March 9, 2018

Lawmakers hear dueling pipeline positions

HBJ file photo
HBJ file photo
A gas pipeline marker in Berlin

The Department of Energy and Environmental Protection has not yet been able to use its relatively new authority to procure natural gas capacity for Connecticut, but amid a push from environmental groups, it says it doesn't want to give up that power either.

A bill in the Energy and Environment Committee that would roll back DEEP's authority to solicit and accept bids for pipeline projects has become the latest battleground between pipeline and fracking opponents and utilities, grid operator ISO New England, as well as others who argue that the gas-reliant region is vulnerable to price spikes and outages.

DEEP solicited bids from pipeline developers in 2016, but was forced to cancel the effort later that year after an unfavorable ruling from the Massachusetts Supreme Court.

Commissioner Robert Klee testified this week against Senate Bill 332, which would curtail his agency's natural gas procurement powers.

"While there are no immediate plans to procure natural gas infrastructure after the procurement attempted in 2016 demonstrated a lack of regional commitment, it is short-sighted to eliminate this authority, as the underlying issues of natural gas infrastructure constraints, price volatility, and potential grid reliability impacts persist," Klee wrote.

Environmental groups are arguing that those infrastructure constraints, laid out in a recent report by grid operator ISO New England, may be overblown.

"Winter reliability issues may be exaggerated," Martha Klein, chapter chair for the Connecticut Sierra Club, wrote to lawmakers weighing the bill this week. "In the recent Operational Fuel Security draft from ISO-NE, the need for gas was overestimated. In fact, as recent studies have found, our need for gas will decline in the future."

Klein contends that the push by the state and utilities for further pipeline capacity "is not likely to drive down electricity prices nor reduce greenhouse gas."

Klein and others recently co-signed a letter to Klee authored by the Connecticut Fund for the Environment's Claire Coleman, praising DEEP's recent Comprehensive Energy Strategy for shifting away from natural gas, but taking issue with the plan's statements on grid reliability and resiliency, which draw from ISO's draft fuel security report, published in January (a final version is slated for May).

The Connecticut Fund for the Environment (CFE) hired Synapse Energy to review ISO's draft report. Synapse published its review in February.

Based on Synapse's conclusions, CFE and its allies contend the modeling in ISO's draft report "is based on some flawed assumptions."

"These assumptions include extreme scenarios such as record-breaking cold weather, complete shutdown of major regional power producing facilities such as Millstone, [and] extreme gas and electric demand increases," the letter to Klee says.

They also argue that ISO is underestimating the growth of renewable energy and energy efficiency measures, which help reduce grid stress.

"The undersigned organizations are concerned that the ISO analysis's flawed assumptions will lead many to a flawed conclusion – that construction of new rate-payer funded fracked gas pipelines are necessary," the letter says.

The state's Office of Consumer Counsel also opposes removing DEEP's authority to procure natural gas, arguing that keeping that power available "is warranted given the fuel insecurity issues we face."

Both Eversource (a partner in the since-shelved Access Northeast expansion) and United Illuminating also testified against the bill.

"While it has not yet been determined that the construction of additional pipeline capacity for power generation is the optimal solution for improving fuel security in the region, it has undeniable advantages," Alan Trotta, UI's director of wholesale power contracts, testified. "Gas is cleaner burning than oil, it's able to be dispatched, and there are already several thousand megawatts of gas-fired generation in the region that are being supported by the regional markets, and not direct ratepayer funding."

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