The Connecticut Public Utilities Regulatory Authority on Wednesday ordered the “immediate winding down” of the state’s plan to bring new customers onto the natural gas system (21-08-24).
An investigation of the state’s gas system expansion plan (SEP) found that it “no longer furthers the state’s overall climate and energy goals” and its continuation “is no longer in the best interest of ratepayers,” the authority said.
As originally envisioned in 2013, the SEP’s purpose was to reduce energy bills amid high oil prices and help the state meet its greenhouse gas emissions reduction targets. Oil and gas prices, however, have equalized over the years, and the SEP’s projected 1.3% reduction in emissions “does not represent a significant factor toward achieving the Global Warming Solutions Act goals,” the order said.
Regulators also found that the state’s gas utilities have not met the customer conversion rates identified in the plan, making a ratepayer-subsidized program unjustified.
Chairman Marissa Gillett welcomed a Supreme Court appeal of the decision, should the gas utilities choose to file one, saying during PURA’s meeting that it would allow additional scrutiny of the companies’ conversion rates.
The SEP targeted bringing 280,000 Connecticut residents onto the gas system in 10 years, but the utilities have only met 32% of that goal, according to the order. Utilities adjusted their conversion projections down over the years, allowing them to report high conversion completions “while presumably masking the failure to achieve original projections,” the order said.
Intervenors in the SEP review proceedings asked PURA in February to consider opening a “future of gas” docket, but regulators determined that the state is already looking at the role of gas for its 2022 Comprehensive Energy Strategy. PURA added that it will consider opening a gas proceeding prior to the release of the strategy, if the right circumstances arise.
Under the order, the state’s gas utilities must stop enrolling new customers or extending SEP program incentives, unless customers have an existing contract. In addition, the companies must stop all program marketing.
In an April 6 written exception to PURA’s draft order on the SEP, Eversource Energy agreed that the “time is right” to wind down the program but asked for an equitable process that “respects the interests of customers who reasonably assumed that they had a longer time period to sign up for the SEP.” PURA did not grant Eversource’s request.
Penalty
PURA’s gas plan review sprang from a petition filed last summer by Attorney General William Tong calling for an investigation of Eversource marketing practices for SEP and “potentially deceptive marketing materials.”
After opening the investigation, PURA split the docket into two phases, allowing for one phase to look at Eversource’s marketing and a second to review all the gas companies’ SEP marketing and consider possible changes to the program.
PURA found that Eversource failed to include certain disclosures in its marketing materials and assessed a $1.8 million civil penalty.