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CT Construction Digest Monday February 3, 2020

Tabacco & Son Builders Inc. are getting a tax abatement for buying former Mastrobattisto Construction Company building
SUSAN CORICA
BRISTOL - The city will be giving Tabacco & Son Builders Inc. a tax abatement for buying 126 Burlington Ave.
The 2.45-acre property is located behind the Price Chopper shopping center, near the intersection of Lewis Street, and contains two commercial buildings. It formerly housed the Mastrobattisto Inc. construction company.
The City Council at its January meeting approved the five-year, 80% property tax abatement for Tabacco.
The current property tax for 126 Burlington Ave. is $16,780 per year, and the abatement would lower that to $3,356 per year, according to a memo to Mayor Ellen Zoppo-Sassu and the council from Justin Malley, executive director of the Economic and Community Development Department.
“Tabacco & Son Builders Inc. cannot grow its operation at its current location at 45 Stafford Ave. The location offers limited indoor and outdoor space to satisfy the company’s growing list of equipment and personnel,” Malley wrote.
“In addition, the proximity to residential homes further constrains business activity at the site,” he continued. “The new location would instantly increase the business’s outdoor and indoor storage space, allowing it to hire a minimum of four full-time employees in 2020.”
Malley wrote that the tax incentive, which is allowed by state statute, will save the company $67,120 over five years, based on the property’s current assessed value and the current mill rate. The property is assessed at $440,930.
While the city will not be getting that tax revenue, it “will benefit from the new full-time positions associated with Tabacco & Son Builders’ project as well as substantial improvements planned for the site,” he wrote, adding that Tabacco will receive the abatement only when the company receives a certificate of occupancy and commences operations at the new site.
“This was good news for the city that the former Mastrobattisto site, which is on Route 69, is going to be reclaimed and will allow Mr. Tabacco and his business associates to have more room, as well as potentially opening up space on Stafford Avenue at his current facility for existing businesses that need to move into that space,” said Zoppo-Sassu.
“They’re going to take what has started to be a deteriorating site, something that is very visible on Route 69, and I think they’re going to do a very nice job with renovating it,” she said.

Spinnaker acquires Hartford’s 55 Elm, nearby parking lots for $6.8M
Joe Cooper
Norwalk developer Spinnaker Real Estate Partners has acquired a historic office building across from downtown Hartford’s Bushnell Park and nearby parking lots for $6.8 million, city records show.
Spinnaker on Wednesday purchased the 30,000-square-foot office building at 55 Elm St. from a partnership involving West Hartford’s Simon Konover Co., records show. Simon Konover erected the building, used in recent decades for state workers, in the mid-1920s as headquarters for former Connecticut General Life Insurance Co., Cigna’s predecessor.
The company also bought a trio of nearby parking lots at 71 Elm St., 94 Hudson St. and 108-110 Capitol Ave., for about $967,000, records show.
Spinnaker co-partner Matthew Edvardsen said his firm is now designing plans to renovate the offices formerly housing the state attorney general, comptroller and treasurer for hotel, office and retail use.
It’s also looking to build a mixed-use development across the parking lots with offices, shops, restaurants and housing in a project aimed at linking downtown to the South End neighborhood.
Edvardsen said it’s also too early to tell if the housing component of the project will receive financing from the quasi-public Capital Region Development Authority (CRDA).
“There are a lot of things to put together before we present the vision to the community and the city,” Edvardsen said Friday. “We want to make sure it's a plan that everyone can get behind.”
As previously reported, Spinnaker inked a purchase-contract on the building last summer after Simon Konover put the historic limestone building on the sales block in spring 2018.
The building was entirely occupied by state employees until the majority of workers relocated in late December to the newly renovated State Office Building on Capitol Avenue. A small faction of state workers will remain at the Elm Street building until the state’s lease ends there in the coming months, Edvardsen said.
Spinnaker is also looking to redevelop land outside of downtown.
The city recently signed a development agreement with Spinnaker and Hartford’s Freeman Cos. to build a long-awaited 126-unit apartment and retail community at the corner of Park and Main streets.
The developers hope to break ground on the $26-million mixed-used development by the end of the first quarter or early second quarter. Apartments in phase one of the construction could be completed in just nine months, Edvardsen said.

