State Shouldn’t Waste Energy Creating New Bureaucracy

Most people think it’s time for state government to become leaner and less expensive, and many state lawmakers and others are involved on commissions, committees and studies to make that happen.

But the Energy Committee—which is attempting to create a whole new government bureaucracy—seems to have something else in mind.

Among other things, HB-5505 creates a state government energy “authority” that would control the state’s electricity needs by procuring power and owning and operating electric generation power plants.

Connecticut already has resources in place to take care of all of the above. Connecticut’s electric distribution companies have the experience, expertise and capability to procure power for consumers in the state that do not choose a competitive supplier.

Additionally, private-sector companies own electric generation power plants and absorb the risks associated with it. These private-sector companies act under the watchful eyes of the state Department of Public Utility Control and Connecticut Siting Council.

On the other hand, the state would have to learn and master the business very quickly. A state energy authority would have to be built (read: paid for) from the ground up. And that means millions of dollars for personnel, facilities, marketing and administration, and billions of dollars in collateral to purchase power and construct generation.

How that kind of massive investment could be done amid today’s and tomorrow’s state budget deficits is unclear. But footing the bill for the new bureaucracy would be—you guessed it, taxpayers.

What’s more, setting up the state to be a competitor in the energy marketplace is a curious use of dwindling state revenues and a poor message to send to the business community.

Compounding the problem is the bill’s “windfall profits” tax on electric generating companies doing business in Connecticut.

This idea would make Connecticut the first state in the nation to tax private energy companies’ profits—putting the spotlight on a decidedly business-unfriendly policy. Why would energy companies want to do business here under such conditions?

HB-5505 would be a clear signal to businesses to disengage from Connecticut. There is no one thing that the General Assembly can do to significantly reduce our high energy costs.

However, it is within their power to avoid increasing energy costs—by not creating a new state bureaucracy or nudging energy competition out of the state.

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