Gov. Ned Lamont had a few exactly-what-did-he-mean-by-that moments in his State of the State address to lawmakers Wednesday. One in particular: His shoutout to natural gas and nuclear power as necessary to ensure an adequate and affordable supply of electricity over the next decade.
“Nuclear power already provides most of our carbon-free power. That’s why we’re working with the federal government to find ways to expand nuclear capacity here in Connecticut,” he said, then added, “Before you rule out natural gas…that’s where most of our power comes from and will for the foreseeable future, especially without more nuclear power.”
So, is Lamont about to press for an expansion of pipeline capacity to the relatively cheap natural gas produced in the Marcellus Shale fields of western New York and Pennsylvania? Is there an energy company open to bringing in the next generation of nuclear technology — SMRS, or small modular reactors.
Not exactly. In an interview, the governor said his primary intent Wednesday was to discourage lawmakers from taking away any of the few policy options to expand the supply of electricity or bring down its cost, which generally ranks among the most expensive in the U.S.
That places him between the competing camps of clean and cost: Environmentalists who say carbon-free energy must be priority one, and opponents of procuring power from renewable sources that are more expensive than electricity generated by burning natural gas, including large-scale solar and off-shore wind.
Lamont recently rejected one offshore wind project on the basis of cost, a decision applauded by Sen. Ryan Fazio of Greenwich, the ranking Republican on the Energy and Technology Committee. But Republicans also propose statutory cost limits on future projects, essentially tethering them to market prices pegged to gas.
That is a step too far for Lamont, who says no sources of power should be off limits as the state faces a continuing struggle to balance reliability, affordability and climate impact in procuring electricity. When it comes to power, his administration’s motto is “all of the above.”
“I don’t want them to say, ‘You’re never allowed to pay more than two or three times the price of natural gas,’ ” Lamont said. Especially if “it’s the only way I can add generating capacity right now, because I can’t bring in more natural gas.”
Rep. Jonathan Steinberg, D-Westport, the co-chair of an Energy and Technology Committee that typically strives for a bipartisan approach to energy policy, said affordability is a shared goal, but the governor can expect support in defeating any arbitrary limits on the cost and sources of future procurements.
“I agree with him,” Steinberg said. “But I don’t necessarily like the moniker of ‘all of the above.’ ”
Fazio said, overall, he sees Lamont as an ally in making affordability a larger component in energy policy.
“I think first of all the governor believes there should be an upward limit on what consumers pay,” said Fazio, who nonetheless acknowledges the governor’s options on sources of power are limited. “That doesn’t mean they should have infinite discretion, and I think consumers should have a right to legal guardrails as to what they will pay in the future.”
Some of the likely conflicts in energy policy this year were evident Thursday at the committee’s organizational meeting, where members broadly outlined their goals.
Sen. Norm Needleman, D-Essex, the other co-chair, said energy policy must rest on a three-legged stool of cost, reliability and climate.
“We are always looking at cost to the extent that we can control it in the deregulated market. We’re looking at reliability,” said Sen. Norm Needleman, D-Essex, the co-chair. “And I’m always focused on environmental goals that, in my world view, that’s a lot more to do with air quality and some of the things that really affect people’s lives directly.”
Rep. Nick Gauthier, a newly elected Democrat from a district that includes Waterford, the home of the Millstone nuclear power plant that produces the majority of Connecticut’s carbon-free power, warned against increasing a reliance on natural gas or other fossil fuels that contribute to climate change.
Rep. Joe Canino, a Republican freshman from Torrington, said voters were clear as he campaigned: Cost must be addressed.
Gauthier unseated a Republican in November; Canino, a Democrat.
Rep. David Yaccarino, a Republican who has represented North Haven for 14 years, is returning to the committee he served on early in his tenure to advocate for a greater reliance on market forces that favor electricity generated by burning natural gas.
“I think we need to listen to constituents and the market,” Yaccarino said. “I don’t think it’s that complicated.”
Eversource and United Illuminating, the state’s two major electric utilities, are primarily in the regulated business of distributing electricity, not generating it. They purchase power in competitive markets, though not without state intervention.
The state mandates the purchases of some power from renewable sources and a higher price for Millstone.
In 2017, when Dominion Energy complained that Millstone could not stay economically viable while competing with cheap natural gas, the General Assembly passed a law dictating that Eversource and UI, together, purchase at least half of Millstone’s output at a higher price negotiated by the state Department of Energy and Environmental Protection.
The law, which passed primarily with Republican support in a year when they occupied nearly half the seats in the General Assembly, expires in 2029, and the Lamont administration has begun preliminary discussions about how to keep Millstone open..
Dominion’s new chief executive, Robert Blue, was in Hartford on Thursday for separate meetings with key lawmakers and the governor. Steinberg said Blue and legislators spoke generally about the potential of additional nuclear capacity through small modular reactors.
SMRs constructed in Georgia have proven to be expensive, and Lamont said there is an industry wariness about trying to build them in markets where power generation is deregulated and there is no guarantee of recovering costs.
“They don’t like Connecticut, because we’re deregulated. ‘The rate payers are not going to pick it up. My shareholders are,’” Lamont said. “So I’ve got to work through that.”