Sierra Club of CT calls for suspension of Comprehensive Energy Strategy

Below is a press release submitted by The Sierra Club of Connecticut.

The Sierra Club of Connecticut, along with leading consumer, energy and environmental advocates, is demanding the State of Connecticut suspend and potentially redesign its planned Comprehensive Energy Strategy (CES). The CES is the roadmap for the State’s energy market going forward. The State’s recently released plan calls for an increase in the use of natural gas for electricity generation while severely limiting consumer energy choice and the deployment of distributed renewable energy like rooftop solar.

The CES plan was largely predicated on the argument by the electric utilities that undersupply of natural gas has been hurting the State’s ability to meet its energy needs and is driving up electricity costs.

However, an explosive new research paper on alleged gas-market manipulation by utilities in New England calls those assumptions into question. The white paper, from economists at three universities and funded by the Environmental Defense Fund, determined that Eversource and Avangrid/UI withheld gas from pipelines which cost customers in Connecticut and Massachusetts an additional $3.6 billion over a three-year period ending 2016.

In the past several weeks, investigations have been initiated at the state and federal level regarding allegations that Eversource and Avangrid have been involved in “systematic withholding of pipeline capacity.” Withholding pipeline capacity creates false shortages of energy at key moments, driving up electricity pricing. Eversource and Avangrid are unique in that they are both electric utilities and gas companies, with a monopoly on electric and gas distribution in Connecticut. The Public Utilities Regulatory Authority of Connecticut (PURA) and the Office of Consumer Counsel launched an investigation into the possibility of “market power abuse” by the utilities last month.

The Connecticut Sierra Club is calling for PURA to determine if the CES was predicated on faulty, if not fabricated, data as it relates to natural gas supply for current and future electricity generation; the massive expansion of gas pipelines throughout the state; and assumptions about electricity pricing in Connecticut going forward. George Jepsen, the State Attorney General assured Connecticut Sierra Club that his office will monitor the findings of the PURA investigation before deciding whether to investigate.

Martha Klein of Connecticut Sierra Club issued the following statement: “The report’s findings suggest that Connecticut is not experiencing a natural gas shortage — but rather an artificial constraint of gas supply — creating the appearance of pipelines at capacity. This has reportedly inflated Connecticut residents’ utility costs over the past three years, while simultaneously creating the justification for the unnecessary and expensive natural gas expansion reflected in the CES. We believe any attempt to implement the State’s planned energy strategy should be suspended until we see the result of PURA’s investigation. If the findings of this research are confirmed, then the companies involved may have not only manipulated past electricity markets, but have had a front row seat in drafting the future of Connecticut’s energy supply going forward.”

“Even before the market study revealed potential manipulation of the region’s natural gas and pipeline markets, we have argued there was no need for an expensive gas expansion. Studies confirm Connecticut’s declining need for natural gas and the current underutilization of pipelines, making the expansion underway on the Kinder Morgan and Enbridge/Algonquin pipelines wasteful. Future pipeline expansion will cost New England consumers $6.6 billion, and Connecticut electric ratepayers will be taxed $85 million or more to pay for a pipeline they don’t need,” said Klein. “Now would be a good time for Connecticut to rethink its energy strategy, challenge its overwhelming dependence on natural gas, and open the market up to competition and choice for consumers. We are looking to the state to rethink natural gas, and increase access to distributed renewable energy like rooftop solar. We’ve put all our eggs in one basket for too long. It’s time to open our energy sector to innovation."