Hartford Business Journal

20 Hartford Business Journal • November 28, 2016 www.HartfordBusiness.com OPINION & COMMENTARY EDITORIAL CT's clean-energy policies must focus on affordability C onnecticut's nascent fuel-cell sector experienced a setback recently after two major state clean-energy procurements failed to select any of the industry's pro- posed projects. As reported by HBJ News Editor Matt Pilon, the Department of Energy and Envi- ronmental Protection (DEEP) last month notified winning bidders in two state-run energy programs, which are expected to lead to the purchase of nearly 800 megawatts of clean-power generation by utilities in Connecticut, Massachusetts and Rhode Island, helping each state reach toward their respective renewable-energy goals. Solar developers were the main winners in the selection process, while about a dozen proposed fuel-cell projects were left on the sidelines, mainly because their bids were more expensive than others, and could have led to higher energy prices in the state. The procurements represented a unique opportunity for Connecticut fuel-cell manu- facturers to capture significant revenue from multi-megawatt plants, which would argu- ably have a greater economic impact in the state than some other projects. Despite that, we agree with DEEP's decision to base its selections mainly on energy prices. Connecticut's efforts to lower its greenhouse gas emissions, which have intensified under the Malloy administration, are important to the future of the planet, but the state's clean- energy policies must not overburden individual and business ratepayers — the end users who must ultimately bear the added costs associated with investing in alternative energy. Our state's energy costs are already a drag on the business climate. In fact, accord- ing to a study done by financial website Wallethub earlier this year, Connecticut's energy costs are the highest in the nation, totaling more than $400 a month for the average consumer. And energy prices continue to be a major concern, particularly for manufacturers. For example, in a live poll conducted by the Connecticut Business and Industry Asso- ciation during its annual energy conference in October, 49 percent of audience members said Connecticut's top priority for energy policy should be to lower energy bills. We aren't blaming policymakers for the entire problem — Connecticut's lack of fossil fuels and inadequate gas supply are major drawbacks. But at a time when Connecticut remains mired in a fiscal crisis to which there appears to be no end in sight, and with economy continuing to shed jobs, policymakers must focus on ways to improve the affordability of living and operating a business here. It should be noted that the state has otherwise been quite friendly to its fuel-cell industry, offering favorable incentives and policies that have helped the sector grow into a notable manufacturing niche, which claimed 2015 revenues of $726 million and 3,400 direct, indirect and induced jobs. We should continue to support fuel-cell makers by providing a highly educated workforce and stable business environment, but awarding them major projects at the expense of ratepayers isn't good policy. Gov. Dannel P. Malloy rightfully agreed with that sentiment, commenting this month, "One of the things you don't want to do is burden the people of Connecticut with higher long-term energy costs, because that's actually something we've worked very hard at combatting and made substantial progress on." Though fuel-cell makers struck out on their major, multi-megawatt proposals, there may be some consolation. Malloy indicated he is open to discussing policy shifts that could bolster their sales. But the market should largely decide which technologies succeed or fail, and we hope DEEP continues to place a high value on procuring the cheapest possible clean energy. The health of our state's business climate and economy depend on it. n OTHER VOICES Despite struggles, opportunities exist in CT's construction industry By Luke S. Ebersold C onnecticut's construction industry has recovered somewhat in recent years from the Great Recession of 2008-09, though the pace of that recovery remains slower than the national average. As a result, according to a recent report from a leading national construction trade association, Connecticut has the eighth-highest rate of construction unem- ployment of the 50 states, with its rate of 6.9 percent far exceeding the national average of 5.2 percent. Why hasn't Connecticut's construction industry recovered as well as so many other states in the nation? Much of it gets attributed to what has become a very familiar refrain for our state — the high cost of doing busi- ness in Connecticut. Taxes, fees, energy costs and state regu- lations all play a part in this, and the bot- tom line simply is it costs more to build in Connecticut than it does elsewhere. But this does not have to just be bad news for the construc- tion industry. Despite the sluggish recovery and relatively higher cost of operating here, opportunities do exist, particularly when we consider we live in the state with the highest median income and one of the best skilled workforces in the nation. Where do these opportunities exist? They start at the local level, with cities and towns investing in economic development and work- ing to bring more businesses into the commu- nity. State funds and grants exist for develop- ment projects, which create new, well-paying jobs, and those municipalities willing to make those investments can provide a boost to the state's construction industry. Next is taking advantage of the state's renewed focus on transportation improve- ments, which not only lead to more direct construction jobs in the short term, but can also spur new development along improved routes and lead to more jobs in the long term. In addition to the completed CTfastrak bus route, there are a number of major highway projects either underway or in the planning stages right now, and all of them will require well-trained construction workers to com- plete them. As the state continues to invest in improving its roads and highways, more work will be there for the industry. Given the level of competition that exists in the construction industry, companies should look inward to ensure they are giving themselves the best chance at success. This means making the right technological and equipment upgrades — a recent study our firm did with the Connecticut Business and Industry Association (CBIA) showed that this is the area where most businesses are cur- rently making the most investments. Operating a modern, state-of-the-art con- struction business means operating with more efficiency and innovation than ever before, and those companies that make these investments will have the best opportunities to succeed. Finally, there is education, another key investment construction companies can and should make with their time and their resourc- es. The state has made an increased effort in recent years to attract more stu- dents to technical high schools and trade schools, and this is where much of the future con- struction workforce can be found. But businesses can further enhance these efforts by partnering with educational insti- tutions to create job- training programs, apprenticeships and internships to provide real-world experience to those preparing for their careers. The race to get the best workers is always a competitive one, and engaging at the educational level could provide construction businesses with a competitive advantage. While the construction industry in Con- necticut continues to have its challenges, businesses should keep their eyes open to the opportunities for growth and modernization as they arise. When individual companies show improvements, the industry as a whole can soon follow. That is reason for everyone to remain hopeful. n Luke S. Ebersold, CPA, is a partner with Blum- Shapiro, the largest regional business adviso- ry firm based in New England, with offices in Connecticut, Massachusetts and Rhode Island. HARTFORDBUSINESS.COM POLL Do you plan to spend more or less on holiday shopping this year, compared to 2015? ● More ● Less ● Same To vote, go online to HartfordBusiness.com. Last week's poll results: Will a Trump presidency help or hurt CT's ability to attract federal funding? 42.6% Help 44.4% Hurt 13.0% No change Luke S. Ebersold ▶ ▶ The race to get the best workers is always a competitive one, and engaging at the educational level could provide construction businesses with a competitive advantage. Send Us Your Letters The Hartford Business Journal welcomes letters to the editor and guest commentaries for our opinion pages. Electronic submissions are preferred and welcome at: editor@HartfordBusiness.com.

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