There’s a lot to like in Governor Malloy’s call for a major investment in infrastructure that would allow more businesses and consumers the ability to choose natural gas.
The argument against a reliance on foreign oil is obvious and Connecticut’s reliance on heating oil is a prime example of a situation that would benefit from choice. The opening of vast new deposits of domestic natural gas is driving prices down and offering a tantalizing option to a state that’s paying a huge economic price for its high energy costs.
Enter the governor with a $6.7 billion plan. Well, actually it’s the same plan the utility companies advanced some months ago, but that’s just a technicality.
The bulk of the cost comes in trying to finance the switchover — new hookups and new appliances. A scheme to finance those through private lenders with repayment tacked on to utility bills seems to get the job done while providing a windfall for the financers.
Another key component is access. Large parts of the state haven’t had natural gas as an option because the lines just didn’t go near them. In unveiling a $1.4 billion plan to add 900 miles of pipeline and a scheme to push the cost onto future bills, the governor is setting in motion a solution that should benefit the state’s economy, many of its businesses and its residents.
But that doesn’t automatically make the governor’s plan a winner. The first question is always who pays? Putting the burden on taxpayers should be a non-starter. Here, it should be the utility companies’ investors who take on the debt, not the state. As a regulated industry, they’ll recoup the cost over the long haul as the result of rate adjustments on users. That’s more appropriate than putting the burden on state taxpayers, some of whom may already use natural gas and others of whom may not want to switch.
Then there’s the matter of over-reliance on one fuel. That’s what got us into this mess in the first place. Now by engineering a mass switch to natural gas, we’re exposing ourselves to new risks. This whole deal is built on the premise that fracking is safe and that the rich shale deposits are ready to be unlocked. What if that’s not true? Last month, New York State put the brakes on its rush to develop natural gas deposits along its southern tier. A whole new round of environmental studies was ordered by Gov. Andrew Cuomo, a long-time supporter of fracking who is now showing signs of doubt about the risk fracking may pose to underground water supplies.
And there are reports from the New England ISO and the Federal Energy Regulatory Commission warning about the region’s emerging over-reliance on natural gas. It’s an arcane topic where we’d be wise to listen to the experts.
Then there’s the radical thought that we’re at a rare tipping point in an industry. If the state just apportions the infrastructure among the existing utilities, we have a predictable outcome. But what if we open it up to competition? There’s an opportunity here that Connecticut shouldn’t miss without exploration.
Malloy’s grand plan now moves into the meat grinder of the legislature where we hope it gets a thorough and rigorous vetting. We’d have more confidence that would happen if we knew who’d be leading the energy committee. The days of bickering between Sen. John Fonfara and Rep. Vickie Nardello appear to be at an end. Virtually everybody seems to want a change of committee leadership, although there’s wide recognition that Fonfara and Nardello know the topic. Let’s hope their replacements do. Seldom have such major decisions rested on the shoulders of unknown power players.
