Conn. regulators find fault with state energy plan

HARTFORD, Conn. (AP) -- Connecticut's utilities regulators are finding fault with Gov. Dannel P. Malloy's plan to reshape state energy policy that would boost natural gas use, saying it would be costly to ratepayers and in some cases fails to consider costs when evaluating investments.

The estimated cost would be $2 billion or more to connect as many as 300,000 homes and businesses to natural gas lines as called for in the plan, the Public Utilities Regulatory Authority said this week. The state doesn't have enough construction crews to do the work, the regulatory authority said.

Malloy's proposal "has the potential to cost ratepayers more for service than they currently pay," regulators said. The regulatory authority called Malloy's plan a "positive first step" toward a comprehensive energy policy for Connecticut but said some proposals rely on assumptions that must be closely reviewed to avoid "uneconomic outcomes."

"In some instances, many costs are not considered when evaluating the appropriateness of investment and details are not provided to support conclusions," the agency said.

State Department of Energy and Environmental Protection spokesman Dennis Schain said Thursday that the analysis is "very wide of the mark" and that the proposal will result in cheaper, cleaner and more reliable energy.

"While PURA expressed concerns about the impact the strategy could have on rates quite the opposite is true," he said.

Sen. Bob Duff, co-chairman of the legislature's Energy and Technology Committee, said he hadn't read the report but criticized regulators for presenting it to lawmakers just three days before a public hearing Thursday on legislation that would enact Malloy's energy plan.

"I think this is more of an exercise of PURA trying to flex their muscle, to show their autonomy," he said.

Malloy rolled out his energy policy last October, linking energy to a cleaner environment and stronger economy by reducing energy costs that would make Connecticut more competitive for business.

A heating oil trade group strongly opposes the plan, criticizing Malloy for using state government to favor natural gas over oil. Chris Herb, vice president of the Connecticut Energy Marketers Association, said the criticism by state regulators supports the trade group's concerns.

"There are lots of costs that need to be paid for," he said. "This is an expensive plan that will be paid for by ratepayers."

Regulators said the substantial expansion of the natural gas system proposed by Malloy "may not occur without funding from all natural gas ratepayers and potentially all state residents." Regulators say they have consistently worked to prevent subsidies.

In addition, potential price spikes in natural gas and the impact on possible customer savings are "of major concern from a ratepayer perspective," regulators said.

The price of natural gas is lower than rising oil prices, but Herb said regulators have called into question claims that natural gas will remain less expensive than oil years from now.

"I think that's the easiest target," he said. "Nobody can predict energy prices."

Source: http://news.yahoo.com/conn-regulators-fault-state-energy-152508621.html

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