|Select Economic and Energy Data†||Value||State Rank|
|Real Gross Domestic Product, per capita||$50,758||2nd highest|
|Gasoline Price, per gallon||$2.91||10th highest|
|Electricity Price, per kWh||18.21¢||2nd highest|
Connecticut has some of the most expensive energy prices in the United States. Like most of the states in the Northeast, Connecticut’s electricity prices are among the highest in the country and are second only to Hawaii. More than half of the state’s electricity is produced from the state’s largest-capacity power plant, the 2 gigawatt Millstone Nuclear Power Station[i]. Natural gas provides over 30 percent of the state’s supply and coal contributes 8 percent.
Connecticut has no fossil fuel reserves. Natural gas for electricity production is primarily provided by pipelines from the Gulf Coast and Canada.
Regulatory Impediments to Affordable Energy
Although affordable energy is a vital component of a healthy economy, regulations frequently increase energy costs. Regulations imposed in the name of reducing carbon dioxide and greenhouse gas emissions are especially costly. Carbon dioxide is a natural byproduct of the combustion of all carbon-containing fuels, such as natural gas, petroleum, coal, wood, and other organic materials. Today, there is no cost-effective way to capture the carbon dioxide output of the combustion of these fuels, so any regulations that limit carbon dioxide emissions will either limit the use of natural gas, petroleum, and coal, or dramatically increase their prices.
Below are some facts about Connecticut’s regulatory environment that are likely to affect the cost of energy or the cost of using energy. One of the reasons Connecticut has the most expensive electricity in the continental United States is because of the regulations it has enacted.
- Connecticut caps greenhouse gas emissions. In 2008, Connecticut passed Public Act No. 08-98,[ii] which mandates greenhouse gas reductions of 10 percent below 1990 by 2020 and 80 percent below 2001 by 2050.
- Connecticut is a member of the Regional Greenhouse Gas Initiative (RGGI), a regional agreement among ten Northeast states to limit greenhouse gas emissions. This agreement requires states to cap carbon dioxide emissions from the electrical generation sector and to reduce those emissions by 10 percent by 2018 through a cap-and-trade scheme.
- Connecticut requires utilities to sell a certain percentage of electricity from renewable sources. The state’s renewable portfolio standard requires utilities to provide 27 percent of electricity generation from renewables by 2020.[iii] Connecticut’s renewable portfolio standard requires each electric supplier and each electric distribution company wholesale supplier to obtain at least 23 percent of its retail load from renewable energy by January 1, 2020 and it requires each electric supplier and each electric distribution company wholesale supplier to obtain at least 4 percent of its retail load by using combined heat and power systems and energy efficiency by 2010.[iv]
- Connecticut requires the use of reformulated gasoline blended with ethanol.[v]
- Connecticut imposes automobile fuel economy standards similar to California’s, which include attempts to regulate greenhouse gas emissions from vehicles. In May 2004, Connecticut passed the Clean Car Act, Public Act 08-98.[vi] This applies to 2008 models onward and adopts California’s vehicle emissions standards.
- Connecticut requires new residential and commercial buildings to meet energy efficiency standards. The state mandates the 2006 International Energy Conservation Code (IECC) for both residential and commercial buildings.[vii] The IECC, developed by the International Code Council, is a model code that mandates certain energy efficiency standards. New construction greater than $5 million and renovations greater than $2 million, except for residential buildings with less than five units, must meet the silver LEED standard or an equivalent standard.[viii] The silver LEED standard is one level of the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system. Public Act 09-192, enacted in 2009, mandates the incorporation of the 2012 IECC within 18 months of its publication.[ix] In addition, Public Act 06-187 requires state facilities to meet the silver LEED standard or an equivalent standard.[x] The minimum energy performance for state building projects must be 21 percent better than the Connecticut State Building Code or ASHRAE 90.1-2004, whichever is stricter.[xi] These regulations apply to new construction greater than $5 million and renovations greater than $2 million.
