February 9, 2018

CT Construction Digest Friday February 9, 2018

Warning of rolling blackouts puts natural gas in perspective

Gov. Dannel Malloy and other New England governors showed foresight in 2013 when they called for upgrading and modernizing natural gas infrastructure throughout the region, in part to complement the growing use of intermittent solar and wind energy.
Unfortunately, inconsistent policies and litigation have so far blocked needed expansion. Now, the region is seeing the consequences of inaction, with Bloomberg reporting Dec. 27 – even as the full impact of an extreme and prolonged cold spell had not yet hit — that “spot prices more than tripled…and turned the region into the world’s priciest gas market.”
In November 2013, the Connecticut regulatory authority approved a natural gas expansion plan.  Gov. Malloy noted that it was “another step to help our residents and businesses lower their energy bills….”  A month later, six New England governors jointly called for “significant investments in our region’s energy resources and infrastructure.”  Among the reasons, the governors cited natural gas infrastructure “to balance intermittent generation,” which is solar and wind energy.  They committed themselves “to achieving consensus …. consistent with laws and policies across the region.”
Consensus is still lacking despite Gov. Malloy’s efforts and those of other governors.  After initial efforts, subsequent setbacks revealed the need for better clarity and more consistency among the states to encourage infrastructure investments.
Adding to growing concern throughout the region, the organization responsible for keeping the power flowing in New England – ISO New England – issued a report January 17 finding that in 23 scenarios analyzed for the winter of 2024/2025 “all but the most optimistic case resulted in rolling blackouts.”
Last October, the site manager at a manufacturing facility in Wallingford warned that “addressing issues related to high costs and the lack of pipeline capacity is critical to our future success.”  Employers throughout New England have issued similar warnings.
While energy prices have risen dramatically, there are other consequences. On Jan. 5, oil, used primarily as a back-up fuel, generated one-third of the region’s electricity. Cleaner-burning natural gas, normally accounting for about half the region’s generation, provided just 16 percent because of inadequate fuel supply. Solar and wind were providing just 2 percent.
There has been good progress since 2013 deploying solar and wind resources.  Expanding renewable energy resources is a good thing. But wind and solar are intermittent resources that require natural gas generation to fill the gap. To ignore the severe consequences of inadequate gas supplies impacting the economic health of the region runs counter to the foresight shown by governors in 2013.
Someday — decades from now according to ISO New England — the electric grid may be powered by renewable energy backed up by battery storage. For now, the needs of consumers expecting electricity around the clock, including major employers, must still be met by natural gas-fired power plants working in concert with intermittent power from wind and solar.
Utilities, such as Eversource, for the most part have exited the business of generating electricity in response to public policy.  But they are responsible for reliably delivering power and are key players to achieve energy efficiency and environmental goals, including those associated with climate change concerns.
New England utilities are national leaders promoting energy efficiency and adopting renewable resources. Eversource promotes solar energy on a large scale. It invests in major wind development with a goal of producing 2,000 megawatts of offshore wind energy in the next decade. To bolster basic reliability, it invests $1 billion annually to improve and maintain its infrastructure.
When New England’s governors made natural gas pipeline expansion a priority in 2013, natural gas companies and utilities were asked to step forward and they responded with investment proposals subject to regulatory approval and oversight. Those proposals were blocked or stalled by conflicting public policies and aggressive litigation.  That must end.
It is time for the region to adopt consistent policies and a regulatory framework that recognize the need for both intermittent renewables and natural gas generation — while including a workable role for utilities to invest in natural gas infrastructure as a hedge against price spikes and the potential for rolling blackouts during peak periods.
Carl Gustin began his career with Northeast Utilities in Hartford.  He later was an executive at the U.S. Department of Energy in Washington, D.C. and a senior vice president at NSTAR, an Eversource predecessor, before retiring in 2000.  Since then he has remained active consulting and writing on energy issues.

North Stonington votes to continue school building project, will break ground Friday

North Stonington — After petitions put the fate of the $38.5 million school building project in doubt just before a planned groundbreaking, the town will move forward with the project after residents overwhelmingly reapproved it at Thursday's  referendum.
The project, which will cost taxpayers $21 million after state reimbursement, was approved by a vote of 1,352-611. Following the vote, First Selectman Mike Urgo announced the project’s groundbreaking would occur at 9 a.m. Friday outside the gymatorium.
The 1,963 ballots cast made for one of the town's largest referendum turnouts in recent memory and was even higher than the referendum two years ago when 1,813 taxpayers voted. But whereas that original vote approved the project by just three votes, the results of Thursday's referendum were much more resounding.
"It feels fantastic because there was such a large margin and I couldn't hope for anything better," Urgo said after the results were announced in Town Hall. "Last time, it was close and I didn't have the elation because you hate to see the town divided."
"This is a mandate and you have to feel good about it," he added.
The results of the vote were met with raucous cheers and hugs from town and school officials, students and parents who had crammed into Town Hall by the dozens waiting to hear the outcome.
Supporters hope this latest vote settles the fate of the divisive school project, and allows the town to move forward.
After the original approval, the project remained a contentious issue. Then last month, several residents renewed their efforts to stop the project by filing petitions calling for a revote. Because North Stonington is an unchartered town, the Board of Selectman was required to comply with the request of petitioners.
As of last week, the town had already spent $1.6 million on the project and committed to nearly 30 contracts valued at $33.8 million. If voters had rejected the project Thursday, the town would have not only lost the $1.6 million but would have likely faced financial penalties and lawsuits from firms that had signed contracts.
But now, construction on the first phase of the project will begin with the project slated for completion in 2020. CLICK TITLE TO CONTINUE

