Inexpensive shale gas has lit a fire under Connecticut gas distribution utilities Yankee Gas, Connecticut Natural Gas (CNG) and Southern Connecticut Gas (SCG), which have just filed a joint gas expansion plan with the state’s Public Utilities Regulatory Authority and the Department of Energy and Environmental Protection (DEEP).
The plan outlines how the utilities will will meet the gas expansion goals proposed in the governor’s Comprehensive Energy Strategy (CES) and the state’s recently enacted HB 6360 (see Daily GPI, March 12).
“Gov. Malloy and DEEP have developed an energy framework that will create broad energy opportunities in the state,” said Yankee Gas COO Rod Powell. “Expanding access to cheap, domestic natural gas will lead to dramatic reductions in greenhouse gas emissions and significant savings on the average family’s home heating bills. It will also give residents more choice and stimulate the state and local economies.”
Bob Allessio, CEO of CNG and SCG, said the utilities have been receiving requests from residents wanting to convert to natural gas in order to save money on energy costs. “…[W]e are one step closer to realizing a significant economic development opportunity for our state and providing substantial savings to our customers,” he said of action to advance natural gas use in the state.
The plan submitted by the utilities outlines a “structured approach” to add 280,000 new gas heating customers over the next 10 years. It includes a set of recommendations designed to help meet the new customer goal, including:
Yankee Gas COO Rod Powell told NGI that adding 280,000 customers over the 10-year period would increase throughput on the three LDC systems by about 48%; on the Yankee Gas system the throughput increase would be about 58%.
Prospective customers that are within 150 feet of the LDC’s pipeline can be connected to gas service at no charge, Powell said. The utilities and regulators will be hammering out a mechanism to spread the costs of connecting customers that are not near the LDC’s pipe. For instance, he said, aggregating the load and costs of multiple customer connections could reduce individual end-users’ costs of connecting to the gas system.
As for conversion expenses behind the utility meter, Powell said it costs about $7,500 for a customer to convert appliances from heating oil to natural gas. Energy efficiency and other incentives available at the state and federal level can reduce this cost to the consumer, he said. “We’re trying to put all of that together and ultimately reduce the cost to the end-user.”
On the other side of the LDC at the citygate, Powell said the additional 280,000-customer load will necessitate more upstream pipeline capacity to service the region beyond what would have been needed due to organic demand growth. This could come from capacity currently being offered by Algonquin Gas Transmission and/or Tennessee Gas Transmission, he said.
“This is triggered by our projected demand increase as a result of the comprehensive energy strategy, but we would need some smaller additional capacity [anyway],” Powell said. “Quite frankly, we’re seeing some new loads coming onto the system just because of customer demand in general.”
The utilities are increasing their education and outreach efforts to ensure that residents understand the opportunity gas offers, they said. The companies recently launched “Get Connected,” a program to help customers better understand the process of converting to natural gas.
“Over the last 20 years, Connecticut has struggled to attract new business investment and grow jobs,” said Rob Santy, CEO of Connecticut Economic Resource Center Inc. “Not surprisingly, costs of doing business, including most notably utility and workforce costs, are most often cited as reasons that businesses don’t seriously consider Connecticut. As a state, we need to do whatever we can to improve our competitiveness if we are going to attract new investment and create more jobs. Increased use of natural gas can do just that, a ‘win-win’ that doesn’t occur often.”
Bill Brennan, first selectman for the town of Wilton, CT, said the plan will allow the town to quickly convert its schools and business district to natural gas use. “Once we are connected, we estimate the town will save more than $400,000 a year on energy costs,” he said.
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