Connecticut joins others in blasting regional power grid operator
Luther Turmelle
Connecticut Attorney General William Tong is blaming New England’s regional power grid for continued high electric rates in the state, saying ISO-New England failed to follow a competitive bidding process as is required law.
Tong has joined officials in Massachusetts and Maine in asking the Federal Energy Regulatory Commission to force the Holyoke, Mass.-based grid operator to do competitive bidding in the development of transmission lines.
“Connecticut is plagued with some of the highest energy costs in the nation, and families and businesses simply cannot afford these bloated contracts,” Tong said in a statement released Thursday. “Restoring competition to this broken system could save ratepayers millions of dollars while also opening doors to improved energy efficiency and use of renewable technologies. ISO-NE has evaded the competitive bidding process, and this practice needs to end.”
Matt Kakley, a spokesman for ISO-NE, on Friday defended the grid operator’s actions.
Tong was joined by Massachusetts Attorney General Maura Healey and Maine Public Advocate Barry Hobbins  in signing onto the letter to FERC. Also signing onto the letter were Katie Dykes, commissioner of the Connecticut Department of Energy and Environmental Protection, as well as Richard Sobelewski, the state’s acting consumer counsel.
Healey said in a statement that the way ISO-NE operates when it comes to transmission line work “has cost ratepayers across the region millions of dollars.”
“Allowing for competition will help support our transition to a cleaner, reliable energy system” she said.
Dykes said “ratepayers have been waiting for years to get the benefit of a competitive process.”
“Competitive processes could also enable the incorporation  of new technologies to provide a more efficient and resilient grid,” she said. “It’s time for ISO-NE to move that forward.”
But Kakley said that “contrary to these parties’ assertions, ISO New England has properly applied its federally-approved tariff.”
FERC officials weren’t immediately available for comment.

Dykes said during an energy forum at Trinity College in Hartford in mid-January that Connecticut is being hurt by “a lack of leadership at the grid operator.”
“We are at the mercy of a regional capacity market that is driving investment in more natural gas and fossil fuel power plants that we don’t want and we don’t need,” Dykes said. “This is forcing us to take a serious look at the cost and benefits of participating in the ISO New England markets.”
Building new electric transmission grids accounts for approximately 20 percent of the cost of running the regional electric grid, according to Connecticut officials. Investment of approximately $1.3 billion is planned for the near future, with 67 various projects planned, proposed or under construction currently, they said.
Sources told Hearst Connecticut Media Thursday that a detailed white paper assessing the pros and cons of the state’s relationship with ISO-NE — and what would be involved in exiting the regional power market — likely will be released soon.
Regional transmission grid operators were created to assure that massive regional blackouts, like the one that hit the Northeast in 1965 never occurred again.
In addition to protecting the reliability of New England’s power grid, ISO-NE also oversees what is known as the forward capacity market. That market is designed to assure the region has adequate power supplies years in advance of when they are needed.
Paul Chernick, president of Research Insight, an Arlington, Mass.-based consulting firm that specializes in the regulation of electric and gas utilities, said friction between ISO-NE and its members isn’t that unusual.
State officials in the region believe the grid operator isn’t tough enough in dealing with the electric generating companies that bid into the market and that the region’s transmission grid shouldn’t cost as much as it does. But Chernick said ISO-NE is doing a good job in making sure the region’s power grid is reliable.
“I don’t have any inside knowledge of this, but this could be a negotiating tactic by the states to get more of what they want,” he said.
It’s highly unlikely, according to Chernick, that Connecticut would sever its relationship entirely with ISO-NE — or even be allowed to by the federal government. But it is possible Connecticut officials could determine it is in the state’s best interest to exit the forward capacity market, he said.
 
