Heating Oil Dealers Condemn Regulators' Okay for Gas Plan

Nov 8, 2013

DEEP Commissioner Dan Esty and Governor Dannel Malloy.
Credit Chion Wolf / WNPR
An analog natural gas meter.
Credit David R. Tribble / Creative Commons

Heating oil dealers said a decision by regulators to allow a massive expansion of natural gas usage in Connecticut will cost thousands of jobs. The state’s Public Utility Regulatory Authority this week issued a draft decision giving the go-ahead to Governor Dannel Malloy’s proposal. 

The decision calls for spending $7 billion of state money to expand gas pipelines in Connecticut and convert customers to the fuel. The aim is to sign up 280,000 more gas customers over ten years.

That has enraged home heating oil dealers. Chris Herb of the Connecticut Energy Marketers Association said, “I am shocked that the state of Connecticut would buy into a plan to raise rates on businesses by 50 percent.”

The organization represents some 300 home heating oil dealers in the state. Rates are set to rise as a result of this plan. About a third of the cost will be borne by all rate payers, while the rest will be recovered from residents and businesses that sign up for service.

Herb said the state should stay out of the energy marketplace: “For the government to be putting a plan together that pushes consumers to one fuel, a utility-provided fuel, away from family-owned businesses is just wrong. They should not be in that business; they should be in the business of facilitating competition.” He said if the plan is successful, it could drive hundreds of his members out of business.

UPDATE: The Department of Energy and Environmental Protection responded to this story, saying that the expansion will be financed by natural gas utility companies, and does not involve any taxpayer money. In response to Chris Herb's claim that business rates would be raised 50 percent, DEEP spokesman Dennis Schain had this to say:

"New business customers... and new business customers only... would pay a surcharge for 10 years to help finance the expansion of the natural gas distribution network. That surcharge could be up to 50 percent of the distribution half of their bill. So the impact of the premium on the overall bill is only about half of the 50 percent... or 25 percent."

He continued, "The impact of the expansion plan on existing natural gas customers will be very minimal - anticipated to be less than a 2 percent effect on bills in the first four years of the plan."

DEEP said that the plan is intended to facilitate competition on a playing field previously tilted in favor of heating oil.