AGA Survey and Statistics System; AGA-CEE Natural Gas Efficiency Programs Survey: Utility expenditures for gas efficiency programs exclude data that have not been released by participating companies at the state level; U.S. Energy Information Administration; and U.S. Department of Transportation.
Statewide Elected Officials Next Election: 2018
Dan Malloy (Dem.)Governor
Nancy Wyman (Dem.)Lieutenant Governor
George Jepsen (Dem.)Attorney General
Legislature Next Election: 2018Session Dates: 02/03/16-05/04/16
Term: 4 year
President: Nancy Wyman
President Pro Tempore: Martin Looney
Senate Majority Leader: Bob Duff
Senate Minority Leader: Len Fasano
Senate Member Breakdown
House of Representatives
Term: 2 year
Speaker of the House: Brendan Sharkey
Majority Leader: Joe Aresimowicz
Minority Leader: Themis Klarides
House of Representatives Member Breakdown
Connecticut Public Utilities Regulatory Authority Commissioners: Gubernatorial appointment, General Assembly confirmation: 4 year termChairperson: Elected by fellow Commissioners: 1 year term
Katie Dykes (D), ChairAppointed by Governor Dan Malloy in 2016; term expires in 2020
John Betkoski III (D), Vice Chairman Appointed by Governor John Rowland in 1997; current term expires in 2019; Elected Vice Chairman in 2007
Michael Caron (R), Commissioner Appointed by Governor Dan Malloy in 2012; current term expires in 2017
Connecticut Natural Gas and Southern Connecticut Gas (herein after CNG/SCG--both owned by UIL) have designed and tested a zero-capital program, which was to help spur third-party CHP owners with customers interested in on-site CHP.
The program would encourage five or ten year power purchase agreements (PPAs) between customers and the third-party developers and owners.
Under this model, CNG/SCG parent UIL would be able to enjoy the benefits of CHP on its electric system without having to own the CHP systems, which it is not permitted to do under current market rules.
CNG/SCG also explored developing an unregulated subsidiary that could legally own these generation assets.
CNG/SCG also offer CHP program as part of their Energy Efficiency programs. These programs feature tiered incentive levels.
The Connecticut Clean Energy Finance and Investment Authority offers a CHP Projects Pilot Program that provides individual awards equivalent to up to $450/kW to promote the development of CHP systems with a capacity rating of 5 MW or less in either CL&P’s or UI’s service territory. CEFIA seeks proposals for grants, loans, loan enhancements or power purchase incentives to help developers finance the cost of CHP projects. The value of each individual award will vary based on the specific technology, efficiency and economics of the CHP installation. CEFIA selects qualifying CHP projects of up to a maximum of 50 MW of capacity for the entire three-year period of the CHP Projects Pilot Program.
Governor Dan Malloy announced the Comprehensive Energy Strategy (CES) for Connecticut in 2012. Focusing on five major priority areas—energy efficiency, electricity supply including renewable power, industrial energy needs, transportation and natural gas—the plan consists of a series of policy proposals aimed at expanding energy choices, lowering utility bills, improving the environment, creating clean energy jobs and enhancing quality of life.
A key component of the plan includes making lower cost natural gas options available to more than 250,000 residents and 75% of businesses over the next seven years. Specifically, it calls for financing options to be made available to eliminate the upfront burden of conversion to natural gas appliances, alternative financing for low-income homeowners, and regulatory changes to enable potential gas customers to have their connections financed by the state’s utilities and repaid through added revenues of new customers.
The plan also provides for the establishment of incentives for utilities to ramp up required infrastructure quickly.
Public Act 98-28 created the Energy Efficiency Board (EEB), which is appointed by the PURA and administers the Connecticut Energy Efficiency Fund (CEEF). The EEB advises and assists the electric and natural gas utilities in the development of energy efficiency programs included in their Conservation and Load Management Plan. The EEB also has authority over LDC energy efficiency performance incentives. The LDC incentive, referred to as a “management fee,” can be from 2-8% of the program costs before taxes. The threshold for earning the minimum incentive (2%) is 70% of the goal. At 100% of the goal, the incentive would be 5%. At 130% of goals, it would be 8%. Program costs are recovered through rates.
