Residents shocked by cost of energy

Analysis says state is the most expensive in nation

When it comes to overall energy costs, Connecticut is the most expensive state in the nation for consumers, according to a new analysis released Wednesday.

The analysis by WalletHub, a Washington, D.C.-based personal finance website, found that Connecticut residents are paying an average of $380 per month in energy costs. The analysis used a special formula to account for the following residential energy types: electricity, natural gas, motor fuel and home heating oil.

Connecticut residents are paying an average of $48 per month more than consumers in the second-most expensive state, Alaska. Residents in Washington state, the least expensive state in terms of overall energy costs, pay an average of $154 per month less than their counterparts in Connecticut.

Of the four categories analyzed, Connecticut’s most expensive energy source is electricity; the average resident pays $166 per month, second only to Hawaii. Connecticut was ranked second in average heating oil expenses at $76 per month.

The state’s consumers have the nation’s secondhighest average home heating oil consumption rate.

The average monthly natural gas bill for Connecticut residents is $39, and the state is ranked 19th in average monthly natural gas costs. The WalletHub analysis ranked Connecticut 35th in monthly motor vehicle fuel costs, with the average consumer in the state paying $99 per month.

Why is energy in Connecticut so expensive? To some extent, it’s the result of geography.

“We’re at the end of the spigot,” said Joel Gordes, a West Hartford-based energy consultant, referring to Connecticut’s location vis-a-vis the location of the nation’s oil and natural gas fields.

David Spence, a professor of business, government and society at the University of Texas, said the natural gas pipelines that bring the fuel to Connecticut and the rest of New England have “a constraint” in the amount of natural gas they can deliver to the region during period of peak demand. That constraint drives up the cost of natural gas during peak usage periods.

“That also increases the price of electricity (generated) from natural gas at those times,” Spence said.

A large percentage of the power plants in New England that produce electricity run on natural gas. On Wednesday evening, for example, 64 percent of the power plants operating were powered by natural gas, according to regional power grid operator ISONew England.

Nuclear power accounted for 24 percent of the electricity generated in the region during the same time period.

Dennis Schain, a spokesman for the Connecticut Department of Energy and Environmental Protection, said the WalletHub findings hardly come as a surprise.

“When it comes to residential heating, Connecticut has been historically very reliant on heating oil,” Schain said. “More than 40 percent of homes in the state use heating oil — which is more expensive and burns dirtier than natural gas. We have been working with the gas utilities to have them expand service areas and offer more people the opportunity to choose natural gas for home heating.”

But increasing residential usage can come with its own set of problems, Gordes said.

Because of the constraints in the natural gas pipelines, increasing the number of residential natural gas customers means less capacity for power plants, he said. That’s because the fuel is delivered to residential natural gas customers on what are called “firm” delivery contracts, meaning they can not be interrupted. Power plants, on the other hand, typically operate on interruptible delivery, in part because it is cheaper than a firm contract.

Schain said the state is placing a high priority on improving energy efficiency in Connecticut.

“In past few years, funding for popular and cost-effective efficiency programs for homes and businesses has more than doubled,” he said.

“People are taking advantage of these programs to reduce energy use and therefore reduce their bills. People are getting home energy audits and taking follow-up action to save money on heating, lighting, cooling.”