The more state policymakers promote measures that increase Connecticut energy costs and create uncertainty in the state’s power industry, the harder it will be for the economy to recover. Yet another proposal in the Energy and Technology Committee would do just that.

SB 1176 penalizes certain electric generating facilities in Connecticut by imposing a per-kilowatt-hour tax on their output. This electric-generators' tax puts upward pressure on electric rates, stunts economic growth and jobs, and further weakens the diversity of fuel sources in the state and region.

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.

The tax could backfire on the state in other ways, too. Businesses analyze many factors, including government policies, when determining where to invest. 

It’s not a stretch to imagine that companies would consider Connecticut a risky place for any kind of business investment when 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. 

While the reduced air emissions are good for the environment, the future impact on Connecticut's economy is less certain. The region relies heavily on natural gas for electric generation. With any spike in global markets, our costs for electric generation could rise dramatically.

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 need to 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

Filed Under: Energy

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