Energy Committee Facing Weighty Decisions

Just two and a half years ago, Governor Malloy unveiled his Comprehensive Energy Strategy, calling for “cheaper, cleaner and more reliable energy” in Connecticut.  Since then, the state has taken or encouraged many successful measures to deploy increasing amounts of in-state clean energy.

And actions to make the state’s electric delivery system more resilient and reliable, while costly, apparently also were very successful—Connecticut had practically no significant power outages during this tough winter. 

Further, efforts to promote conservation and efficiency have made Connecticut the:

• Fifth-lowest state for energy consumption per capita in the country, according to the Energy Information Administration
• Sixth- most energy efficient state (2014), according American Council for an Energy-Efficient Economy   

We also continue to have the most aggressive Renewable Portfolio Standards in New England and remain a member of the nine-state Regional Greenhouse Gas Initiative (RGGI).

While there is more work to be done, Connecticut can “check the box” for progress on the “cleaner” and “more reliable” components of the governor’s strategy, and we’re doing more than our share to promote an environmental agenda. 

Unfortunately, the governor’s goal for cheaper energy remains far more elusive. 

While natural gas and oil prices are down, these are the result of economic forces outside of Connecticut’s control, and have done nothing to address the problem of our poor competitiveness ranking on energy costs.  

The biggest and most nagging energy challenge Connecticut has been unable to solve is clear: job creators and residents can relocate anywhere else in the continental U.S. and expect to pay less for their energy.  

Even residential energy costs in Alaska are now less than Connecticut, according to the latest data from the Energy Information Institute.

So what can Connecticut do to finally reduce its energy costs compared with other states? That’s the question facing the legislature’s Energy & Technology Committee as it wrapped up its informational forums and public hearings this week. 

CBIA testified on many bills before the committee this session and, as an overall message, said Connecticut should:

• Recognize and take credit for success in promoting clean energy, energy efficiency and conservation through a variety of incentive taxpayer-subsidized programs. But also recognize that this subsidy model, currently costing ratepayers about $200 million per year, is unsustainable and that more market-based, finance-oriented models such as the very successful programs administered by Connecticut’s Green Bank, are the future – limiting direct ratepayer subsidies to low-income homes and multi-family dwellings.
• Do everything it can to get increase accessibility, especially for Connecticut and New England natural gas electric generation units, to the cleaner, more affordable, domestic energy source that many believe will drive the worldwide energy marketplace in the 21^st century – natural gas derived from massive shale deposits across the U.S., including the nearby Marcellus and Utica shales in Pennsylvania and New York.   Several people testifying before the committee estimated that the current accessibility constraints are costing Connecticut nearly $1 billion per year in additional energy costs.
• Allow greater flexibility for complying with Connecticut’s Renewable Portfolio Standards (RPS). A recent report prepared by the Beacon Hill Institute at Suffolk University in Boston estimates that Connecticut’s RPS will cost state consumers $1.6 billion in increased electricity costs over the next five years, 2,660 lost jobs, and $283 million in lost income if no changes are made to the RPS. Expanding RPS compliance options to include zero-emission (not to mention Connecticut-based) nuclear power, and large-scale hydropower just to our north in eastern Canada, would be an economic and environmental boon for Connecticut. 

These measures, together with our continued commitment to promoting a competitive marketplace for a diverse portfolio of consumer fuel choices, could turn Connecticut from a severely disadvantaged energy-cost state into one of the most  climate-friendly,  reliable and energy cost-competitive economies in the world.

For more information, contact CBIA’s Eric Brown at 860.244.1926 | eric.brown@cbia.com | @CBIAericb