🔒CT businesses have tools to fight rising energy costs

With apologies to John Steinbeck, Connecticut’s rising energy prices are making this the winter of Connecticut’s discontent.

While other costs in the supply chain have been increasing for some time, Connecticut’s energy costs have remained relatively stable. That is about to change, however, with recent price increases announced by both Eversource and The United Illuminating Co. (UI).

Starting Jan. 1, 2022, electricity costs are expected to rise dramatically, with Eversource customers seeing a projected average increase of 21%, and UI customers seeing a projected average increase of 10.4%. Natural gas customers are not expected to fare any better, with Eversource telling its customers to expect an average increase of 14% starting in the new year.

While none of this is good news for Connecticut businesses, there are a few programs that could blunt increased energy prices. Many businesses took advantage of energy efficiency programs that lowered energy use and costs when they first came out several years ago. Some businesses avoided these programs fearing that it would take too long to recoup the costs of the projects.

With prices on the upswing, it pays to revisit Connecticut’s energy programs.

Growing your own energy

In the face of infrastructure issues associated with storms and the rising cost of electricity, there are incentives for companies to “get off the grid” and generate their own power, particularly renewable power.

Both Eversource and UI have net metering programs for customers who generate their own electricity from renewable sources, such as solar. The electricity used by the facility will be netted against the power generated at the facility.

If the energy project generates more electricity than the facility uses in a month, that excess energy is “banked” for up to one year. At the end of the annual period, if excess generation is still banked, the company receives a payment from the utility.

There are incentives available for renewable energy programs, including zero and low interest loans to pay for the up-front costs associated with such projects. In addition, Connecticut approved incentives for electricity battery storage this summer, making energy projects with intermittent resources like solar energy even more attractive.

Commercial and industrial customers of Eversource and UI can receive upfront incentives of up to 50% for the development of battery storage systems. The program is scheduled to begin Jan. 1, 2022, the same time energy costs will be increasing.

Charging electric vehicles

While electric vehicles (EVs) currently make up a small part of Connecticut’s automobile fleet, that number is expected to rise dramatically over the next few years.

The automobile industry is developing dozens of new electric vehicle models, and all of those electric cars are going to need somewhere to charge.

In July, Connecticut regulators approved a plan to incentivize EV charging stations and infrastructure. The recently passed federal infrastructure package provides Connecticut with an additional $53 million to bolster EV charging stations and infrastructure, making now the ideal time to consider EV charging stations.

Connecticut regulators are now working with the state’s utilities to develop an EV charging incentive plan for both residential and commercial chargers.

For apartment buildings and public destinations, the state will provide incentives of up to 50% of the cost of the chargers and up to the entire amount of the make-ready work for the installation, provided that at least two chargers are being installed.

Workplaces can obtain the same incentives if they install at least four chargers. Up to $20,000 is available in incentives per site, but that number doubles for charging sites located in “underserved communities.”

Energy efficiency programs provide ROI

If charging stations or renewable energy projects are too ambitious, energy efficiency programs can be a good way to lower energy costs quickly, with a minimum of up-front investment.

Both UI and Eversource offer incentive programs for businesses that want to upgrade outdated, less efficient equipment, including building controls, refrigeration units and controls, heating and cooling equipment, and lighting systems. Incentives are also available for energy audits and assessments.

Companies seeking to replace this equipment may be eligible for financial incentives of up to 40% of the installed costs and financing at zero or low interest rates.

Many of these projects have a return on investment that is measured in months, not years, which can be especially valuable when energy costs are on the rise.

Lee D. Hoffman is chair of the environmental, energy and telecommunications practice at law firm Pullman & Comley.