Transmitting Concerns about Energy Costs

So near—and yet so far away.

Members of the legislature’s Energy Committee this week learned how significant help for reducing Connecticut’s high energy costs is close by, but still apparently years out of reach.

To our west are abundant, clean, natural gas resources in the Marcellus Shale in New York, Pennsylvania and West Virginia. Up north in Quebec is plentiful, zero-emission, lower-cost hydroelectric power.

But experts from the Office of Legislative Research, the state’s Public Utility Regulatory Authority, and ISO New England, told lawmakers we’re still years away from having enough transmission capacity to get it here.

So committee members turned their focus to aspects they clearly could impact—including state-based costs that add to electric bills.

State-based costs

These include a broad range of costs for funding administrative agencies, providing state subsidies for energy efficiency audits, and assessing surcharges on energy generators designed to address climate change; along with quotas on energy distribution companies for supplying certain minimum quantities of renewable power and penalties when they’re unable to meet those quotas.

What’s more, these are charges that consumers in other states are not necessarily paying to the same degree, which puts Connecticut at a further cost and competitive disadvantage not just to other parts of the country but to other parts of New England as well.

Lawmakers asked that a chart be compiled to show all of those extra charges, and other state-specific charges impacting power bills, in order to increase transparency on energy costs.

This will be a key document for helping legislators focus on reducing costs that are fully within the state’s control.

Cost components

Legislators were told that electricity bills in the state are made up of four overall component costs: for generating power, bringing it into the state, distributing it to consumers, and for promoting public policy initiatives—the state-based costs.

From the discussion, it appears that there’s not much lawmakers can do to impact some of the major regional costs, including:

  • how costs associated with electricity transmission infrastructure and operations are set by ISO New England
  • how quickly gas pipelines can be expanded into Connecticut and New England
  • how quickly transmission infrastructure can be expanded to bring out-of-state renewable power--including large quantities of affordable and renewable hydropower from eastern Canada--to southern New England

Transmission is key, because as Connecticut and New England increase dependency on natural gas to produce electricity—and even increase the use of renewable fuels to meet higher government standards—there’s not always enough transmission capacity to keep up with the demand.

Because we’re still years away from having enough transmission capacity to get power from the Marcellus Shale and hydropower in Quebec, we face, for the immediate future, higher energy costs than most of the country, energy reliability challenges, and an economic disadvantage.

Several older power plants in New England, including Connecticut, also are being retired and others are expected to be in the next several years—which would create further price pressures.

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

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