American Gas: Commissioner Caron, congratulations on your election as president of the National Association of Regulatory Utility Commissioners for 2023. You’ve had a long and interesting career, including serving as a state representative, consulting and working in government affairs. You’ve also worked in financial services, renewable energy, biotech and pharma. How will you apply this breadth of experience to your role as NARUC president, and in doing so, how will you continue the multiyear theme of “Connecting the Dots: Innovative/Disruptive Technology and Regulation”?
Michael Caron: I guess in my varied professional career I’ve always been connecting the dots. What goes with what? How can I create a mutually beneficial partnership? What do we have in common and where are our differences?
I have found that seldom are there places where differing people, businesses or groups can’t find good reasons to work together. That is more the case when times are as difficult as they are right now.
I hope I can help people bridge gaps and recognize we are stronger together even if we don’t always agree. I’d rather be agreeable.
American Gas: When we talk about innovation and disruption in natural gas, hydrogen and renewable natural gas immediately come to mind. You have experience in working in cleaner energy and in supporting energy innovations as a state representative. How do you see NARUC’s role in regulating and supporting these growing markets?
Caron: It would seem to me that once our political policymakers determine that this is a direction for their state to go, commissions/regulators can make sure that we find a way to streamline processes and work with the private sector where we can. The old analogy, “When you’re a hammer, everything looks like a nail to pound,” comes to mind. In regulation, though, we need to recognize that we have many hammers at our disposal, and not every issue needs a sledgehammer or a pile driver. Our stakeholders know—or should know—that we have those tools, but sometimes we just need a tack hammer, something light.
I also think it’s important to recognize that the private sector can move very fast and often needs to in dynamic markets. That is not in regulators’ natures. In this fast-changing energy world we find ourselves in, we regulators may need to be the ones to adapt to these new technologies and these disruptive energy and distribution environments. In other words, let’s try to be flexible when we can.
American Gas: Infrastructure expansion and replacement will always be a part of the conversation. Do you anticipate the megaprojects of the past being just that—a part of the past? What is the ongoing role of infrastructure expansion and replacement as the industry explores new fuels that will still require pipe to deliver them to homes and businesses?
Caron: I don’t really know if megaprojects are part of the past, but they certainly are not part of the present. I worry that some investments tend to have or to gain momentum; for example, intermittent generation development has investment momentum. See the inflation reduction act.
Partly due to the glut of a few years ago and various pressures being applied to both state and federal regulators and investment banks to shun fossil fuels, it seems to me that major pipeline projects are being crowded out in spite of the obvious need for more supply. Let’s not forget America’s refining capacity is reduced from just a couple of years ago as well, so even if we had more oil pumping, fewer places can refine it and get those products to gas stations.
So, your second question brings us to the issue: Do we need a new pipeline system to transport hydrogen if the investment is there to create that supply? Do enough consumers really want these new products? In other words, there are more questions than answers for now. Stranded costs may not just be for current infrastructure. Still, I don’t see how we get to any energy transition without our current infrastructure in place. That infrastructure is safe and secure with necessary upgrades.
American Gas: What other key natural gas-related issues are most top of mind for NARUC this year?
Caron: For us in New England, it is supply, supply and price. I suspect we’re not alone in this. [At press time,] we are hoping and praying for yet another mild winter in New England to avoid brownouts or, worse, blackouts due to an extended cold snap. That’s not a great long-term strategy. We are at the end of almost all supply chains, including energy, and can’t get all required permits to import Canadian hydro to our load centers. I hope we at NARUC can be a productive, honest broker working with other stakeholders to help find longer-term solutions.
American Gas: You have served on the public utilities regulatory agency for the state of Connecticut for the past 10 years, but as we previously mentioned, you were a state representative and worked in the private sector prior to that. What brought you back to public service—and specifically to energy and utilities?
Caron: Well, in my public service positions all I have to do is say yes or no. So, it seemed like a really easy job. But seriously, I enjoyed my time in politics.
I became interested in the field of energy when we restructured markets in Connecticut. I found it a very interesting subject. It was almost pure economics with the supply and demand, and satisfying unlimited wants and appetites by allocating limited resources. I found it fascinating and wanted to be a part of it. Then it took me four years to get on the energy and technology committee. Also, being a history major, I read up on the history and evolution of the power sector, and it’s a great story, and one that’s still being told.
After leaving the legislature, one of my former colleagues, Kevin DelGobbo, happened to be chairman of the Connecticut Public Utilities Regulatory Authority and was going to step down. He recommended me for appointment, and that’s how I came to our authority.
American Gas: Can you talk a bit more about the process of getting to that yes or no in your public service positions, especially as it comes to policy?
Caron: That process comes in many forms, including meeting with constituents, debating with people who may disagree with a particular position, and managing the politics of an issue. What was best for the district I represented? It’s important to understand that 10 different people can all agree on a given problem or issue, but depending on their particular perspectives, we could have 10 different and passionate ideas on how to solve that problem or address that issue.
So, how do you get to yes? Or no? You can start by showing respect. I never had all the answers, and neither did anyone else.
Then, acknowledge that one size may not fit all. Understand what others need to get to yes or no and help to address their concerns. Finally, keep one’s options open, because you never know when there may be a breakthrough and you may have to change your mind.
American Gas: Finally, in the early part of your career, you worked as a registered investment adviser. We’d love to know: From that standpoint, how would you rate natural gas as an investment?
Caron: As I’m sure you know, a registered investment adviser must know their client as related to the suitability of an investment. So, it depends on the risk profile of the investor and their stage in life, their long-term and short-term goals, and so on. If they’re risk averse or are approaching retirement, then it might be hard to recommend natural gas. It’s just too volatile.
However, let’s say one is a 244-year-old nation that has enormous natural gas reserves, with a disruptive technique for its extraction. This country has a sophisticated business environment with countries from all over the world begging it to send them gas at any price.
And let’s say that in this country, the increased use of natural gas has done more to reduce that country’s greenhouse gas emissions than any other fuel source. Let’s also say that natural gas is needed to back up all of the intermittent generating resources being developed and built.
In that case, then, I would be bullish.