CT leadership must deal with the “death spiral” of the gas system

Connecticut faces some of the highest electricity prices in the country, and these problems need to be addressed urgently. Yet the state's discussion on how to combat rising energy costs for homes and businesses has been incomplete, focusing on only one half of the equation.

The gas supply sector and the looming crisis of affordable heat remained completely undiscussed.

Connecticut's natural gas pipelines are aging and leaking, and the cost of the gas they transport is subject to extreme price spikes. At the same time, households and businesses are turning away from using gas directly for cost, convenience, climate, health, or safety reasons. The state's natural gas utilities risk declining customer numbers and per-customer demand spread across the same—or rising—infrastructure costs. This deadly confluence of trends is bound to drive up gas bills. This process, dubbed the “gas utility death spiral,” will hit vulnerable populations (e.g., renters, low-income residents, retirees on fixed incomes) the hardest.

Customers who upgrade their homes with the most energy efficient insulation, plumbing, windows and doors, install powerful and efficient electrical appliances and distributed resources such as rooftop solar and home storage, and invest in energy management technologies such as smart thermostats combined with home appliances that maximize comfort and minimize costs can achieve an unprecedented level of control over their monthly utility bills.

For those who cannot afford to switch to a clean, affordable, all-electric home, early government action to contain long-term gas system costs is absolutely essential. That's why states across the country are increasing their oversight of for-profit gas utilities. These efforts include new gas infrastructure planning processes that align spending with the state's energy goals, utility “clean heat” plans to meet state emissions reduction goals, pilot projects to test new gas utility business models such as heat networks, and studies of financial and regulatory tools such as alternatives to pipelines and gas demand response programs. Each of these approaches will help Connecticut state leaders minimize costs and risks to customers during this period of rapid transition.

Other neighbors in the Northeast also rely on gas for heating and are already exploring better options. In late 2023, the Massachusetts Department of Public Utilities ordered gas utilities to review their policies and practices regarding new utility connections to determine whether new gas pipelines run counter to Massachusetts' political and economic interests. And earlier this summer, the New York Public Service Commission adopted rules for utility thermal energy networks to create a new market for alternatives to gas and began a process to create a framework for developing lower-cost, lower-risk non-pipeline alternative projects.

There are reasons to be hopeful. Connecticut state regulators have proven they can drive energy sector reforms and provide customer-focused support. The Public Utilities Regulatory Authority (PURA) has proven to be a strong ally of the state's consumers when it comes to improving the electricity system, seeking to reform the deep structural problems and financial incentives of utilities that are at the heart of the energy crisis while delivering cleaner, more reliable and stable electricity. The Connecticut Department of Energy and Environmental Protection is even leading an initiative to accelerate the adoption of affordable electric ground- and air-source heat pumps and heat pump water heaters through the New England Heat Pump Accelerator Coalition.

This collaborative work is preparing Connecticut for a brighter energy future. But it's not enough, because while progress on the electric side of our energy use is critical, the gas regime remains largely unchanged. That puts residents and businesses currently connected to gas in a precarious position. State lawmakers passed the Take Back Our Grid Act in 2023 to improve the performance of electric utilities and create a new framework for regulation through PURA. Adopting an equivalent strategy to assess Connecticut's gas sector would also be a useful step forward.

Connecticut is hurtling toward a metaphorical cliff. The sooner the state gets back on solid ground, the better off its residents, who are now mere trapped passengers, will be. It's important to emphasize that the status quo approach of business as usual is the worst and most expensive option.

If politicians and the governor are serious about reducing energy costs for citizens and businesses, they must address gas pipeline spending as directly as they address electricity costs.

Connecticut lawmakers don't have to have all the answers right now, but given the long-term impact of the decisions we make about our infrastructure, we need to start the discussion today, and we hope Connecticut lawmakers will take the lead.

CT leadership must deal with the “death spiral” of the gas system

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