In 2013, Rodney Powell will develop and execute a plan to forever alter Connecticut’s energy landscape. And he’ll figure out exactly how businesses and homeowners will pay for it.
For the past four years, Powell has been one of the state’s biggest cheerleaders in making natural gas the home heating fuel of choice in Connecticut. As president of Northeast Utilities’ natural gas businesses, he will play an integral role in bringing that concept to reality now that the state is poised to commit to the fossil fuel.
“It is a lot of moving parts and some commitments,” Powell said. “There are still a lot of tough parts that have to be cleared.”
Shortly after Powell came onboard as president of NU’s Berlin-based subsidiary Yankee Gas in January 2009, the company’s director of natural gas planning, Edna Karanian, approached him about how the increased extraction of natural gas in shale formation in the West and Midwest was causing supplies to increase and prices to plummet. Customers could switch from heating oil — Connecticut’s current home heating fuel of choice — to a fossil fuel that cost less than half as much and emitted 30 percent fewer greenhouse gases.
“That was the beginning of what now has become a four-year process,” Powell said. “We spent a lot of time just to confirm in our own heads that this would be sustainable.”
In October, Gov. Dannel Malloy and the state Department of Energy & Environmental Protection agreed with Powell and NU and put forth a $7 billion plan to convert more than 300,000 customers to natural gas home heating.
Yankee Gas stands to add roughly 100,000 customers to its current 200,000 customer base throughout the multi-year expansion. The state’s other natural gas utilities — Connecticut Natural Gas and Southern Connecticut Gas — also should see about 100,000 new customers each.
This year, Powell and Yankee Gas will work with DEEP to develop a plan for making it happen, including which areas of the state will have the natural gas opportunity.
The biggest question to be answered is how the many natural gas customers will pay for the expansion, as Malloy is reluctant to use any taxpayer money or bonding for the expansion. Proposals now include spreading the cost of the expansion over the entire customer base or splitting the cost between current and new customers.
Powell expects Yankee’s plan to be approved by the Public Utilities Regulatory Authority by the end of the second quarter. The actual construction of the pipelines will begin in late 2013.
“2013 will be really a startup year,” Powell said. “I expect 2014 to see more activity.”
The other publicly visible part of Powell’s 2013 will be his continued integration of the NU natural gas operations. In April, the company merged with Boston-based NStar, bringing its natural gas subsidiary under Powell’s purview along with Yankee Gas.
NU is looking to greatly expand its natural gas operations in Connecticut and Massachusetts. Powell said NStar Gas can use some of the lessons learned by Yankee’s expansion to service new areas in Greater Boston, while Yankee can learn from NStar Gas’s successes, particularly the high percentage of customers within existing service areas who subscribe to the utility.
“We are going to take all the best practices from both companies,” Powell said.