The Regional Greenhouse Gas Initiative is often described as a cap-and-trade program.
It’s not.
This first-in-the-nation regional effort to lower carbon emissions from power plants is actually a cap-and-invest program. Power plants buy emission allowances through quarterly auctions for the right to pollute above a set cap. The states get the money, most of which they’re supposed to invest in consumer benefits such as energy efficiency programs that help lower energy use further.
From 2009, when RGGI – pronounced Reggie – officially kicked in, through 2017, that system sent $2.4 billion back to the then nine member states, according to the most recent report from RGGI.
Power plant emission reductions exceed those in rest of U.S. by 90%
According to a 10-year report by the northeast regional advocacy group Acadia Center, proceeds since the time of the first two auctions (a year before RGGI officially got under way) had totaled nearly $3.3 billion by the end of June 2019.
The Acadia report also says emissions from the plants covered by RGGI are down 47% – outpacing the rest of the nation by 90%. The gross domestic product of the RGGI states, all in the Northeast and mid-Atlantic regions, also grew by 47% – again outpacing the rest of the country, which grew by 31%.
“I’m not shocked by the direction of the impact here,” says Jordan Stutt, carbon programs director at Acadia. “But I am surprised by just how strong the direction is. The fact that we’re outpacing the rest of the country in electric sector emission reductions by 90% is staggering. … It’s an important demonstration that taking on climate change doesn’t mean economic sacrifice.”
That observation is not lost on other states. New Jersey, among RGGI’s original 10 states, has now re-entered the program after dropping out in 2012 under then-Gov. Chris Christie. And at least two more states – Virginia and Pennsylvania – are looking to join.
RGGI is also providing a template across the globe for similar programs and for its own member states who with others are working towards a program designed to lower carbon emissions from transportation – the Transportation and Climate Initiative or TCI.
But perhaps most important, for those who maintain that putting a price on carbon is the best way to lower emissions and who lament that no such system exists at the federal level and is not soon likely to – RGGI serves as a potential model.
It is at its core a price on carbon. And participants and observers say it works.
“Yes – it was the first example and continues to be one of the best examples,” says Ben Grumbles, secretary of the Maryland Department of the Environment, who just completed his term as chair of RGGI. “With strong headwinds at the federal level, the success story at the state level and on a regional basis is drawing more and more attention.”
Kenneth Gillingham, who specializes in environmental and energy economics across three departments at Yale University and who served in the Obama White House, noted that Acadia was careful not to claim that all the good news was the result of RGGI.
Debunking the ‘kill the economy’ meme
“I think it debunks the myth that a carbon charge or cap and trade or a program that reduces carbon emissions from the electric system is going to kill the economy,” he says. “All sorts of awful outcomes simply did not occur.”
RGGI did benefit from a boom in fracked natural gas that sent prices dramatically lower and increased its use in power plants. While natural gas still has carbon emissions, they are far lower than for oil or coal. A study released in 2015 at Duke University, however, found that the largest share of emissions reductions in RGGI states came from the program itself, not from the availability of low-cost natural gas.
Regardless, RGGI offers lessons for other states and regions considering carbon charges to lower emissions and especially for TCI.
Key lessons
Think regionally: It’s a truism that California has embarked on its own economy-wide carbon market – some of which has its basis in RGGI. And while California is big, the RGGI states together are a larger economy than California’s.
Katie Dykes, now the commissioner of the Connecticut Department of Energy and Environmental Protection, who served as RGGI chair for three years, calls the regional approach “a very critical piece” of the RGGI lesson.
“There’s much more flexibility for finding the most efficient, cost-effective, carbon-reducing program when it’s market-based and implemented consistently across a regional basis,” she says.
Dykes notes that RGGI has been successful in its durability both from a policy and political standpoint. It has been notably bipartisan – first envisioned by the then-Governor George Pataki of New York – and continues to work even as administrations and parties have changed. It hasn’t hurt grid reliability or competitive wholesale energy markets.
“RGGI’s functioned very well,” says Karen Palmer, director of the Future of Power Initiative at Resources for the Future, an influential Washington, D.C., think tank. “A regional approach has a lot of advantages to it. There may be issues in different parts of the region that can be offset by things going on in other parts of the region.”
Get the price right: RGGI member states took big risks setting up an auction system versus just having polluters pay a fee, and then seeing to it the money mostly would be plowed into programs that lower the use of fossil fuels. A few state legislatures and governors have swiped funds to plug budget holes, but for the most part the states followed the rules.
Dykes of Connecticut, a state that did grab some of the RGGI funds for budget purposes, calls the re-investment the “fundamental element” – the key to the system’s success.
“There was a debate when RGGI started – give away allowances to regulated entities or credit to ratepayers,” she says. “In fact the investment in energy efficiency particularly, as well as solar, enabled the program to achieve further reductions in energy bills for customers.”
Grumbles says it’s critical to get the prices right. RGGI did that by setting a floor for auction prices so the allowance prices couldn’t go too low and they set a cost containment reserve to constrain excessively high allowance costs.“We’re all trying to find the magic sweet spot,” he says.
Review, review and review again: RGGI was set up to have regular program reviews, which turned out to have been needed even more than anticipated. The reviews have enabled RGGI to lower the emissions cap substantially when the states hit the initial caps much earlier than anticipated.
Even now, the Acadia report shows that in 2018 the states were already below the 2023 emissions cap. Acadia’s Stutt calculates if 2019 fourth quarter emissions, which are not yet available, are the same as the previous three years, the 2019 emissions would be the lowest emissions to-date and already below the 2026 cap. “In 2019 we’ve already seen the lowest first half emissions since the program started,” Stutt says.
In the latest program review, the members went even further than lowering the cap and created a mechanism that hasn’t been done anywhere else – an emissions containment reserve.
It withholds allowances from auctions if the auction clearing price is too low. It keeps the program from flooding the market with unnecessary allowances and preserves a more significant price per ton of CO2.
Adapting RGGI for TCI: While Grumbles believes RGGI can supply a “powerful example” to TCI, he and others recognize the biggest difference is that transportation has a more direct and obvious impact on citizens. They represent a vast range of income levels with different tolerances for the economic impact of TCI.
“Any time we have a cap-and-trade system I believe it’s important to consider where the pollution will be eventually and if there are going to be impacts on lower-income households, that those impacts be ameliorated,” Yale’s Gillingham says. “The framework,” he says though, “is a very sensible framework.”
Martin Suuberg, commissioner of the Massachusetts Department of Environmental Protection, who is just beginning his term as RGGI chair, rattles off a list of lessons RGGI can offer TCI starting with a regional approach. “It’s harder for states to go it alone,” he says.He supports a market-based mechanism like cap and invest for TCI. He says TCI can benefit from the kind of high-level technical modeling RGGI received. And finally he says: “Make sure investments are closely tied to the goals you’re trying to achieve.”

