January 19, 2008
UTILITY COMPANY PROPOSAL SHOULD OFFER OPTIONS
FOR LOCAL RENEWABLE ENERGY
Editorial by Rep. Terry Backer and Sen. Bob Duff
Reading the utility company's 260 page plus Inaugurated Resource Plan, which looks forward at electric demand, supply and cost is a bit like eating a plate of beans. It's hard to digest and it stays with you. Given that these documents are written by the utility companies, as required by law, they will always be a bit self-serving. After all, they make more money when you use more electricity so they continue to push their own interest a bit. Utilities are private companies after all. Unless there is a possibility of losing shareholder value. They then claim to be public service companies.
In many of their scenarios they appear to be correct, yet their proposed solutions have an opportunistic twist. Take renewable generation as an example. They correctly point out that there is precious little in the way of renewable energy possibility in Connecticut, at least as they have defined affordable. The utilities report that all the New England states have aggressive renewable standards in their laws. This means higher renewable cost and renewable energy credits. They call for a revamping of the renewable standards and generation implementation in an undefined manner. We read that as: forget renewable energy in Connecticut.
Instead they proposed a regional transmission effort for renewable energy from which they earn a healthy percentage on their investment of around 13 percent and fees to transmit the electricity. Yet they don't report where the energy would be supplied from. Canada, that's where.
Large Canadian hydro resources could be transmitted via regional transmission lines to New England. All the utilities along the way would get their share on return on investment and other costs. It's a great plan for the shareholders of Northeast Utilities and United Illuminating, but what about the consumers?
There's one huge problem with this scenario, Canada is also struggling with issues concerning global fuel supply and demand. Global oil production is waning and it is becoming more expensive to extract oil. Canada is not exempt from global Peak oil production and escalating cost and it has its own energy needs.
Canada is finding less natural gas and appears to have peaked in its production. Its oil resources from tar sands are very expensive to produce, and are currently limited by other resource issues such as shortages of water. The time will come soon enough when the Canadian people will need their own resources for themselves. As Americans we have become accustomed to reaching outside our borders for our needs, but the ability of the world to provide these resources is far less than it was and countries want to protect their own people.
Germany's skies are about 10 percent darker than those in Connecticut, yet Germany's leadership has worked very hard to replace up to 20 percent of their electric needs with solar energy — and solar energy isn't cheap. Still amid the wailing and clenching of teeth Germany has persisted knowing that the world can not supply cheap energy to them.
At some point we must recognize that we need to drastically reduce our consumption patterns and bite the bullet on the higher capitalization cost of renewable fuels. In the end the utilities won't make as much if we use locally installed renewable generation; be it solar, fuel cell, wind power etc., but at least we will have it available … and we'll know where it is.
Backer, D-Stratford, and Duff, D-25, are members of the energy committee and co-founders of the Legislative Peak Oil and Natural Gas Caucus.