Malloy energy plan pits natural gas against oil

Published on NewsOK Modified: December 3, 2012 at 11:40 am •  Published: December 3, 2012
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HARTFORD, Conn. (AP) — A broad effort by Gov. Dannel P. Malloy to reshape energy policy in Connecticut with incentives to boost efficiency and keep down costs has drawn strong opposition from the home heating oil industry, which accuses the state of encouraging residential and business customers to dump local oil suppliers in favor of increasingly popular natural gas.

It's shaping up as a David-and-Goliath struggle between family-run home heating oil companies stung by skyrocketing oil prices, and the state and its regulated gas utility monopolies.

"They're using state resources to eliminate jobs, delivery drivers, customer service representatives," said Stephen G. Rosentel, president of Leahy's Fuels Inc., a family-owned home heating business that has operated in Danbury since 1917. "These are real jobs and real people, and they matter."

Malloy administration officials disagree with Rosentel's comments, saying the governor's plan would create 10,000 jobs through the extension of gas lines and other projects and lead to significant savings for consumers.

"This is by no means forcing anyone to covert (to natural gas) by any stretch of the imagination," Malloy spokesman Andrew Doba said Monday.

Malloy's proposal recommends policy changes in energy efficiency, electricity supply, industrial energy needs, transportation and natural gas. He's promoting his plan as a way to spur economic development, business growth and lower costs in a state where homeowners and businesses have long complained that high energy costs are choking off other economic activities.

But the natural gas component instantly stirred opposition to the proposal giving incentives to homeowners and businesses to convert from oil to natural gas.

Thirty-one percent of Connecticut homes heat with gas, compared with 47 percent in Massachusetts and 48 percent in Rhode Island, the state says. And the percentage of commercial and industrial businesses with access to gas is only slightly higher, state officials say.

Malloy proposes to make gas available to as many as 300,000 Connecticut homes and businesses by asking state regulators to allow utilities to collect customer payments — extended over longer periods of time — to finance conversions to natural gas. The plan also would promote construction of 900 miles of gas mains with a focus on connecting factories, hospitals, schools and other big energy users.

The governor's plan calls for privately obtained capital, utility financing and bonds to pay for conversion. It also proposes an economic development fund to support fuel-switching for commercial and industrial customers to support a "growth agenda."

Jessie Stratton, director of policy for the state Department of Energy and Environmental Policy, did not entirely rule out public financing, saying that "taxpayer involvement is probably unlikely."