Heating Oil Dealers Plan To Pan Malloy’s Energy Policy
(Updated 6:32 p.m.) Heating oil dealers across Connecticut are planning to show up in large numbers Monday for a public hearing on Gov. Dannel P. Malloy’s draft energy policy.
The group led by the Independent Connecticut Petroleum Association is upset with plans to encourage 300,0000 homeowners and businesses to switch from heating oil to natural gas.
“The entire foundation of the plan is the mistaken assumption that natural gas prices will stay the way they are today and last for a long, long time,” Gene Guilford, president of the Independent Connecticut Petroleum Association, said Monday.
“Why does a $15 to $16 billion monopoly need the help of the state to build their business?” Guilford said in a phone interview.
At an unrelated press event, Malloy denied picking winners and losers in the energy market. He said about 30 percent of Connecticut residents use natural gas to heat their homes, while natural gas has a penetration rate of about 47 percent in neighboring states.
“It’s undeniable what the rates are right now,” Malloy said. “There are significant savings to be had.”
Natural gas is currently one-third the price of home heating oil.
But how long will that advantage last in a competitive, dynamic energy market?
Guilford said heating oil has been less expensive than natural gas 24 of the past 28 years. He said the state’s draft plan assumes the difference in price between natural gas, which is cheaper at the moment, will continue to be cheaper.
“The overall goal is if people opt to heat and use gas, they should have that option,” Malloy said. “And we should get out of the way.”
He was adamant that the state is not requiring anyone to hook up to natural gas.
“An unfair advantage is giving people a choice?” Malloy said. “When was the last time that that was the definition of an unfair advantage?”
In an effort to promote his energy argument, Malloy was to visit a neighborhood in Woodbridge on Monday afternoon where a local school worked with the utility company to convert to natural gas.
The extension of the gas line in the area of Amity Regional High School will give more than 79 homeowners the option to convert, Malloy said. Between one-third or half already have said they would hook up because this extension was built.
Guilford said the governor is talking about a natural gas monopoly that the state regulates and he doesn’t believe the governor should be promoting the utility. He said if consumers want to convert then they should, but the draft plan encourages the utilities to build 900 miles of natural gas lines in Connecticut.
“We don’t think the person approaching consumers should be the governor,” Guilford said. “The state should be the regulator, not a cheerleader.”
There are two natural gas utilities in the state. Connecticut Natural Gas and Southern Connecticut Gas Company, which are owned by United Illuminating, and Yankee Gas, which is owned by Northeast Utilities.
Guilford said the state should be encouraging more conservation, instead of picking one fuel over another.
He said the more than 13,000 employees in the heating oil business have helped consumers lower their average consumption from 1,100 gallons per year to 700 gallons per year.
Guilford also argues that heating oil is blended with biofuel to cut down on the amount of sulfur, which will reduce emissions and lower Connecticut’s carbon footprint faster than natural gas.
Mitch Gross, a spokesman for Yankee Gas, said officials from his company offered input to the governor’s office when the draft plan was created. He said they will offer further comment during the legislative session.
Michael West, a spokesman for Connecticut Natural Gas and Southern Connecticut Gas, said the company is supportive of the strategy, which it believes will help them achieve their goal of increasing their customer base.
A year before the governor even released the draft proposal, West said the utility planned to expand its customer base by 30,000 to 35,000 customers over the next three years. So while the utility isn’t relying solely on the state’s energy plan, it will help them say yes to more customers, West said.
The natural gas companies routinely have to turn down customers’ requests to receive natural gas because the gas line doesn’t come close enough to the home or business. The state plan will put more customers within reach.
The draft policy, which Malloy released in October, is open to discussion at several public hearings around the state and will be debated by the legislature when it convenes in January.
Monday’s hearing will be held at 6 p.m. at Kennedy Mitchell Hall of Records, 200 Orange St., New Haven. There’s also a hearing on Tuesday at 9 a.m. in the Phoenix Auditorium, at DEEP’s offices, 79 Elm St., Hartford, and 6 p.m. in Room 106, at UConn - Center for Environmental Sciences and Engineering, 3107 Horsebarn Hill Road, Building 4 Annex, U-4210, Storrs.
The last hearing will be held at 6 p.m., Nov. 26 at City Hall in Torrington, 140 Main St..