In 2005, Public Act 05-1 required the investor-owned natural gas companies to submit energy efficiency program plans to the Commission.
In 2007, Public Act 07-242 placed new requirements for energy efficiency and establishes new regulatory mechanisms, such as natural gas decoupling. It should be noted that no gas utility obtained a decoupling mechanism until Connecticut Natural Gas received approval in January of 2014 (Docket No. 13-06-08). The Commission declined to implement an all cost-effective efficiency procurement requirement for electric and natural gas utilities.
In 2013, the state passed H.B. 6360, An Act Concerning Implementation of Connecticut’s Comprehensive Energy Strategy. The Act contained provisions requiring gas distribution companies to create triennial energy conservation plans and increased funding levels to the point where the state’s all cost-effective mandate is achievable.
Governor Malloy’s Comprehensive Energy Plan called for regulatory changes to enable potential gas customers to have their connections financed by the state’s utilities and repaid through added revenues of new customers.
The plan also provided for the establishment of incentives for utilities to ramp up required infrastructure quickly.
The Governor submitted two pieces of enabling legislation which aided in the implementation of these policies which passed the legislature in late May 2013.
In response to that legislation, Connecticut Natural Gas, Southern Connecticut Natural Gas and Yankee Gas filed a joint proposal with the Connecticut PURA outlining a new rate plan to finance the tens of millions of dollars they have proposed to spend to connect 280,000 customers to natural gas pipelines over the course of the next 10 years. Under the proposal, new rates would spread the costs of hookups over 25 years, eliminate a required contribution toward construction for customers connected to gas pipelines that are 150ft or closer to gas mains and make other rate changes to encourage a large-scale switch to natural gas.
In addition, Spectra Energy is pursuing plans to upgrade and expand its system in the state. At this point Spectra’s plan includes replacing 33 miles of older transmission lines with newer pipe in various segments along the Algonquin transmission line. That upgrade will allow the pipeline to handle greater volumes of natural gas. In addition, the company plans to add 19 miles of new pipeline to the spurs that go into various parts of eastern Connecticut.
On November 22nd PURA issued final approval of the states’ utilities’ natural gas expansion plan. The final decision contains several key differences from the Nov 6th draft including:
Simplification of the new rate and cost recovery mechanisms associated with expansion; Effective January 1, 2014, all new customers who live near existing mains, but do not currently use gas, will pay a 10 percent premium over existing distribution rates for a 10-year period. Customers who live in areas without mains will pay a 30 percent premium on distribution rates (the draft had included other, higher premiums); Premiums will cease after 10 years and are to be paid only on the distribution portion of rates which account for 40-60% of a customer’s bill; Requires utilities to get firm commitments from 60 percent of customers it needs to make the expansion into any given neighborhood economically viable; Requires utilities to develop a conversion cost calculator to help consumers get “ready access to the tools necessary to decide whether gas conversion is the best solution to their individual needs”; Standards that would trigger a re-evaluation of its approval of the expansion plan including substantial failure to meet customer conversion forecasts, an increase in residential gas rates of 5 percent in any given year or 15 percent over the 10 year period, as well as spikes in price of gas compared to delivered heating oil.
In a January 22, 2014 Order, the Public Utilities Regulatory Authority directed the Connecticut Natural Gas Corporation to track and report its actual revenue requirement and revenues for the gas pipeline expansion activities through a System Expansion Reconciliation Mechanism.
In January of 2015, Yankee Gas reported that it had surpassed its 2014 goals for expanding natural gas service to more Connecticut customer. The company added more than 5,500 customers via conversions from other types of fuel to natural gas, which is 300 more conversions than it originally had projected for last year. In the process, Yankee Gas added about 20 miles to its distribution network.
