Though utilities in states with high carbon emissions will have the toughest time complying with a proposed set of U.S. Environmental Protection Agency pollution-reduction regulations, states with high energy costs like Connecticut also will have a tough slog, Fitch Ratings said in a report Friday.
Arkansas and Texas would have the greatest carbon-reduction burden, under the proposal, which could be finalized this year, but could also be delayed by Congress, Fitch said.
However, high energy costs in Connecticut and New York could create a challenge in recovering even relatively low compliance costs through rate increases, Fitch said.
“Many public power utilities already near the top of what’s affordable for customers could face backlash to raise electricity rates further, Ryan Greene, Fitch’s director of U.S. public finance, said in a statement. “However, not raising rates comes at a price, too, as it could impair credit quality.”
Fitch said it’s almost certain utilities will pass compliance costs onto customers.
The EPA’s plan calls for Connecticut to reduce by 2030 its carbon dioxide per net megawatt hour of energy produced from fossil fuels to 540 pounds, which would represent a reduction of 20 percent to 30 percent.
