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www.HartfordBusiness.com • March 4, 2019 • Hartford Business Journal 17 OTHER VOICES Energy aggregation can benefit CT municipalities By Cynthia Arcate F or municipalities throughout Connecticut, the need for cost savings wherever possible continues to be a top priority, as so many cities and towns can no longer count on the support levels they once received from state government. And given Gov. Ned Lamont's recent remarks that state budget constraints could mean continued challenges for many municipalities, finding new, cre- ative ways to stretch limited resources at the local level is more important than ever. One of the big- gest concerns for municipalities is the cost of energy, where frequent volatility can lead to pricing spikes throughout the year that become dif- ficult to afford. This is particularly true right now with the price of natural gas so heavily dependent on weather; this presents a clear burden for a cold-weath- er state like Connecticut at this time of year, as 50 percent of the power in the region is generated by natural gas. So it becomes a double hit for cities and towns, with potential cost increas- es for both heating and electricity. But there is some good news, despite the higher costs and limited resources, and it comes in the form of energy aggregation. Throughout New England, in the 20 years since five of our six states here brought competition to the retail electricity market, municipalities have been able to join together to lever- age their buying power in the market, which in turn has resulted in better pricing and better contract terms. This is the power of aggregation, and it can work as well in Connecticut as it has worked in neighboring states like Massachusetts and Rhode Island. What needs to be done to make it hap- pen? In Massachusetts and Rhode Is- land, state legislatures created statutory exemptions from procurement rules, which allow municipalities within such buying groups to avoid having to con- duct their own competitive solicitations where such solicitations had already been conducted by the buying group. This has saved the buyers time and money, and allowed the buying group to have even more leverage in the market by virtue of providing the suppliers an assured market for their supply. For taxpayer-focused entities, this opens the door for more resources being devoted to their core responsi- bilities, and similar legislation can be equally effective in Connecticut. Additionally, the Rhode Island League of Cities and Towns, while already a successful aggregation, recently real- ized its members could do even better by joining forces with the power of a larger aggregation, and the decision led to better contract terms, pricing and new products and services for its members. Once more, this is an approach that can work in Connecticut, where 169 dif- ferent cities and towns are all searching for ways to save on energy bills. Right now in Connecticut, there are loose affiliations around different busi- ness sectors, where customers have pooled their buying power around agreements to use a single broker or a supplier, but nothing as robust as ag- gregation efforts in nearby states. The problem with Connecticut's approach is broker agreements merely save customers from having to find and negotiate a contract for services; they still have to pay the broker and they have no buying power with the suppli- ers. The lack of a statutory exemption for public entities that participate in a buying group where there has already been a competitive solicitation hinders access to buying groups, which, in turn, hinders efforts to save money. As the General Assembly continues its work this legislative session, now is the perfect opportunity for the state to consider such measures that have worked so well with our neighbors. Cynthia Arcate is president and CEO of PowerOptions, a nonprofit energy-buying consortium that serves more than 400 nonprofits and municipalities in New England. Cynthia Arcate OTHER VOICES Killingly Energy Center a boon to clean energy, economic development By Tony Sheridan W e've all read the headlines and seen the reports — facing massive state budget deficits that stretch for years to come, Connecticut is struggling to retain meaningful jobs, young people and businesses, and struggling to attract new investment. For Connecticut to succeed, our economic wellbe- ing depends on an affordable and re- liable clean energy supply to replace outdated energy sources and to attract and grow a modern economy, an economy that will allow the state to be competitive. One important step that we can take right now is to support the develop- ment of the Killingly Energy Center, a 650-megawatt combined cycle natural gas power plant using high-efficiency and low-emissions technology. In addition to improving the state's energy infrastructure, the develop- ment of the Killingly Energy Center offers many additional benefits. NTE Energy, the developer of the Killingly Energy Center, is investing $700 million to construct the facility — that's $700 million of private capi- tal in a state that is starved for private investment. Construction will also generate approximately 450 well-paid jobs, as well as 20 permanent, full- time jobs with a total annual payroll of approximately $2 million, again in a region that desires skilled jobs. Another benefit is greater energy reliability. One of the most important factors businesses look for when de- ciding to remain in or move to Con- necticut is energy reliability. In fact, when the Base Realignment and Clo- sure (BRAC) Commission was looking at closing the New London sub base, this was one of their concerns. Not only will the Killingly En- ergy Center provide new and needed economic development, it will also enhance the region's overall electrical system reliability with a cleaner and more affordable source of energy. Throughout New England, several coal- and oil-generation power plants are either retiring or at risk of retire- ment. Not only does this threaten the reliability of the region's energy sys- tem, but it also provides an opportunity for these older, less efficient and much dirtier plants to be replaced by cleaner- burning natural gas powered plants — thus improving our environment. The Killingly Energy Center also holds benefits for its host community. Once completed, the facility will be Killingly's largest taxpayer, paying in excess of $110 million to the town over the 20-year agreement, as well as an additional $5 million under the Community Envi- ronmental Benefit Agreement that the town will use for needed community projects and scholarships. The Killingly Energy Center will also fund and construct needed infrastruc- ture improvements benefiting the town and project, including replacing older natural gas pipelines, connect- ing neighboring water systems and enhancing existing roadways. These infrastructure improvements will help encourage further economic develop- ment in Killingly's industrial park. It is important to note that these economic and infrastructure benefits will be made at no cost to the town and with no taxpayer funds or incentives. Our future economic wellbeing depends on our willingness to em- brace new clean energy sources that incorporate modern technology and provide greater efficiency. The Eastern Connecticut Chamber of Commerce stands with those willing to bring re- sponsible development of cleaner and more reliable energy to our state. Tony Sheridan is the president and CEO of the Chamber of Commerce of Eastern Connecticut. Tony Sheridan