In January of 2015, the PURA issued an order approving a settlement which clarified the following issues related to expansion:
Clarification on the definition of “portfolio view” projects: An acceptable portfolio view of customers allowed in a single hurdle rate analysis would be those new Off-Main Customers (i) on a continuous new main; (ii) on new main(s) within a radius of up to two miles, the center point of which is defined at the start of construction; or (iii) a project serving a single customer with multiple locations;
The 20% estimation accuracy threshold applicable to portfolio projects (Accuracy Threshold): For Negative Variances To the extent that a negative Project Cost Variances in excess of 20% is identified for a project, the Companies shall earmark Project Non-Firm Margin Credits (NFM) to offset such variance. If Project NFM is unavailable to cover the full variance amount, the Companies shall prioritize subsequent allocations of Project NFM to cover the amount of any such residual variance;
For Positive Variances: Where there is a negative PAV Percentage less than 20%o, such Variance shall be passed through the System Expansion Reconciliation mechanism (SER);
The 60% pre-construction commitment threshold applicable to portfolio projects (Commitment Threshold): For Small Projects, the Companies must obtain customer commitments for 60% of the estimated Breakeven Revenues prior to commencement of construction. For Large Projects, the Companies will not be required to obtain customer commitments for 60% of the estimated Breakeven Revenues prior to commencement of construction. However, the Companies shall obtain contractual commitments from all Anchor Customers participating in the project prior to the commencement of construction;
The allocation of Non-Firm Margin Credits (NFM): Companies will calculate their respective share of Project NFM by taking the simple average of: (1)Each company's respective percentage of total firm PGA revenues for the 12 months ending December of the previous year; and (2)The respective percentage of total capacity cost as listed on the December PGA filing of same year. The percentages derived from this calculation will be used to determine the amount of Project NFM available to each LDC in each year of the Plan.
In March of 2015, the Connecticut Joint Committee on Energy and Technology took up Raised Bill No. 1074. This measure would authorize municipalities to grant tax abatements to natural gas local distribution companies and pipeline companies to reduce the cost of, and enable natural gas expansion projects to the municipalities' residents and businesses alike. This bill died on March 26, 2015.
In a June 2011 order, PURA approved Yankee Gas’ proposal to increase its capital spending on cast iron and bare steel replacement by approximately $13 million in Rate Year 1, and approximately $25 million in Rate Year2. Yankee plans to maintain this $40 million capital spending level (i.e., $15 million authorized in 06-12-02PH01 plus an incremental $25 million) in each subsequent year. The Commission found that this level of spending was reasonable to adequately provide for the integrity of Yankee’s pipeline system and it anticipates that this level of replacement will reflect the improvement required by the DIMP regulations.
On January 22, 2014 The Public Utilities Regulatory Authority approved a Distribution Integrity Management Program (DIMP) mechanism that allows recovery of the revenue requirement for main replacement activity between rate applications. Additionally, the PURA approved a schedule and budget for system integrity projects that target needed replacement of cast iron mains, bare steel mains and bare steel services.
Connecticut Natural Gas Corp. owns a CNG station in East Hartford, CT which is currently limited to private use.
Legislation (House Bill 6360) enacted in July 2013, mandates the adoption of decoupling mechanisms for the state's electric and gas utilities. The law states that the PURA must consider the impact of decoupling on the electric or gas utility's return on equity and make necessary adjustments thereto.
In its 2013 rate case, Connecticut Natural Gas proposed a revenue-per-customer decoupling mechanism that promotes the energy efficiency and natural gas expansion goals set forth in the State of Connecticut’s Comprehensive Energy Strategy. The decoupling mechanism permits the collection of revenues necessary to maintain and operate the distribution system. The revenues collected for gas sales will be credited back to customers. This mechanism was approved on January 22, 2014.