Energy Plans

Yesterday, Governor Rell proposed her energy plan to solve the state's energy problems:

NEWINGTON -- Gov. M. Jodi Rell proposed a four-year, $500 million energy plan for Connecticut on Monday, marking one of her first major public policy initiatives in this year's race for governor.

It's interesting that Governor Rell seems only to tackle problems once they become just that, a problem. The DeStefano team wasted no time in calling her out on this:

"Connecticut has the highest electric rates in the continental U.S. and rates are about to rise again in a few months, just as winter arrives," spokesman Derek Slap said. "Incredibly, Governor Rell offers no help. It's another example that she just doesn't understand the simple fact that you can't afford to live in Connecticut anymore."

How long have Connecticut energy prices been high for? How long has Governor Rell been Governor? Is she chronically behind the curve?

Update:

1. Read DeStefano's plan here.
2. Read Governor Rell's plan here.

Update II: GMR has a very well thought out comment on the substance of the plans:

Neither one of these candidates proposes adding more power plants, as that would not be politically acceptable I guess. Instead, they speak of various conservation schemes, and a little bit about clean fuel. If Connecticut wants lower electricity rates, it has to build more power plants. Otherwise, we're going to keep having to buy power from other states and from Quebec Hydro.

JDS, and I am sure Rell also, is opposed to the LNG terminal in LI Sound. So my question is, where should there be a LNG terminal in the tristate area? If having a terminal 11 miles out at sea is not appropriate, would anyone like to volunteer a place on land for it? Because both NY and CT talk about increasing natural gas as a source for power generation, and since pipeline capacity is full, where is this natural gas going to come from?

JDS says he's going to take $50 million from the pension fund and invest in "high performance energy projects with high returns." Hey, JDS, in case you missed it, there are several thousand investment funds out there all looking for the high returns investments. How is it that state bureaucrats in Connecticut are going to find these high return projects that investment professionals are all missing?

Connecticut has low population growth, but it has some population growth: between 1990 and 2005, we added 223,181 people, or 6.8%. If this growth rate keeps up through 2020, which is when a lot of Jodi Rell's goals are supposed to be met, that'll be an additional 238,334 people.

These people are all going to use electricity (and if they don't, we'll have bigger problems to deal with). Yet there's Jodi Rell saying she's going to reduce peak electric demand by 20% by 2020. How in the world is she going to get each person to use 25% less electricity (because there'll be more people)? As I look around Fairfield county, it seems like many small houses are being replaced by large ones. These will presumably require more energy to cool and heat (not in direct proportion to size because of improvements in HVAC systems and insulation, but when you replace a 2,200 square foot house with a 4,900 square foot house, the new house is still going to use more energy).

We've got entities like Royal Bank of Scotland moving into Stamford, with the largest trading floor in the world. That'll take some electricity.

The fact is, we need more power plants. That's going to get electric rates down. Only problem with power plants is that there's probably no place in the state that they can be built. Meanwhile NY state politicians talk of closing Indian Point, even though that nuclear plant supplies about 11% of New York's energy needs.

I'm not going to pretend to know much about our energy problems, or how to solve them. Nuclear power always seemed like an attractive alternative to me, but in a state as densly populated as CT I can't imagine any new nuclear power plants. Conservation I think is also important in the long run, but it's always a balancing act.

Another great comment from Aldon Hynes:

Energy policy is a complicated area, and I won’t pretend to be an expert in it. I will recommend a few resources that I’ve always been impressed with. One is the World Changing blog. It covers a lot of interesting areas in innovation in sustainability. Another is Energy Outlook. I got to know Geoff, who writes this blog, when he lived in Greenwich. He is an energy strategy consultant, having worked for big oil.

GMR does make some very good points, thought I would quibble with some of them. Specifically, the assertion that the only way to lower energy costs is to build new energy plants. This is an over simplification. The price of electricity is a function of the price of the fuel used to make the electricity. No matter how many oil-based plants you build, the price of the electricity won’t go down if the price of oil keeps going up. The same applies to natural gas.

Oil has been coming off of its recent highs, but is likely to remain high. Natural gas is down considerably, yet is highly volatile. As an aside, Amaranth Partners, a large Greenwich based hedge fund recently suffered enormous losses due the recent decline in the cost of natural gas. (Ref: Toomre Capital Markets)

So, looking at ways to conserve and to move away from oil and natural gas based electricity are important. The City of New Haven has done a couple interesting projects in this area. For example, the Barnard elementary school in New Haven recently installed 272 solar panels on its roof, making it the second-largest solar panel project in the state. (Ref: The New Haven Independent). New Haven is also the home of Connecticut’s first fuel cell power plant. (Ref: Yale Daily News. While the fuel cell plant runs on natural gas, and doesn’t really address the supply problem posed above, it is a cleaner, and I believe more efficient fuel plant, that faces less local opposition.

An advantage of such fuel cell plans is that they can be smaller and built closer to where the electricity is being used. This cuts down on the transmission costs of electricity. However, I don’t know what sort of offset is tied to the delivery of the natural gas.

Connecticut is a center of excellence for fuel cell technology and whoever gets elected Governor would be wise to focus on promoting fuel cell technology in our state.

Another area of interest is cogeneration. I seem to recall that there were some very successful cogeneration projects in both Stamford and New Haven. Perhaps others can recall and comment on some of them.

As to conservation, Anon(10:00) is right to point out that more space does not necessarily mean more power requirements. We can and should be building more energy efficient buildings. We should be filling them with more efficient equipment. As an example, flat panel computer screens use substantially less energy. Intel and AMD are fighting it out to make more energy efficient chips. This doesn’t have a big effect on most of use individuals with a PC or two at home, but when you take a large trading operation, such as RBS which GMR mentioned, this can have a very big energy impact. The energy policies need to be encouraging companies to be more efficient in these areas.

I can’t really comment on which plan would really address our energy issues more effectively. When I worked for Mayor DeStefano’s campaign in 2005, I saw that his approach was well thought out and something he had been working on in New Haven for quite a while.

I am glad that both candidates have energy plans and I hope we have a vigorous discussion that will result in beneficial refinements to both plans.

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Susan Haigh. "Rell Proposes Energy Plan". Hartford Courant. 9/19/2006.