid for Millstone twice, said Reed – to build it and then when de-regulation occurred. “I don’t want to pay for nuclear a third time, and I’ve been watching what’s going on in New York, and I’m not thrilled with the deals they made,” she said. “I would love to do a bilateral deal where the state makes the deal with them.” The state essentially would agree to buy the power for a period of time at a set rate, though she’s not sure it would stand up to regulatory scrutiny.
The committee’s ranking member, Sen. Paul Formica, R-East Lyme, represents Waterford, home to Millstone and its 1,100 jobs and $1.5 billion annual economic impact. He too ruled out New York-style subsidies and said having Millstone part of the CES wasn’t essential.
“Whatever works to get us there and get us there with a minimal amount of stress on everybody else is the way to do it,” Formica said. “That’s going to take some open discussions.”
Hennessy said Dominion would like a recommendation in the CES and some form of last session’s legislation. “It had the bones of legislation that was very simple and thoughtful that had a direct benefit for customers,” he said.
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