Connecticut and the rest of New England became increasingly dependent on coal and oil plants in December, driving up the price of electricity, as the region’s overreliance on natural gas is reaching its breaking point.
The problem will be reflected on ratepayers’ electric utility bills in January, particularly those 800,000 customers of Connecticut Light & Power and United Illuminating who haven’t yet switched to an independent electric supply for the generation portion of their bills.
“At this point, it looks like the generation service charge portion on customer bills will be going up,” said CL&P spokesman Mitch Gross.
Because New England has a limited supply of natural gas imported to the region each day, power plants relying on natural gas for fuel have been forced to shut down or scale back their usage as the demand for natural gas in home heating increases in the colder days.
As those natural gas power plants shut down, New England must rely on other power plants to meet the electric demand of the region, namely older coal and oil plants. Typically, coal and oil plants combined generated less than 2 percent of the region’s electricity; but on Tuesday coal made up 14 percent of New England’s generation while oil made up 8 percent, according to regional power grid administrator ISO New England.
The switch to more coal and oil plants is driving up the price of electricity in the region, since these plants are older, less efficient, and run on a more expensive fuel than natural gas.
“You are already seeing some impact in the electric rates,” said Dan Esty, commissioner of the Connecticut Department of Energy & Environmental Protection.
Because of the reliance on coal and oil, electric rates on utility customers’ bills will increase on Jan. 1, said Esty. The Public Utilities Regulatory Authority has yet to set the rates for utility customers, but Esty anticipates the increase when the ruling does come down.
Those electric rates will decrease in mid-2014 once the region moves beyond the cold winter months and the natural gas power plants operate a full capacity again, Esty said.
Long-term, Connecticut and the rest of the New England states will work to address the natural gas supply constraints through a special regional energy partnership announced in early December. The states will identify places where natural gas pipelines can be expanded into New England.
“This attempts to deal with an energy infrastructure deficit that has emerged over the last several decades,” Esty said.
