Climate Superfund Bill Raises Energy Cost Concerns

Legislation creating a new climate superfund program in Connecticut is raising concerns over its potential impact on energy costs.

HB 5156 requires certain fossil fuel producers to contribute to a state-run climate adaptation fund administered by the Department of Energy and Environmental Protection.

Under the bill, fossil fuel companies that meet specified historical emissions thresholds must make payments into the fund over a multiyear period.

The revenue would be used to support climate adaptation projects across the state.

Business groups have raised concerns about the potential economic implications of the measure, particularly on Connecticut’s energy prices, which are among the highest in the country.

Energy Demand

Connecticut’s electric grid relies heavily on natural gas- and oil-fired power generation, especially during periods of peak demand and winter reliability events.

During a recent winter storm, 67% of the power generated in New England came from fossil fuels, underscoring the region’s continued dependence on those energy sources.

“A fee imposed on oil and natural gas will only increase energy prices.”

CBIA’s Pete Myers

CBIA senior policy director Pete Myers cautioned that imposing additional costs on fossil fuels could have downstream effects on consumers and businesses.

“Fuel prices are a primary driver of wholesale electricity costs in the regional power market,” Myers said.

“A fee imposed on oil and natural gas will only increase our energy prices in Connecticut.”

High Costs

Energy costs remain a longstanding concern for Connecticut employers, who often cite high rates as a challenge to competitiveness.

Connecticut’s residential electric rates were the third highest in the country last year, with consumers paying 77% more than the U.S. average for electricity.

Residential natural gas rates were 28% higher than the national average, based on U.S. Energy Information Administration data.

As of November 2025, Connecticut’s commercial and industrial electricity rates ranked sixth highest in the country, with commercial rates 61% higher than the U.S. average and industrial rates 110% higher.

Commercial natural gas rates were 0.75% higher than the national average in November, while industrial rates were 98% higher.

Additional charges on fossil fuel producers could ultimately be passed through the supply chain, contributing to higher utility bills.

Other States

Connecticut’s proposal follows similar legislation enacted in other states.

In 2024, New York signed its Climate Change Superfund Act into law. That program is designed to collect $75 billion over 25 years from qualifying fossil fuel companies.

The scope and structure of New York’s program drew national attention and sparked debate within the business and legal communities.

Similar laws adopted in New York and Vermont are currently facing legal challenges.

Similar climate superfund laws adopted in New York and Vermont are currently facing legal challenges, including lawsuits filed by the U.S. Chamber of Commerce and other business organizations.

HB 5156 will next be taken up by the legislature’s Environment Committee, where it is scheduled for a Feb. 20 public hearing.

Business organizations are encouraging companies with an interest in the issue to participate in the hearing process and submit testimony.

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For more information, contact CBIA’s Pete Myers (860.244.1921).