STATE UPDATE: Advocacy Wins Balanced Approach to Hydro

Posted by Peter Rothstein on Jun 19, 2013 5:13:00 PM

hydropower connecticut Peter RothsteinGuest post by Peter Rothstein, President of the New England Clean Energy Council, an AEE partner organization. 

The recent passage of a bill updating Connecticut’s Renewable Portfolio Standard (RPS), S 1138, was the culmination of a protracted education, advocacy and negotiation effort, with significance for the entire New England region.  

The New England Clean Energy Council (NECEC), AEE’s regional coalition partner in the six New England states, mobilized a major effort involving member companies, an in-state coordinator, and NECEC’s Boston-based team to build support for the critically valuable portions of the bill and also work to modify provisions that could have dealt a major blow to renewable energy growth.

In March, Connecticut Gov. Dannel Malloy proposed legislation expanding the state’s RPS in two ways: 1) creating a new long-term contracting requirement for procurement of RPS Class I renewable power – a positive move, which would lead to significantly reduced capital costs and lower power prices to consumers; and 2) inclusion of a second category of long-term contracts that would make large Canadian hydropower qualify for the RPS – a change that would result in an unprecedented shift of financial incentives from emerging technologies to a mature technology, large-scale hydro.

For New England, Canadian hydro is a secure, clean, affordable energy resource that currently provides roughly 8 percent of the electric power for the region. It could provide more with additional transmission that would transport the power to population centers. To date, plans for expansion have hinged on the need for additional transmission. Several projects have been proposed, including some on the Maritimes route through the Gulf of Maine, and a controversial line, called Northern Pass, which would cut through the White Mountains National Forest. Although states like Massachusetts are counting on additional Canadian hydro to meet their emissions reductions goals without offering any sort of financial incentives, some critics in states across New England have seized upon the hydro resources next door as a way to undermine support for wind and solar development under state RPS.  

That the hydro-for-RPS argument showed its face in Connecticut, which has been a leader in advanced energy in recent years, was a surprise – and it came at the worst possible time. With the one-year extension of the federal Production Tax Credit approved by Congress, wind energy developers, in particular, were set to move forward with the renewable energy projects needed to meet the region’s growing demand for renewable power, and were looking to the long-term contracts proposed by Malloy as a financing tool. Qualifying large-scale hydro for RPS in Connecticut, however, would have skewed the market for long-term contracts and eaten up the market for RPS-generated Renewable Energy Credits for years to come. Together, these changes would have tanked the market for new renewable energy development other than Canadian hydro.

In response to this challenge, NECEC mobilized to ensure that large hydro would not displace other qualified renewable energy sources. In doing so, NECEC sought to preserve the RPS as a way of bring new energy technologies to market while sharing the Governor’s vision of bringing cheaper as well as cleaner energy to Connecticut.

While opponents of the legislation from the environmental community engaged in a negative campaign, even trying to kill the entire bill, NECEC took a balanced, strong, but engaged approach to improve the bill, stressing the benefits of renewable energy development to the regional economy, and pointing out the risks involved in subsidizing development of remote resources with unknown transmission costs. Many legislators who lacked detailed knowledge of energy markets and advanced energy trends responded very positively to NECEC’s engaged approach and fact-based arguments, and gravitated toward a compromise that balanced legitimate public interests.

The bill as signed by Gov. Malloy should help to advance clean energy in Connecticut and New England, bringing economic, energy and environmental benefits to the States’ citizens, businesses and industry. In 2016 and beyond, it allows large hydro for compliance with the state’s RPS only if state officials have determined, after a three-stage procurement process, that there is a shortage of Class I projects for meeting the state’s nation-leading renewable energy requirement of 20% by 2020.

This resolution is consistent with NECEC’s vision of large hydro as a complementary resource within a diversified advanced energy portfolio, cleaning the electricity system, making energy more secure and reliable, and continuing to grow regional jobs and economic development. 

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Topics: State Policy, Guest Post