- Connecticut imposes state-based appliance efficiency standards. The state mandates efficiency standards for commercial refrigerators and freezers, bottle-type water dispensers, large packaged air conditioning equipment, commercial hot food holding cabinets, hot tubs, and swimming pool pumps.[xii] In addition, Public Act 07-242 established mandatory efficiency requirements for state-purchased residential furnaces and boilers. It also required state agencies to purchase equipment and appliances that at least meet federal Energy Star standards.[xiii]
- Connecticut allows utilities to “decouple” revenue from the sale of electricity and natural gas. Public Act 07-242[xiv] requires the Department of Public Utility Control to order electric and gas decoupling, but it is not currently in effect for any utility. Decoupling allows utilities to increase their revenue by selling less electricity and natural gas.
[i]Energy Information Administration, Millstone Nuclear Power Station, Connecticut, Sept. 10, 2009, http://www.eia.doe.gov/cneaf/nuclear/page/at_a_glance/reactors/millstone.html
† Data Sources: Real GDP per capita 2008: Bureau of Economic Analysis, News Release: GDP by State (June 2, 2009), http://www.bea.gov/newsreleases/regional/gdp_ state/gsp_newsrelease.htm; Unemployment: Bureau of Labor Statistics, Regional and State Employment and Unemployment–February 2010 (Mar. 10, 2010); Gasoline Prices: American Automobile Association, AAA Daily Fuel Gauge Report (Mar. 30, 2010); Electricity Prices: Energy Information Administration, Electric Power Monthly, Table 5.6.B., Average Retail Price of Electricity, (March 15, 2010), http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_b.html; Electricity Generation Data: Energy Information Administration, Electricity Generation 2009, http://www.eia.doe.gov/cneaf/electricity/epa/generation_state_mon.xls.
[ii] Public Act No. 08-98 (Conn. 2008), http://www.cga.ct.gov/2008/ACT/PA/2008PA-00098-R00HB-05600-PA.htm.
[iii] Connecticut Department of Public Utility Control, Connecticut Renewable Portfolio Standards Overview, http://www.ct.gov/dpuc/cwp/view.asp?a=3354&q=415186 (last visited Mar. 5, 2010).
[iv] Database of State Incentives for Renewables and Efficiency, Connecticut Incentives/Policies for Renewables & Efficiency, http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=CT04R&re=1&ee=1.
[v] Energy Information Administration, Connecticut, Apr. 1, 2010, http://tonto.eia.doe.gov/state/state_energy_profiles.cfm?sid=CT.
[vi] Public Act No. 08-98 (Conn. 2008), http://www.cga.ct.gov/2008/ACT/PA/2008PA-00098-R00HB-05600-PA.htm.
[vii] Office of State Building Inspector, State Building Code –2005 Connecticut Supplement, 2009 Amendment, http://www.ct.gov/dps/lib/dps/office_of_state_building_inspector_files/2009_amendment_final_ unformatted.pdf.
[viii] Office of the State Building Inspector, December 5, 2008, Memorandum,
[ix] Public Act No. 09-192 (Conn. 2009), http://bcap-energy.org/files/CT_PublicAct09-192_from-HB6284.pdf.
[x] Public Act No. 06-187 (Conn. 2006), http://www.cga.ct.gov/2006/ACT/PA/2006PA-00187-R00HB-05846-PA.htm.
[xi] State of Connecticut, The Establishment of High Performance Building Construction Standards for State-Funded Buildings, http://www.ct.gov/opm/lib/opm/pdpd_energy/regulation_bldg_stnds_final_1.5.09.pdf.
[xii] Database of State Incentives for Renewables and Efficiency, http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=CT09R&re=0&ee=1.
[xiii] Public Act No. 07-242 (Conn. 2007), http://www.cga.ct.gov/2007/ACT/PA/2007PA-00242-R00HB-07432-PA.htm.