By Michael Kuser
CROMWELL, Conn. — In Connecticut, “50 by 50” does not refer to the state’s renewable energy goals by the half-century mark, but to the projected rise in sea level: 50 centimeters by 2050.
Speaking Tuesday at the Connecticut Power & Energy Society’s Future of Energy Conference, Robert Klee, commissioner of the state’s Department of Energy and Environmental Protection (DEEP), pointed out that the Connecticut Institute for Resilience and Climate Adaptation had just briefed his staff the previous day on estimates for localized sea level rise.
“That’s a fundamental change in the way we need to plan for infrastructure along the coast,” Klee said.
But Klee touted the state’s grid-scale clean energy procurements and low- and zero-emission renewable energy credit programs — as well as the work of the Connecticut Green Bank — in helping develop a sustainable energy framework.
“You can’t drive around Connecticut anymore without seeing rooftop solar somewhere, on homes, on businesses — and that’s a real achievement,” Klee said. “And microgrids were kind of a sleeper hit. I go to microgrid conferences, and folks in other states are always amazed that we have six that are operational. Most other states are still [at the stage of] drawing boards or concept.”
Utilities Focus on Customers
Penni McLean-Conner, chief customer officer at Eversource Energy, serves on the Boston Green Ribbon Commission, which gathers business, institutional and civic leaders to seek ways to fight climate change.
She explained that her company built its newest substation in Boston’s Seaport neighborhood 23 feet above sea level, designed to handle 150 mph winds and with 80 pilings that sink into the bedrock below.
“Why? Because we’re right on the water,” she said. “We know the flooding is going to occur as we look at the climate models going out to 2050, so if we’re going to put in an asset that’s going to last another 50 years, we need to be thinking about resiliency.”
But whether adapting to climate change or using new technologies to provide a reliable energy platform, the utility of the future will be dramatically different from today in that it will be grounded in the voice of customers, McLean-Conner said.
UIL Holdings CEO Anthony Marone III agreed, saying utilities need to match offerings to customer wants.
“You can have all the technology in the world, but not every customer wants to pay for it,” Marone said. “We can’t just keep putting more gadgets on the system if there’s not a value proposition that makes sense.”
Mike Calviou, senior vice president for regulation and pricing at National Grid USA, said the utility of the future has to be more agile to meet varied needs, driven by three primary forces: decarbonization, decentralization and digitization.
“On regulatory innovation, we’re absolutely convinced that the traditional, backwards-looking, rate-based regulated utility just really doesn’t make sense in the environment we’re moving into,” Calviou said. He cited electrification of transportation as the most exciting opportunity for utilities.
Need for Market Evolution
On Energy Secretary Rick Perry’s call earlier this month for price supports for coal and nuclear plants, Dean Ellis, Dynegy senior vice president for regulatory affairs, said “I would argue there’s a big difference between a sales tax break upstream or a property tax agreement, and paying someone to produce electricity when it’s not economic to do so.” (See FERC Chair Praises Perry’s ‘Bold Leadership’ on NOPR.)
Subsidies lead to more subsidies, and while production incentives incent a build-out of a particular resource type, they also affect other resources competing in the market, Ellis said.
“We definitely agreed with the [Department of Energy’s] issue that there needs to be some evolution here with the markets, but the way they went about it was absolutely wrong. It’s a solution looking for a problem,” he said. “If the DOE is going to pay us to keep 90 days of coal on-site, we’ll put coal in the cafeteria if we have to, but that’s not the best way to go about incenting the outcomes. If one of the outcomes is to increase grid reliability, then let’s have a really honest conversation about what a reliable grid looks like in the future.”
Carbon pricing looks better than subsidies to Stephen Molodetz, vice president for business development at Hydro-Québec US.
“We’re one of the few suppliers who thinks the real solution is to price carbon into the market,” Molodetz said. Getting participants in a multistate RTO like ISO-NE to agree on a pricing mechanism “seems to be the Holy Grail,” he added.
“We’re currently working hard [on carbon pricing] in New York, again a one-state ISO … and to be honest there, I still think it’s a longshot,” Molodetz said.
The X Factor
Katie Dykes, chair of Connecticut Public Utilities Regulatory Authority (PURA), asked industry executives what “X factors” they’ve considered in the their company planning.
“If you look at some of the recent history of the emergence of the New England markets, there’s a lot of unexpected surprise factors that have created the landscape, the shale gas revolution being one,” Dykes said. “Who would have guessed that we were going to have people fretting about how to deal with very low wholesale prices?”
Molodetz said that, in Hydro-Québec’s six partnered bids for Massachusetts’ recent clean energy procurement, he was surprised by the high level of public engagement in the siting processes. And that’s not a negative point, he added. (See Hydro-Québec Dominates Mass. Clean Energy Bids.)
“Increased environmental stakeholder involvement will lengthen the siting process, but we’ll have better projects for it,” he said. “The demand for clean energy is large and it’s growing. Québec peaks in winter, while New England peaks in summer, so matching those peaks in connected transmission is great for consumers and for grid operators.”
Molodetz said Hydro-Québec foresaw growing demand for renewables and began expanding its hydro capabilities a decade ago to enable the company to increase its cross-border transmission. The company’s largest customer is still the province of Québec, with New England a distant second and New York behind that.
Elisabeth Treseder, senior regulatory adviser at DONG Energy North America, pointed to the technological leap in capability for renewable resources. She said renewable energy providers often look to the states for leadership on procurement, but that everyone benefits from evolving technology.
“We recently decommissioned our first offshore wind project, built in 1991, which produced as much in 25 years as one of our new projects can generate in 16 days,” Treseder said.
During the conference, Commissioner Klee also addressed a question about state support for Dominion Energy’s Millstone nuclear plant.
In June, Connecticut’s General Assembly failed to pass a bill that would have allowed the 2,111-MW facility to bid into the state’s procurement process (S.B. 106). The following month Gov. Dannel Malloy issued an executive order requiring state officials to assess the plant’s economic viability and determine whether the state should provide support it financially. The governor also directed DEEP and PURA to assess the viability of all forms of renewable energy and to report their findings by Feb. 1. (See CT Gov Orders Financial Analysis of Millstone Plant; Commenters Seek Broader Response on Millstone.)
“Millstone is the largest single power plant in New England and is essential in terms of being a carbon-free resource and to the grid’s reliability,” Klee said. “The flip side is, because it is so large, our normal set of tools that we traditionally use don’t always seem to fit or may start to cause intersections with the regional grid and its market rules and components that are new and different, uncharted territory.”
The plant is also essential for the region’s winter peak problems, which are exacerbated by gas pipeline constraints, he said. The state is currently getting those gas-free and carbon-free reliability attributes for “free” in paying wholesale with no adder, Klee said.
“That valuation process is complicated and that starts getting into things that are more in the crucible of a legislative session,” Klee said. “The answer is still unknown and it gets more complicated by the week as DOE is inserting itself into this space with their [Notice of Proposed Rulemaking] on reliable or 90-day sources of baseload energy.”
Mary Sotos, deputy commissioner for energy at DEEP, encouraged participants to comment on the docket her agency has opened on Millstone. “We’re accepting comments throughout the proceeding and are required to deliver the results of that study to the legislature in the beginning of February,” she said.
Dynegy’s Ellis said the DOE proposal talked about preserving baseload energy because it is more resilient.
“Again I would argue that all resource types offer different reliability attributes,” Ellis said. “Natural gas-fired plants complement the intermittency of renewable energy better than baseload energy does. … If we’re going to pick and choose which reliability attributes we want to value, we need to take a look at all of them.”