Connecticut strong on energy efficiency, but high prices hobble business | Crain's Connecticut

Connecticut strong on energy efficiency, but high prices hobble business

Connecticut electricity carried on lines like these belonging to Eversource Energy Inc. continues to be at relatively high prices, acting as a continuing impediment to business recruitment, according to the Connecticut Business and Industry Association. | Photo by James Mosher for Crain's Connecticut

Connecticut continues to be one of the top states for energy efficiency, but high prices continue to thwart business growth, the state’s largest business group says.

Connecticut ranked No. 2 among states nationally in household utility bill savings due to existing appliance standards, according to a February report from the Appliance Standards Awareness Project and the American Council for an Energy-Efficient Economy. Connecticut consumers saved an average of $648 per household in 2015 with the savings expected to reach $987 in 2030, the report states. Only Hawaii, at $945 and $1,599, respectively, was higher.

Ironically, it’s Connecticut high energy prices that enable such large savings, one of the report’s authors says.

“The main driver for Connecticut having high per-household-bill savings from existing national product efficiency standards is because Connecticut has relatively high energy prices,” said Andrew deLaski, executive director of the Boston-based Appliance Standards Awareness Project. “Saving energy is especially lucrative in states like Connecticut with relatively high energy prices.”

Connecticut consumers pay about $200 million a year through their utility bills to fund energy efficiency programs. Despite the programs, Connecticut energy prices remain high relative to other states and continue to be a major impediment to recruiting and retaining businesses, business leaders say.

“Lots of states have energy-efficiency programs,” said Eric Brown, counsel for the Hartford-based Connecticut Business and Industry Association, which has 10,000 members statewide. “The cost of energy is very high in Connecticut. It’s a competitiveness issue. We still stand out as the least competitive.”

Connecticut residents are paying some of their lowest rates in years, according to a Nov. 3 press release from Berlin-based Eversource Energy Inc., Connecticut’s largest electricity transmission company, which serves 149 of the state’s 169 towns.

Due to a decision by the Public Utilities Regulatory Authority, prices from electricity suppliers are 18 percent below last winter with this winter’s rate being the lowest since 2013, Eversource said. On Jan. 1 the standard service supply price decreased to 7.87 cents per kilowatt hour from last winter’s 9.56 cents. The new rate will be in effect through June 30.

Low prices for natural gas that drives most of Connecticut’s power plants is a temporary respite and not doing much to change Connecticut’s image as a costly state for energy, Brown said. CBIA is working with the General Assembly and the Connecticut Department of Energy and Environmental Protection to address the cost issue, he said.

The Millstone Nuclear Power Station, Connecticut’s only nuclear power plant, is the largest supplier of electricity in Connecticut and New England through its Unit 2 and Unit 3 reactors. Its owner, Dominion Resources Inc., has said it does not plan to create any more reactors on its Waterford campus that would create more supply and likely lower prices. Millstone is currently trying to get Connecticut law changed to enable it sell directly into power markets and bolster its economic competitiveness in a market increasingly dominated by lower-cost natural gas plants.

Eversource speaks regularly to various organizations about energy-related issues but energy efficiency matters and standards are chiefly in the hands of the state's department of energy, company spokesman Mitch Gross said.

The department is being urged to use its powers to increase and maintain product efficiency standards in reaction to any moves the Trump administration and new leadership at the U.S. Department of Energy might make. DeLaski said his group published its recent list of estimates for the first time in six years due to a possibly changing environment for product efficiency standards. President Donald Trump has yet to address the topic directly.

“There is a lot of rhetoric coming out of Washington about repealing regulations,” deLaski said. “Although efficiency standards have not specifically targeted by the new administration, we are concerned that the general anti-regulatory fervor taking hold in D.C. that could lead to attacks on efficiency standards.”

Trump is a major reason for increasing optimism among Connecticut business leaders, however, according to CBIA’s latest business confidence poll released this week. Of the 173 respondents to the fourth quarter Economic and Credit Availability Survey, 59 percent said Trump’s policies will have a positive impact for more growth with only 10 percent forecasting a negative impact with less growth. The survey didn’t ask any questions about Connecticut energy policies.

It was another Republican president, Ronald Reagan, who signed the original national appliance standards bill in 1987, which established 13 standards for household appliances. Presidents George H.W. Bush and George W. Bush, also Republicans, signed law expansions to cover more than 50 categories of products used in homes, businesses, and industry, deLaski’s report notes.

“Standards protect consumers from egregiously wasteful products that can unnecessarily cost them money,” deLaski said. “We want to make sure that political leaders in Washington don’t undermine these important protections.”

Norwalk-based Xerox Corp., world famous for its copiers, generally likes appliance efficiency standards issued by the U.S. government, company spokesman Bill McKee said.

“We view national standards as leveling the playing field and that allows the consumer to make objective purchasing decisions,” he said. “Achieving conformance with these standards often makes it easier to sell our products, particularly if the customer has included the national standard in their purchasing criteria.”

The Connecticut Department of Energy and Environmental Protection has a strong record of attention to energy efficiency, spokesman Dennis Shain said. The American Council for an Energy-Efficient Economy, co-sponsor of the deLaski report, last year ranked Connecticut No. 5 among states for its energy efficiency, Shain noted.​

March 2, 2017 - 1:52pm