- Higher energy prices expected to impact company profits and consumer prices
- Governor Ned Lamont outlines steps state agencies are taking to try to mitigate the effect of anticipated energy price increases
- Specialized payment plans, efficiency incentives are among the efforts designed to help businesses and residents
Summary by Dirk Langeveld
With residents and business owners expected to face higher energy costs this coming winter, Governor Ned Lamont and officials from other Connecticut agencies outlined steps the state is taking to try to reduce the impact of such price hikes on businesses and homeowners.
Lamont said global energy commodity cost increases are expected to drive higher energy costs, including an anticipated 33 to 57 percent hike in electric rates between the latter half of 2021 and the first half of 2022, a 40 percent annual increase in heating oil prices, and a 10 to 20 percent jump in natural gas prices. He said factors contributing to higher prices include a renewed surge in consumer demand after a pandemic-related slump, supply chain disruptions, and weather-related factors such as Hurricane Ida.
Business analysts say higher energy costs are likely to narrow the profit margins for companies. Some firms have warned that the added costs could be passed on to the consumer in higher prices for goods and services.
“Connecticut and its residents, like everyone else around the United States and the world, are unfortunately seeing the impact of rising energy prices,” said Lamont. “The pandemic, the investment decisions of oil and gas producers, and severe weather events have put everyone in this situation, but my administration is working hard to ensure our policies and programs can help lessen the impact of these global energy trends on our residents and businesses – including smart energy purchasing, investing in efficiency and nuclear, and making sure there’s help available for residents and businesses who will be most impacted by these cost increases.”
Katie Dykes, commissioner of the Connecticut Department of Energy and Environmental Protection, said the state’s strategies to address energy prices have included strategies to reduce Connecticut’s reliance on natural gas and diversify how it generates power, increased oversight of electricity supply procurement, energy efficiency programs and incentives, assistance with energy bills, and the use of COVID-19 relief funds to bolster utility bill relief programs.
The Public Utilities Regulatory Authority has directed all regulated electric, gas, and water utilities to make COVID-19 payment plans available to both residential and non-residential customers through February 2022, which is currently when the state’s public health emergency declaration is set to expire. These plans provide financial assistance allowing customers to address past due balances while keeping up with their current monthly bills. They require no initial or down payment, or demonstration of financial need. They can also be 24 months in length, and any fees or interest are waived in calculating the monthly payment amount.
The EnergizeCT program offers businesses and residents financial incentives for energy-saving upgrades such as home energy audits, insulation, and heat pumps. Lamont said funding for these programs was restored in 2019 after frequently being tapped by the legislature to fund other priorities.
A larger scale effort involves an effort to reform New England’s regional electricity grid, which is heavily dependent on natural gas. This makes the grid more vulnerable to changes in natural gas prices as well as disruptions during prolonged cold weather periods, when the natural gas supply is not sufficient to meet both heating and power generation needs.
Connecticut has increased its investments in renewables, nuclear energy, and energy efficiency improvements as well. These include the procurement of 1.11 GW of offshore wind energy, 710 MW of grid-scale solar energy, and 445 MW of energy efficiency. The state also estimated that it saved ratepayers $2 billion by taking action to prevent the Millstone nuclear power plant from closing in 2019.
Lamont said previously enacted protections include greater state oversight of the procurement of retail electricity supply for utility standard service, a prohibition on variable rates, consumer protection laws to protect cancellation fees, moratorium on heat shutoffs for eligible households, and the UniteCT program to provide rental and utility assistance to those suffering financial hardship due to COVID-19.