The views stated here are those of the author and do not necessarily reflect those of the editors of this newspaper. We welcome supporting or opposing views on any published item. Received April 13, 2024.
The Office of Fiscal Analysis (OFA), the nonpartisan fiscal research and analysis arm of the Connecticut General Assembly, found that the “Green Monster” environmental omnibus bill would result “in a significant increase in cost to ratepayers.”
Ratepayers include state and local governments, as well as Connecticut businesses.
State Rep. Christine Palm (D-Chester) — the bill’s main architect — has called the legislation “full of incentives for businesses like rebates, tax cuts and waived fees.” Rep. Palm is correct, the climate change bill does provide some environmentally- friendly business incentives, rebates and even the possibility of waiving Department of Revenue Services (DRS) fees.
However, the OFA report indicates that ratepayers may find increased costs less than incentivizing, which are outlined in two sections of the report.
The first section requires state agencies to reduce Greenhouse Gas (GHG) emissions by 45% from 2001 levels by 2030, 75% from 2016 levels by 2040, and achieve net zero by 2050. OFA notes that these ambitious targets will incur costs for state agencies, though it did not specify the amount.
The other section sets statewide targets to reach a level of 65% GHG below 2001 levels by 2040 and to reach economy-wide net-zero by 2050. On this, the OFA found that the cost to achieve these goals “will be substantial, but it is unclear what that cost will be year to year or where that cost will be borne.”
Additionally, the “Green Monster” legislation requires the Department of Energy and Environmental Protection (DEEP) to hire a consultant in order to prepare a report on GHG emissions, which is projected to cost $600,000. This report’s aim is to outline strategies to meet GHG and/or sector-specific emission reduction targets, while evaluating the sufficiency of the state’s renewable portfolio standards, (which are requirements for electricity providers to get part of their power from renewable sources).
What the consultant’s report will not include is the potential cost impact on residents in the state, specifically those in lower- and middle-income households.
OFA did not provide any more details other than this bill will have ratepayers — who are already paying some of the highest electric rates in the country — seeing significant cost increases in their electric bills.
However, at a public hearing regarding the ban on selling new gas cars last August, Eversource pointed out that the electrical infrastructure, in its current state, could not handle the massive demand if the regulation passed. They estimated that approximately eight existing substations would need upgrades, and around fourteen new electrical substations would need to be constructed. Eversource projected these upgrades would require additional grid investments totaling between $1.5 billion and $2.4 billion.
Eversource also noted that during peak demand times, Connecticut relies on about 8,000 megawatts of electricity provided solely by them. Introducing more electric vehicles (EVs) on the roads through the proposed mandate would have increased the demand by an additional 4,000 megawatts.
While Eversource has provided cost estimates for upgrading the electrical grid to support an electrified transportation sector, it is important to note that these projections do not include other sectors like construction and agriculture. The financial implications of expanding electrification to include all sectors are undefined, suggesting potential additional costs that have not yet been quantified. This highlights the need for a more comprehensive analysis to fully understand the economic impact of broad electrification initiatives on Connecticut’s infrastructure and its ratepayers.
The bill cleared the Environment Committee on April 8, 2024, and is now pending further action. It is yet to be determined whether it will be scheduled for a vote in the House and Senate or referred to another committee for additional review.
Meghan Portfolio, Yankee Institute
