HOW WILL THE INFLATION REDUCTION ACT BENEFIT CONNECTICUT?
As the U.S. House of Representatives debates the Inflation Reduction Act, a number of Connecticut employers could see their prospects accelerate if the bill becomes law — particularly those with systems to generate clean electricity or store it, with the possibility of $370 billion up for grabs.
The Inflation Reduction Act passed the U.S. Senate with a tie-breaking vote by Vice President Kamala Harris. President Biden has indicated he will sign the law if it emerges from the House in its current form.
How much will the bill impact the economy of Connecticut, which generated gross domestic product of $309 billion last year? Until the U.S. Department of the Treasury gets its hands on a final law to parse out details, that is anyone’s guess.
But the state is home to several companies at the intersection of renewable power spanning wind and solar that could benefit, as well as other niches like hydrogen and battery storage.
The Inflation Reduction Act is expected to boost a number of incentives for clean energy, including in the solar industry. The sector employed nearly 2,300 people across 135 companies in Connecticut as of 2021 according to the Solar Energy Industries Association. While solar jobs gained 7 percent from the year before in Connecticut, that was less than half the rate of growth of New Jersey, Maine and Vermont.
Speaking this week in Hartford, U.S. Sen. Chris Murphy, D-Conn., cited a projection of 9 million new jobs in the clean-energy sector.
“It’s just going to be a lot more cost-effective to invest in wind and solar than it is in oil and gas,” Murphy said. “You will see an onshoring of jobs coming to the United States in all these new technologies — developing, manufacturing and installing these technologies.”
But U.S. Rep. Tom Cole, R-Okla., criticized the bill as “breathtakingly bad” that amounts to a greenenergy boondoggle, during a Wednesday hearing in his role as ranking member of the House Rules Committee.
“There’s nothing in this bill that will lower the price of diesel or gasoline at the pump, nothing that will make it cheaper to heat and cool homes, and nothing that will ensure energy independence for America,” Cole said. “Economists are warning us that this bill ... will make inflation worse and will slow the economy even more.”
The Inflation Reduction Act would arrive on the heels of a Connecticut Clean Air Act signed by Gov. Ned Lamont last month that among other measures would encourage the purchase of electric vehicles.
This year, Connecticut set a target of eliminating carbon emissions in the production of electricity by 2040, through a mix of incentives for solar, wind, fuel cells and other sources.
Toward that goal this year, the state passed a law that would allow Dominion Energy to seek permission to build a new nuclear reactor at its Millstone Power Station plant in Waterford, with its two existing reactors slated to be retired in 2035 and 2045. Millstone currently stores its spent radioactive rods on site, after the nuclear fuel is exhausted.
Speaking Monday on a conference call, Dominion CEO Bob Blue said he expects the Inflation Reduction Act to benefit the nuclear industry and by extension Millstone. Massachusetts lawmakers are also considering the possibility of a new nuclear plant, years after the retirement of Pilgrim Nuclear Power Station in Plymouth.
“We think Millstone is critical to the New England region achieving its zerocarbon goals — and our view on that has only grown,” said Dominion CEO Bob Blue, speaking Monday on a conference call. “We just think it’s a great, long-term asset — incredibly valuable to the region.”
With two big wind farms in the offing for the New England grid, Connecticut wants an additional another two gigawatts of capacity which the federal bill could help get across the finish line. Speaking Monday in Hartford, the commissioner of the Connecticut Department of Energy and Environmental Protection termed the federal bill “earthshaking” with its promise to help Connecticut and other states hit targets for reducing carbon emissions.
“So many of the policies that we have fought and put in place in this very building are now reflected in this national blueprint,” DEEP Commissioner Katie Dykes said Monday at the Connecticut State Capitol. “All of the work we have been putting in place are going to enable us to translate these provisions in this bill and catalyze getting these funds from Washington into consumers’ pockets really quickly.”
Orange-based Avangrid is leading the team to build the Park City Wind farm with construction to be staged out of Bridgeport, while Eversource and Orsted co-developed Revolution Wind with backing from the state of Connecticut to use New London’s State Pier. In peak wind conditions, Park City Wind and Revolution Wind would have the capacity for more than 1,500 megawatts of electricity.
Avangrid is ranked by several analysts among the top 10 producers of power from renewable energy, with the company having its headquarters in Orange. Its subsidiaries include United Illuminating, one of Connecticut’s two major transmission companies alongside Eversource.
The bill also broadens incentives for hydrogen in the production of power, with likely boosts for Linde which has executive offices in Danbury as one of the two big producers of hydrogen globally; and for FuelCell Energy based in Danbury, which makes power plants in Torrington that use a chemical process to derive electric currents from hydrogen.
The Connecticut Green Bank, which runs programs to finance clean energy and efficiency installations, is currently coordinating a legislative task force to find ways to boost Connecticut’s cluster of hydrogen companies.
“Connecticut is truly [a center] for research and development and manufacturing — not only in the country, but in the world,” said Joel Rinebold, director of energy for the Connecticut Center for Advanced Technology, during a Tuesday meeting of the task force. “A lot of people just don’t realize that Connecticut has a reputation for being the global leader of this technology — so this is very important, and it’s really our industry to lose if we don’t reinforce it.”