KeyBank stakes $12.6M for 101 Pearl redo

The New York development partnership converting two derelict downtown Hartford office buildings into apartments has gotten $12.6 million in bank financing for work on one of them, an Ohio lender says.
Cleveland-based KeyBank Real Estate Capital announced Thursday that it has provided construction-to-permanent financing for conversion of 12-story 101 Pearl St. into 157 market-rate apartments and 6,113 square feet of ground-floor retail space.
Girona Ventures Inc. and Wonder Works Construction and Development also are converting the abutting 7-story 111 Pearl building into 101 apartments. Interior remediation to clear away asbestos or other hazardous, unwanted materials is underway.
As previously reported, the partnership is relying on private and public funding for both redevelopments. At 101 Pearl, the $28.4 million tab was to be financed with combination of $15.6 million in private financing and equity, plus a $9.2 million loan from the Capital Region Development Authority; and another $3.6 million in brownfield remediation funding.
111 Pearl's redevelopment price tag of $21.5 million was to be funded with $10.1 million in bank financing and equity; a $6 million CRDA loan; $2.8 million in historic tax credits; and $2.5 million in brownfield-remediation grants.
Jeff Ravetz and partners and CRDA previously teamed in redevelopment of the former Sonesta/Clarion Hotel, at 5 Constitution Plaza downtown, into the 190-unit Spectra Boutique Apartments.

Key Lawmakers Sharply Criticize Bill Pushing Open Competition In Casino Expansion

A bill that would establish competitive bidding for a third casino in Connecticut drew sharp criticism Thursday from two senators who were prominent supporters of a plan already in place for a casino in East Windsor.
State lawmakers last year backed the first expansion of casino gaming off a tribal reservation, giving the operators of Foxwoods Resort Casino and Mohegan Sun the go-ahead to jointly establish a satellite casino in East Windsor.
“If this proposal proceeds — which I doubt it will — I will vehemently oppose it,” Sen. Cathy Osten, D-Sprague, said. “Connecticut is already on track to open a new tribal casino in East Windsor that will protect existing casino jobs in the state and grow new jobs, which will help our economy, and that progress shouldn’t be derailed.”
The impetus for the East Windsor “satellite” gambling venue was to compete with MGM Resorts International’s new $960 million casino and entertainment venue set to open in September. The casino, its supporters said, would preserve the state’s monthly cut of slot revenue and jobs tied to the state’s gambling industry.
MGM was a forceful critic of the approach, arguing that competitive bidding would bring Connecticut the best economic deal. MGM’s critics said the gambling giant was just trying to protect its interests in Springfield and had no real interest in bringing a casino to Connecticut. MGM then unveiled plans last fall for a casino on the Bridgeport waterfront.
“This proposal is just another attempt by MGM to wave snake oil in front of legislators, and it comes after a year of thoughtful deliberation in which legislators and advocates painstakingly describe the need to preserve existing casino jobs in eastern Connecticut,” said Sen. Tim Larson, D-East Hartford and co-chairman of the legislature’s public safety and security committee, which oversees gaming.
Construction has not yet begun in East Windsor. The Mashantucket Pequots and Mohegans, the state’s casino operators, say they will begin demolishing a vacant movie theater on the site in the first three months of this year but have not committed to a timetable for actual construction.
The tribes hit a roadblock because it has not received definitive approval from the U.S. Department of the Interior and the matter is now in the courts.
Rep. Chris Rosario, D-Bridgeport, a member of the Bridgeport-New Haven delegation behind the competitive bidding bill, said Thursday the lack of progress in East Windsor opened the door to the bill.
Rosario maintained that he is not “anti-tribe.” He says he is just trying to do the best for constituents in Bridgeport, where there is now a proposal on the table.
The bill calls for a two-year process, first seeking bids and then making a selection. CLICK TITLE TO CONTINUE

Infographic: Construction Employment Increases In 269 Metro Areas, Officials Call for New Infrastructure Funding

Construction employment increased in 269 out of 358 metro areas between December 2016 and December 2017, declined in 43 and stagnated in 46, according to a new analysis of federal employment data released Feb. 6 by the Associated General Contractors of America.
Association officials said new infrastructure funding would help ensure firms continue to expand their headcount in 2018.
How did your metro area do? Take a look at the infographic below to find out: