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Connecticut regulators move to end subsidies for new natural gas hookups

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Gas meters

Credit: dgies / Creative Commons

By Lisa Prevost

Connecticut regulators want to halt a program that incentivizes homeowners and businesses to convert to natural gas as soon as the end of April. 

The program, which began in 2014, is authorized through the end of 2023. But in a draft decision issued Wednesday, the state Public Utility Regulatory Authority, known as PURA, called for “an immediate winding down” of the program and said it is “no longer in the best interest of ratepayers.” 

PURA has been reviewing the utility-run gas expansion program, which is subsidized by ratepayers, for more than a year. Established under former Gov. Dannel Malloy at a time when natural gas was considerably cheaper than oil, it called for the state’s three natural gas distribution companies to convert 280,000 customers over 10 years. 

After eight years of using marketing and incentives to persuade new customers to sign on, the companies have only reached about 32% of their goal. At the same time, average costs per new service and new customer have tripled for Eversource, and doubled for Connecticut Natural Gas and Southern Connecticut Natural Gas, according to PURA.

In their draft decision, regulators cited the companies’ failure to meet their conversion goals and the rising costs as key reasons for ending the program. In addition, they noted, the price differential between oil and gas has lessened considerably since the program’s start. 

And finally, regulators concluded that the program no longer furthers the state’s climate goals. They cited Gov. Ned Lamont’s recent executive order on climate, which recognizes that the greenhouse gas emissions from the state’s building sector have increased in recent years, and calls for a cleaner energy strategy that reconsiders the continued expansion of the natural gas network. 

While the gas expansion program “was intended to provide benefits to both ratepayers and the environment,” regulators concluded, “the proffered benefits have simply failed to materialize.”

That conclusion echoes a finding by the state Office of Consumer Counsel, which has also called for an end to the program. Ratepayers “are now funding investments that are likely to become stranded assets in light of the state’s climate and clean energy goals,” the consumer advocate said in testimony submitted earlier this year to PURA.

All participants in the proceeding, which include the gas companies, have until April 6 to submit any written exceptions to the draft decision. A final decision from PURA is due on April 27. 

No new enrollments in the expansion program would be allowed after that date, if the draft plan stands. 

The gas companies have argued in earlier filings that the expansion program should continue through the end of 2023. Eversource has maintained that PURA does not have the legal authority to shorten the duration of the plan, and has called for a future docket to “map out” how gas conversions will be handled after 2023. 

“Conversions to natural gas benefit consumers because they increase energy efficiency when consumers replace older oil and propane heating units with newer, more efficient natural gas heating units,” Eversource said in a February filing.

Eversource spokesperson Mitchell Gross said the company is reviewing the draft decision.

“We recognize things have evolved since the system expansion plan was created and are looking at ways to ensure a seamless and equitable transition for our customers,” he said. 

Shannon Laun, staff attorney for the Conservation Law Foundation, said ending the gas expansion plan “would be a huge step forward.”

“It’s time to get polluting, dirty fossil fuels out of our homes,” Laun said. “Gas poisons the air in our homes and is a major driver of the climate crisis.”

A recent California study found that gas stoves emit high levels of nitrogen oxides and are constantly bleeding methane into the air, even when they’re not in use. Methane is a potent greenhouse gas. 

Peter Millman, of Eastern Connecticut Green Action, also applauded the draft decision. 

“Next we need to go farther by limiting the installation of gas and oil equipment in all new construction,” he said, “and then take a broad look at the future of heating by gas, as our neighbors in Massachusetts are doing.”

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