Lawmakers continue focus on energy

(May 16, 2006) Although the General Assembly came to a close on May 5, state lawmakers will continue searching for the best direction for Connecticut’s energy policy.

Legislative leaders have called for an “energy summit” on Wednesday, May 17 at the Legislative Office Building in Hartford to address one of the most serious challenges to the state’s economy.

State and regional policy-makers will gather as prices for gasoline, natural gas and oil continue to rise, and after no major energy policy emerged in the final hours of the 2006 legislative session.

CBIA is encouraging lawmakers to develop a plan that would spur immediate investment in more electricity generation and better long-term energy planning for Connecticut.

During this year’s regular session, the legislature took some positive energy steps — restoring $12 million to the state’s energy conservation fund and providing gross receipts tax reductions for municipal electric customers in the state budget.

Without the construction of new power plants, pipelines, transmission lines, and refineries, however, the state will continue to struggle to supply stable and reliably priced power, which is critical to Connecticut’s economy.

Concepts talked about in the final days of the session included the state contracting for additional electric power plants, and better long-term planning.

Some lawmakers wanted to cap the profits of energy companies, but such a maneuver could have increased the overall cost of electricity for state consumers — and would have made Connecticut the first state in the country to try it.

During the session, bills that would have increased the cost of natural gas and oil (SB-293 and HB-5261), increased electricity prices (SB-353, SB-540 and SB-570) and disrupted the region’s energy marketplaces (HB-5521 and SB-353) were defeated.

CBIA also worked closely with the state’s DPUC and Energy Committee chairs to support and help implement the Energy Independence Act programs announced at the end of March. The programs provide a variety of cash incentives for businesses to invest in additional conservation and distributed generation resources.

Heading into the summer, New England has major energy challenges. First, the region’s power managers anticipate record breaking demand for electricity this summer. And while the region’s demand for electricity continues to grow, construction of new generating resources hasn’t, said ISO-New England.

Meanwhile, Connecticut consumers will soon face another price hike. The Federal Energy Regulatory Commission will likely adopt a new pricing system in June that will result in higher electricity prices for state consumers within the next year.

Connecticut’s business community hopes that the legislature’s focus on energy this month will result in the immediate development of generation resources and better energy planning. Businesses believe that more needs to be done to stabilize electricity rates.

In addition, CBIA would like to see the legislature clarify the restructuring law so that, at the very least, default service is procured semiannually, and all six months of prices are published in advance to allow for greater rate stability in 2007.

That change will allow for greater price certainty for customers, yet still provide price signals that will help stimulate a competitive electricity marketplace for Connecticut.

For more information, contact CBIA’s Rob Earley at 860-244-1900 or
earleyr@cbia.com