NEW ENGLAND STATES SEEK TO RESTORE COMPETITION TO BROKEN ENERGY TRANSMISSION SYSTEM, SAVE RATEPAYER DOLLARS
ISO-NE has Labeled All 30 Ongoing Transmission Projects an "Emergency" to Skirt Competitive Process
Restoring Competition Could Save Ratepayers Millions of Dollars, Open Doors for Renewable Energy and Efficiency
(Hartford, CT) – Connecticut, Massachusetts and Maine are urging federal energy regulators to require ISO-NE to allow competition in transmission work, as required by law—a move that could dramatically drive down costs and save ratepayers millions of dollars.
"Connecticut is plagued with some of the highest energy costs in the nation, and families and businesses simply cannot afford these bloated contracts. Restoring competition to this broken system could save ratepayers millions of dollars while also opening doors to improved energy efficiency and use of renewable technologies. ISO-NE has evaded the competitive bidding process, and this practice needs to end." said Attorney General William Tong.
“For too long, ISO-New England has avoided competitive bidding for building new transmission lines, driving up costs for our families and businesses.  Allowing for competition, will help support our transition to a cleaner, reliable energy system and could save ratepayers millions of dollars on their bills," said Massachusetts Attorney General Maura Healey.
"Competitive processes could save Connecticut's ratepayers millions of dollars, and could also enable the incorporation of new technologies to provide a more efficient and resilient grid,” said Katie S. Dykes, Commissioner of the Connecticut Department of Energy and Environmental Protection. “Ratepayers have been waiting for years to get the benefit of a competitive process.  It’s time for ISO-NE to move that forward."
"As the working families of this state know all too well, the electricity rates paid by Connecticut consumers are among the highest in the nation," said Acting Consumer Counsel Richard E. Sobolewski. "Allowing a competitive process for transmission projects in ISO-NE has the potential to save ratepayers a substantial amount of money on their electricity costs." 
“Maine is particularly concerned regarding the impact of the proposed exclusion of Non Wires Alternatives from the ISO-NE process.   NWAs, such as targeted efficiency, storage or distributed generation projects, have the potential to address reliability needs more cost effectively than traditional transmission infrastructure,” said Maine Public Advocate Barry Hobbins.
In a letter to the Federal Energy Regulatory Commission, Connecticut Attorney General William Tong, the Connecticut Department of Energy and Environmental Protection, the Connecticut Office of Consumer Counsel, Massachusetts Office of the Attorney General and the Maine Office of the Public Advocate identify long-standing practices by regional grid operator ISO-NE that avoid competitive bidding and drive up costs for consumers.
In 2011, the Federal Energy Regulatory Commission issued an order to bolster competition for transmission projects. Despite that order, there has not been a single competitive transmission project built in New England. ISO-NE, the region's electric grid operator, has systematically skirted the federal order by identifying all 30 projects built since 2011 as an "emergency," thus allowing work to be automatically awarded to incumbent transmission owners. Additionally, by blocking competitive bids, ISO-NE has closed its doors to proposals from alternative technologies, including more efficient or renewable options.
Transmission accounts for approximately 20 percent of the cost of running our electric grid. Significant investment of approximately $1.3 billion is planned for the near future. There are 67 various projects planned, proposed or under construction currently.
Competition could lower costs by 20-30 percent, and save ratepayers millions of dollars. Analysts have shown that competition in transmission projects elsewhere has resulted in winning bids 40 percent below initial cost estimates, while non-competitive bids were completed at 34 percent above initial estimates. Non-competitive transmission projects at ISO-NE have a poor track record of cost overruns of up to 70 percent.
Assistant Attorney General Robert Snook and Assistant Attorney General Matt Levine, Head of the Environment Department, assisted the Attorney General in this matter.

 

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