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OP-ED | We Want To Know What DEEP Is Hiding

by Gene Guilford | Jan 17, 2013 10:33am
(1) Comment | Commenting has expired
Posted to: Opinion

During his State of the State address, Gov. Dannel P. Malloy said his comprehensive energy strategy shows us “the way forward.” If this is the case, we would like the governor to tell his politically appointed staff members at the Department of Energy and Environmental Protection to show us exactly what they are hiding!

THE COVER-UP?

On Dec. 24, 2012, the Connecticut Energy Marketers Association [formerly ICPA], filed a Freedom of Information Act request for all documents, communications, and work products between the DEEP and its own regulators, the Public Utility Regulatory Authority or PURA.

We filed the request after staff members at PURA told us they were being muzzled by politically driven members at DEEP from commenting on the plan. We were also told that three PURA staff members staged a “sick-out” in protest, but their good will got them nowhere.

PURA staff members asked DEEP for an extension of time to comment on the plan. DEEP denied that request.

We want to know what DEEP has to hide when it won’t allow its own PURA staff and experts on natural gas the opportunity to comment on the plan.

The refusal to let its own regulators speak on the matter has all the makings of a cover-up by the politically driven staff members at the DEEP. We believe this energy plan was built on a house of cards by politically motivated people who know nothing about energy and its markets. If we are wrong then surely DEEP Commissioner Dan Esty won’t mind laying all his cards out on the table for all to see.

However, we don’t see that happening anytime soon. We believe there is good reason why the Commissioner is keeping his hand close.

HOUSE OF CARDS

The plan is betting on the fact that natural gas prices will stay where they are today at an all-time low, something highly unlikely. If the price of natural gas escalates, as most predict it will, the house of cards will fall fast and hard. The $6.8 billion dollar energy plan will do nothing more than strengthen the monopoly stronghold utility companies already have over the state, giving consumers fewer choices, not more. Fewer choices mean higher energy prices for everyone.

We found more problems with the plan. Based on our analysis, the projected savings for homeowners switching from home heating oil to natural gas are way off the mark! The cost analysis used regional figures for the price of natural gas but the cost in Connecticut has always been higher than the region which drastically cuts into those “projected savings.” Plus, our expert with more than 35 years experience, found homeowners who switch to natural gas would have to wait 15.8 years before seeing any savings once you factor in the cost of gas line extensions and that’s only if, and this is a big if, the price of natural gas stays where it is today, at an all-time low.

Markets fluctuate and change. Unless the governor has a crystal ball, no one can truly know what the cost of natural gas will be in the future. Putting all his eggs in one basket is not the answer.

UTILITY BAIL-OUT?

The big $6.8 billion dollar question that comes along with the proposed energy plan is who will pay for it?

Last Spring, during testimony of SB450, utility executives testified that building new natural gas lines throughout the state was too speculative to ask shareholders to pay for it. If rich shareholders of a multi-billion dollar corporation won’t pay for it, why should tax payers or rate payers? The devil is in the details which are severely lacking in this plan.

After having the highest tax hike in state history, the most debt of any other state in the nation, anyone who thinks taxpayers should pay for this proposed energy plan is off their rockers. This plan is nothing short of a bail-out for utility companies who don’t want to front the cost of the project. These utilities are the same companies who couldn’t keep the lights on during recent storms.

In his State of the State address, Gov. Malloy talked about problems associated with Hurricane Irene and the October Nor’ Easter of 2011. Gov. Malloy said it was a “wake-up call” and “we woke-up”. Yet, The governor goes on to reward these same utility companies for an extremely bad performance. Apparently, some in Hartford must still be sleep walking.

THE DECK STACKED AGAINST US

CEMA and the 585 home heating oil companies, propane dealers and others we represent have no problem competing honestly against the natural gas companies. However, this is hard to do when the deck is stack against us and the dealer is the state government.

We believe the state government should not be in energy business picking winners and losers, especially when it has its thumb on the utility companies. The key to lower energy costs in the state is through conservation and by lowering the taxes already placed on our industry.

The government and utilities in the 50s told us that electricity would be too cheap to meter. That led to the all-electric homes of the 60s and 70s and we learned later what a mistake that was as consumers couldn’t afford to pay their electric bills as rates skyrocketed. The Connecticut energy plan does the same thing all over again, this time, with natural gas.

Twenty-four out of the last 28 years, home heating oil has been cheaper than natural gas. At no point did CEMA lobby the government to convert natural gas users to home heating oil. We would not do that because as an industry comprised of mostly mom and pop shops, we believe the playing field should be level and not one tipped in favor of mega-utilities.

Bottom line, if this plan is the way of the future as the governor says, then let the utility companies pay for it the old fashioned way, with their money and not yours.

Gene Guilford, is the president and CEO of Connecticut Energy Marketers Association since 2003 (formerly known as ICPA ) Guilford also worked for the U.S Department of Energy appointed by President Ronald Reagan.

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posted by: JamesBronsdon | January 17, 2013  11:16am

Interesting article, and more evidence of what can happen when government attempts to impose “solutions” that are better left to the marketplace.  There is a loss of transparency as the government seeks to protect the position it has staked out. Though that’s a natural institutional instinct, the public would be better served with transparency and fair treatment of all participants in that marketplace.  (Not in the least surprised this Administration doesn’t learn from the federal government’s Solyndra escapade.)
Suggestion to the author: Disclose who you represent up front; it makes it easier to follow the narrative.