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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"Barring some public subsidy, which I think is fairly unlikely, there is no state subsidy on this," she said.

Stratton, a former state legislator, said Connecticut has promoted a "significant amount of public subsidies" for oil with incentives to promote efficiency in buildings heated by oil and tapping into a fund financed by electric and natural gas ratepayers.

Chris Herb, vice president of the Independent Connecticut Petroleum Association, said the group is "absolutely opposed" to any state incentives to convert to natural gas.

"We're not afraid of competition. We're not afraid of consumers making choices," he said. "We believe natural gas utilities have the financial means to extend their lines."

But Doba said the governor's proposal is being supported by labor unions and the Connecticut Business & Industry Association, the largest business representation group in the state.

Michael West, a spokesman for United Illuminating, the New Haven-based utility that shares its parent holding company with Connecticut Natural Gas and the Southern Connecticut Gas Co., said increased demand for natural gas is due to rising interest from customers who "call us constantly."

The gas companies have made a commitment to increase the number of customers by about 10 percent over three years, beginning in 2011, from its current number of about 345,000, he said.

Mitch Gross, a spokesman for Yankee Gas, a subsidiary of Northeast Utilities, said the Connecticut company has been adding between 3,000 and 4,000 customers a year since 2007.

"The phones remain very busy," he said.

Rosentel questioned why the state needs to provide incentives if oil companies are losing customers to natural gas and propane.

"That's happening without a state subsidy," he said. "It begs the question, 'Why is the state subsidizing?'"

And Herb questioned the state's economic development assumptions that converting to natural gas would pump $250 million into the state's economy each year by cutting homeowners' heating bills and another $215 million a year in business production cost savings.

"Economic development has nothing to do with energy prices and everything to do with our tax policies and cost of labor," Herb said.

Stratton, however, said state officials are motivated simply by the lower cost of natural gas.

"It's all driven by cost factors," she said. "It's not that we like one better than the other."

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