Electric ratepayers face more increases under DEP global warming regulations

(April 18, 2008) Citing the need to reduce carbon dioxide (CO2) emissions, the state Department of Environmental Protection (DEP) is rapidly moving forward with regulations to raise hundreds of millions of dollars from electricity ratepayers to address concerns about human-induced global warming.   

Under the proposed regulations, generators of electricity will be required to purchase “carbon allowances” for every ton of CO2 they emit by producing energy in the state.

While the actual initial cost of the regulations to ratepayers will not be know until at least September, when the first auction is held for these carbon allowances, DEP estimates a range from a minimum of $100 million to $250 million over the first five years of the program, and other estimates are far higher.
One environmental group said at a public hearing on the proposed regulations that it would like to see an allowance price sufficient to generate nearly $1 billion from electric ratepayers over the next five years.

With Connecticut ratepayers already burdened with some of the most expensive energy prices in the country, CBIA and others have expressed serious concerns about the regulations and urged the DEP to modify them to reduce the potential impact on ratepayers. 

On ratepayers’ tab
In its April 15 hearing report, the DEP rejected these concerns, stating that “substantially increasing spending on energy efficiency  . . . will mitigate potential energy price impacts.”  Unfortunately, the tab for this substantial increase in spending will be paid by residential, commercial and industrial electric ratepayers — thus making Connecticut an even more expensive state in which to live, work and to try to run a business.

 
The final opportunity to change or reject the regulations before they become law belongs to the legislature’s Regulations Review Committee, which is expected to consider the regulations at its May 27 meeting.

For more information on the proposed regulations, contact Eric Brown at 860-244-1926 or eric.brown@cbia.com.