Connecticut is most expensive for energy
When it comes to overall energy costs, Connecticut is the most expensive state in the nation for consumers, according to a new analysis.
The analysis by WalletHub, a Washington, D.C., personal finance website, found that Connecticut residents are paying an average of $380 per month for energy. The analysis used a special formula to account for the following residential types: electricity, natural gas, motor fuel and home heating oil.
Connecticut residents are paying an average of $48 per month more than consumers in the second-most-expensive state: Alaska. Residents of Washington state, the least expensive state in terms of overall energy costs, pay an average of $154 per month less than their counterparts in Connecticut.
Of the four categories analyzed, Connecticut’s most expensive energy source is electricity; the average resident pays $166 per month, second only to Hawaii. Connecticut was ranked second in average heating oil expenses at $76 per month.
The state’s consumers have the nation’s second-highest average home heating oil consumption rate.
The average monthly natural gas bill for Connecticut residents is $39, and the state is ranked 19th in average monthly natural gas costs. The WalletHub analysis ranked Connecticut 35th in monthly motor vehicle fuel costs, with the average consumer in the state paying $99 per month.
Why is energy in Connecticut so expensive? To some extent, it’s the result of geography.
“We’re at the end of the spigot,” said Joel Gordes, a West Hartford energy consultant, referring to Connecticut’s location in relation to the location of the nation’s oil and natural gas fields.
David Spence, a professor of business, government and society at the University of Texas, said the pipelines that bring natural gas to Connecticut and the rest of New England have “a constraint” in the amount they can deliver during peak demand. That constraint drives up the cost of natural gas during those periods.
“That also increases the price of electricity (generated) from natural gas at those times,” Spence said.
A large percentage of the power plants in New England that produce electricity run on natural gas.
On a recent evening, for example, 64 percent of the power plants operating were powered by natural gas, according to regional power grid operator ISO-New England.
Nuclear power accounted for 24 percent of the electricity generated in the region during the same time.
Dennis Schain, a spokesman for the Connecticut Department of Energy and Environmental Protection, said the WalletHub findings hardly come as a surprise.
“When it comes to residential heating, Connecticut has been historically very reliant on heating oil,” Schain said. “More than 40 percent of homes in the state use heating oil, which is more expensive and burns dirtier than natural gas. We have been working with the gas utilities to have them expand service areas and offer more people the opportunity to choose natural gas for home heating.”
But increasing residential usage can come with its own set of problems, Gordes said.
Because of the constraints in the natural gas pipelines, increasing the number of residential natural gas customers means less capacity for power plants, he said. That’s because the fuel is delivered to residential natural gas customers on what are called “firm” delivery contracts, meaning they can not be interrupted. Power plants, on the other hand, typically operate on interruptible delivery, in part because it is cheaper than a firm contract.
Schain said the state is placing a high priority on improving energy efficiency in Connecticut.
“In past few years, funding for popular and cost-effective efficiency programs for homes and businesses has more than doubled,” he said. “People are taking advantage of these programs to reduce energy use and therefore reduce their bills. People are getting home energy audits and taking follow-up action to save money on heating, lighting, cooling.”
Call Luther Turmelle at 203-680-9388.