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April 28, 2022

PURA ends Malloy-era natural gas conversion incentive program

PHOTO | Contributed A work crew installs a natural gas pipeline.
By Andrew Larson

The Public Utilities Regulatory Authority is ending a program that provided incentives to consumers to connect their homes and businesses to natural gas after the initiative fell short of its goals.

PURA commissioners unanimously approved a final decision Wednesday to end the conversion program, implemented in February 2013 under Gov. Dannel Malloy. The decision gives the state’s three three natural gas utilities — Eversource, Southern Connecticut Gas and Connecticut Natural Gas — 90 days to wind down the program.

The Malloy administration promoted natural gas expansion as a benefit to ratepayers largely due to the low cost of the fuel source at the time. 

However, the growth rate of new customers has declined for all three distribution companies.The average cost to connect new services has increased significantly since 2013, according to PURA’s decision.

Further, PURA found that the environmental benefits of incentivizing gas conversions are limited.

The program aimed to convert 280,000 additional residents and businesses in Connecticut to natural gas over a 10-year period. However, with less than two years left, the companies have only met 32% of the original goal. 

Also, while the companies’ costs to serve new customers has doubled and tripled over five years, the number of new customers and services added annually has actually decreased, according to the decision.

“Accordingly, the [System Expansion Plan] is no longer in the best interest of ratepayers,” the decision says.

PURA found that:

  1. The benefits of conversions to natural gas do not outweigh the ratepayer impacts associated with the SEP; 
  2. The prices of natural gas and oil have consistently converged instead of diverging; 
  3. The conversion rates have decreased and never achieved the projected penetration levels or those required to justify a ratepayer-subsidized program;
  4. The SEP no longer furthers the state’s overall climate and energy goals. 

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