Anti-Jobs Energy Tax Gets National Attention

Issues & Policies

Swinging and missing on an opportunity to make a strong pro-jobs stance for Connecticut, lawmakers on the legislature’s Energy & Technology Committee instead made national news this week by approving a new energy tax that will raise electric rates and discourage the power industry from doing business in the state.

Media outlets throughout the country—including the Washington Post, MSNBC and Yahoo Finance—picked up the Associated Press story about how the committee approved SB 1176 which targets and taxes electricity-generating companies in Connecticut.

SB 1176 drives up energy costs in Connecticut by imposing a per-kilowatt-hour tax on their output. This $342 million electric-generators’ tax will not only increase electric rates, but will thwart economic growth and jobs, as well as further weaken the diversity of fuel sources in the state and region.

It’s just the kind of publicity that gives the nation’s energy industry the impression that Connecticut’s legislature is, despite the pledge of many lawmakers to be pro-jobs this year, unfriendly to business investment and jobs. No other state in the nation has such a tax.

Two other harmful bills died in the committee, however. One would have imposed the nation’s first windfall profits tax on electricity generators (HB 5699) and the other (HB 6026) would have levied a tax on the output of nuclear and coal generating facilities. While these proposals died, what they were designed to accomplish is continuing in SB 1176.

Lawmakers’ dismay

At the committee’s public hearing on SB 1176 this week, Rep. Elizabeth Ritter (D-Waterford), said, “I don’t understand how the state can hold itself out as attempting to create jobs or businesses or even keep the ones that is has now,” she said. “I cannot support this bill.”

Think about what a yes vote — what kind of a message the yes vote on this bill sends to the business world,” added Rep. Sean Williams (R-Watertown). “The message that we’re sending here … is, ‘Don’t move your energy company here to Connecticut’.”

The committee’s vote was close, but not close enough to avoid sending that message.

Impact on business

Electricity consumers in the state will feel the impact of the tax. Like all businesses, electric generators incorporate all of their costs, including taxes, into the price for their product.

And companies will consider Connecticut a risky place for any kind of business investment if the state is penalizing certain companies in a single industry it considers low-cost and too profitable.

Hurts diversity

Sources of fuel for electric generation in New England have drastically changed over the past decade, with a significant drop-off in oil and coal generation and a similarly large increase in natural gas generation. 

The best protection against such a jump is fuel source diversity, but in penalizing certain sources of fuel, SB 1176 all but ensures Connecticut will not have any more investment in oil, nuclear or coal generation. This is not a good scenario for electric ratepayers concerned about potential increases in electricity costs.

Lawmakers must promote policies that reduce Connecticut’s energy costs and improve the reliability of the electricity system. SB 1176 will do nothing but increase the cost of electricity and slam the door on the notion that Connecticut is “open for business.” CBIA urges lawmakers to reject it.  

For more information, contact CBIA’s Kevin Hennessy at 860.244.1979 or


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