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March 7, 2016

Reforms spotlight CT's evolving energy industry

PHOTO | HBJ File Waterford's Millstone Power Station will be one of the last remaining nuclear facilities in New England by 2019, as the industry faces increased pressure from low natural gas prices and other factors.
PHOTO | HBJ File A shared-solar program would allow a condo community to draw from one solar-generation facility.

Energy policy is ever changing in Connecticut and despite a sharp focus this legislative session on growing budget deficits, lawmakers are considering a flurry of bills that would impact Connecticut's energy landscape, particularly in the renewables sector.

Clean energy advocates are pushing policy changes that hint at broader tensions between utilities and developers of distributed generation, like solar panels, fuel cells, wind turbines and biomass plants.

Questions are also being raised about the long-term financial viability of trash-to-energy plants, the future of nuclear power in the state, and how the costs of expanded solar and other renewable energies should be fairly distributed.

The most significant proposal this year, pitched to the Energy and Technology Committee, would allow utility companies Eversource and Avangrid (formerly United Illuminating) to increase the amount of renewable energy projects they can build, own and operate by nearly seven-fold, from 30 megawatts to 200 megawatts.

Unclear foes and supporters

Senate Bill 224's supporters and opponents aren't split down predictable lines.

Avangrid favors the bill, calling it “a means to maximize the production of larger scale, in-state renewable technologies.”

But Eversource urged lawmakers to reject the measure, saying it would rather focus on the myriad projects pitched during a recent renewable energy procurement effort coordinated by the state Department of Energy and Environmental Protection (DEEP). As part of that multi-state bidding process, developers proposed 240 megawatts of clean energy projects in Connecticut, including plans to build the state's largest solar and fuel cell developments.

Several major energy developers, like SolarCity and NRG, argued the bill would put too much market power in the hands of utilities, which have been mostly barred from owning generation here since deregulation in the late 1990s. Industry association ReNew Northeast argued that utility owned renewables would likely be more expensive for customers than those provided by private competitors.

Meanwhile, Danbury's FuelCell Energy and East Hartford's Connecticut Center for Advanced Technology, which has fuel-cell partnerships, both support the measure.

Other bills on deck

DEEP is attempting to revive a stalled “shared-solar” pilot program, which is supposed to allow groups of ratepayers who can't install solar panels on their own dwellings to use renewable energy produced by shared-solar panels or clean technology.

DEEP recently submitted testimony supporting a bill that would allow Eversource and Avangrid to recover the cost of administering the two-year, six-megawatt program, a key issue that has divided the utilities and clean-energy advocates.

But there's still disagreement between both sides over how the costs would be recouped and over what time period.

The legislative fight is playing out as utilities across the U.S. try to fend off incentives for renewable power generation that could threaten their own viability.

Virtual net-metering

Connecticut farmers could benefit from House Bill 5242, which expands their access to virtual net-metering.

Currently, only municipalities and state entities can take full advantage of virtual net-metering, which allows participants to share electricity from a single renewable energy source or “assign” their renewable billing credits to other customers. The bill would allow owners of agricultural properties to also own, lease or contract for those renewable facilities.

Meantime, House Bill 5309 would require the quasi-public Connecticut Green Bank and the state building inspector to develop a standardized solar permit application for all solar projects, to speed up the approval process. But it will be up to municipalities to decide whether to adopt it.

The solar industry has pushed for years for quicker and cheaper permitting, which they argue would speed adoption of the technology and reduce soft costs.

Michael Trahan, executive director of advocacy group Solar Connecticut, argued the latest bill wasn't needed because, at the legislature's direction, the Green Bank has already worked to develop permitting processes with municipal officials.

He argued it would be more helpful to cap permitting fees and require online permit applications.

Trash-to-energy feels natural gas pressures

Senate Bill 168 would require the Public Utilities Regulatory Authority to conduct a study of Connecticut's trash-to-energy facilities, which burn approximately two-thirds of the state's waste stream.

Mark Bobman, executive director of the Bristol Policy Energy Board, which oversees waste management programs for 18 communities, said the handful of trash-to-energy plants in the state are struggling — and could financially collapse — because low natural gas prices have cut into the price they can fetch for power generated at their plants.

There are concerns that a failure of trash-to-energy plants could lead to higher disposal prices for Connecticut business and residents, since it may require waste to be shipped out of state.

Both Bobman and the Connecticut Council of Small Towns (COST) asked the Energy and Technology Committee to consider creating a renewable energy credit for trash-to-energy plants. COST also asked lawmakers to expedite completion of the study by Dec. 1.

“Energy prices have dropped to historic low levels, for the most part creating a boon for consumers but in the long run, many believe this is a turbulent and unstable marketplace,” Bobman wrote.

Bobman said trash-to-energy facilities will be vital for the state to reach its goal of hitting a 60 percent recycling rate by 2024.

Nuke plant: Don't forget about us

Connecticut's energy policy considers lots of different technologies to be “renewable,” which earns them a spot in the state's renewable portfolio standard. The RPS mandates that utilities buy an increasing amount of power from renewable sources over time, hitting 27 percent by 2020. Much of that must be “Class I” sources like solar and wind, which are among the cleanest in the RPS.

One major energy generator that's not included in the RPS, even though it produces no carbon dioxide, is Waterford's Millstone Nuclear Power Station, owned by Dominion.

Kevin Hennessy, Dominion's director of state and local affairs, reminded legislators last month that Millstone, which produces approximately 25 percent of Connecticut's installed generation capacity, will soon be one of the only nuclear plants in New England, following the planned closure of Massachusetts' Pilgrim Nuclear Generating Station in 2019. Pilgrim's owner, Entergy, is also in the process of closing a Vermont nuclear plant. A New Hampshire nuke plant operated by NextEra Energy remains operational.

“It's a challenging environment,” Hennessy said. “Gas is cheap. While [Millstone] is well positioned for now, a few years from now, I don't know what that position will be.”

Hennessy said it could be favorable for Millstone if Connecticut follows recent proposals in New York and Illinois to effectively create an RPS tier for nuclear power, but he stopped short of advocating for such changes in this state.

“The legislature has been very good at looking at the different resources they want to procure,” he said.

Read more

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