Connecticut’s economy needs a strategic, long-term energy policy that follows a clear set of priorities. For the business community, those priorities are simple: Reduce energy costs and ensure a reliable energy system.

Fortunately, a major proposal in the legislature’s Energy and Technology Committee agrees: SB 1 identifies those as the state’s top two priorities, followed by increasing the state’s use of clean energy, creating jobs and developing the state’s energy-related economy.

Reducing costs is paramount, because Connecticut has some of the highest energy costs in the nation, and that has put a damper on businesses and the state’s struggling economy. Reliability is also critical because businesses need a stable supply of energy to be as productive and competitive as possible.

With some improvements, SB 1 could be the vehicle to finally establish these goals as the state’s long-term energy policy objectives, which would guide state policymakers in any energy policies they adopt. 

Higher costs

As drafted, however, SB-1 loses focus in places. While identifying lower costs as its top priority, for example, the proposal outlines numerous measures that would actually increase rates and costs.

Public policy has been a significant contributing factor to the energy cost dilemma in Connecticut. While our state’s wholesale electricity costs are in line with the rest of New England, retail rates here are approximately 25% higher. Public policy decisions – such as taxes and investments – are major reasons why our consumer costs are higher.

Many of the 20+ programs, studies and proceedings proposed in SB 1 are laudable and address valid concerns; however, each comes with a cost.  Together, they would immediately saddle Connecticut ratepayers with higher rates. In addition, the proposed Department of Energy & Environmental Protection – charged with outlining the state’s energy policies – would be set with an agenda even before it got started.

Renewables

Another cost concern is the proposal’s wide-open commitment to certain renewable energy sources. SB 1 calls for the state to develop and use renewable energy resources, such as solar and wind energy, to the “maximum practicable extent.”

However, renewable energy resources are much more expensive than traditional energy sources.  The Department of Public Utility Control estimates the annual costs to achieve the state’s ambitious renewable energy goals by 2020 (when 27% of Connecticut’s power will have to come from renewable energy sources) at between $150 million and $380 million. 

The Connecticut Energy Advisory Board is now conducting a thorough review and study of the state’s renewable portfolio standard, including which sources should qualify as renewable and whether or not Connecticut’s goals should be altered. 

Several of the proposals contained in the 190-page SB 1 are positive—such as promoting the diversity of the state’s fuel supply. However, many others would, in some way, expand energy regulations or the scope of state government in the energy realm and increase costs to ratepayers and taxpayers.

It’s a very positive step for lawmakers to acknowledge that costs and reliability are the top energy priorities for Connecticut. Now, they have to consistently back up those priorities as they set policy.

For more information, contact CBIA’s Kevin Hennessy at 860.244.1979 or kevin.hennessy@cbia.com.