Connecticut gas companies are gearing up for the state”™s new comprehensive energy strategy, which includes a major increase in natural gas usage in place of petroleum-based sources.
Within the next seven years, Gov. Dannel P. Malloy has said he wants to see an additional 300,000 customers using natural gas, touting it as a cheaper, cleaner and more reliable source of fuel for heat, power and perhaps transportation.
Now, utilities Yankee Gas and Southern Connecticut Gas are in the process of filing plans with the state Department of Energy and Environmental Protection (DEEP) for infrastructure changes that would be required before either could expand its natural gas customer base. Company representatives say they are excited by the opportunity to offer more customers gas, which is often a cheaper option.
According to the state”™s final energy strategy, published in February, about 217,000 customers already live on a gas main, but aren”™t using natural gas to heat their homes. Although natural gas is typically 50 percent to 75 percent cheaper than using oil to heat homes and other buildings, slightly more than a third of Connecticut residents have the natural gas option available to them, according to the report. For some, there isn”™t a gas main nearby. For others, the upfront cost to switch to gas is too high.
“It”™s all about choice and we believe this is a critical tool in providing residents and businesses a choice,” said Mitch Gross, a spokesman for Yankee Gas, which is a subsidiary of Northeast Utilities. “The challenge will be able to effectively execute all parts of the plan to meet the potential demand for customers.”
Gross said Yankee Gas is working with a long list of other gas companies, contractors, manufactures and town officials to put together a build-out plan, which he said should be presented to the Connecticut Public Utilities Regulatory Authority in June.
The approval process is expected to take about 30 to 40 days, but Gross said he was unsure when any resulting construction would begin.
To convert more customers to gas, part of the state”™s strategy calls for the construction of 900 miles of gas main extensions and the creation of financing options for homeowners and businesses that would cut down on the upfront costs of furnaces, boilers and other appliances.
For home and business owners the initial cost to replace heating equipment is typically $7,500 and $20,300, respectively, while annual savings are about $1,800 for homeowners and $3,300 for commercial businesses, according to the state”™s energy strategy.
Over time, the savings would pay for the upgrades but officials say state-financing programs, like a 10-year loan, could ease the burden on consumers. With additional customers for the gas companies, the cost to provide gas would also become cheaper.
“Right now there are folks that just don”™t have a choice and were trying to help change that,” said Michael West, Southern Connecticut Gas spokesman.
Neither of the representatives from Yankee or Southern Connecticut Gas predicted how much more revenue the natural gas expansion could bring their respective companies or how many employees they anticipated hiring to help manage the expansion.
According to state estimates, the new gas line extensions could result in as many as 7,000 new construction jobs. At $190 per foot, the extensions are estimated at about $900 million, which would be paid for by the gas companies.
As officials plan for increased natural gas use, the final issue comes down to whether there is enough gas in the state”™s pipelines. The state”™s environmental regulators acknowledge there are significant environmental and public health issues with drilling and the transportation of natural gas, saying that DEEP will actively address issues wherever possible.
At current rates however, DEEP officials say Connecticut”™s natural gas is already constrained and that there isn”™t enough interstate pipeline, storage, or peaking capacity to serve additional customers.
Spectra Energy, which supplies about half of the state”™s gas through its Algonquin transmission line, says it sees considerable expansion opportunities. Currently it is reviewing possible pipeline projects, which could increase the state”™s supply of natural gas, according to the state”™s comprehensive energy report.
Shelton-based Iroquois Gas Transmission System L.P., a partnership of five U.S. and Canadian energy firms, operates a 416-mile natural gas pipeline that runs from the U.S.-Canadian border at Waddington, N.Y., through western Connecticut and Fairfield County and into Long Island and New York City.
Iroquois currently doesn”™t have new construction plans but has previously said it could increase its compression abilities.
“All of the interstate pipelines are working very closely with the utilities as they plan how to best implement these strategies,” said Scott Rupff, Iroquois vice president of marketing and development.
As demand for gas builds, Rupff said the company was excited to see what further opportunities might exist for the company.
Yankee gas wants to charge me 13,000.00 to bring it the main ext across the street. Which is outrages. I hope they make the companies expand there lines. I get letters from the gas company to switch over to natural gas. I call them ask them if they are expanding the line and they say know. Then how come you sent me a letter and to call you. Well there is a main across your street but 13,000 to come across the street. They are making money over and over