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November 19, 2021

The price of energy is going up in CT. Could it have been avoided?

Photo | Contributed A domestic digital electricity meter.

You can pretty much count on it – energy is going to cost more this winter. A lot more.

The U.S. Energy Information Administration – keeper of all energy data – has warned about it nearly every day for weeks: “EIA forecasts higher U.S. heating bills this winter;” “EIA forecasts U.S. winter natural gas bills will be 30% higher than last winter;” “U.S. consumers expected to spend more for heating oil this upcoming winter.” And that’s just a few of its headlines.

Natural gas is at prices not seen since the winter of 2007-2008. Oil, which hit rock-bottom prices at the height of pandemic shut-downs, was at its highest since 2014 by early November and seemed aimed at the $100/barrel level again. The reasons are varied and include pandemic resets, international cartel pricing and low U.S. stockpiles due to natural gas exports, among others.

A spokesman for the independent system operator of New England’s electric grid said ISO-NE is still finalizing its winter outlook but added: “We do expect that prices will increase this winter relative to recent years, given what we’re seeing globally in terms of fuel prices. The extent of these increases is hard to predict and will depend on a number of factors, including consumer demand and weather.”

Connecticut consumers will feel these prices directly. Unlike the rates the Public Utilities Regulatory Authority must approve for delivery and transmission by the utilities, these are actual fuel costs that the utilities simply pass along on behalf of the supplier. That includes natural gas, oil and residential propane used for heat. Electricity that runs off any of them will also cost more. And so will gasoline for the car.

“We’ve been briefing to the governor, we’ve been coordinating with other agencies, and also with other states, to make sure that we’re identifying every strategy that we have available to us to help support families who are going to be impacted by these global price swings for energy commodities,” said Katie Dykes, commissioner of the Department of Energy and Environmental Protection. “We’re taking it very seriously.”

And the state has indeed unveiled a host of options for getting help with utility bills this winter – especially for low income residents.

But some of this was avoidable. That reality is highlighting what many feel is the inadequacy of nearly 10 years of programs that should have helped residents – especially low-income ones – insulate themselves literally and figuratively from spikes in energy costs.

Changes are in the works – but they won’t be in time for this winter.

Readdressing an old policy

Fingers are pointing to policy set in 2012 when Connecticut’s first Comprehensive Energy Strategy was unveiled. Its backbone was to expand the use of natural gas – then historically cheap and plentiful due to fracking. From climate change and emissions perspectives, it was also cleaner than oil – then the heating fuel of choice and also widely used in power plants in the region.

Brenda Watson, now the executive director of Operation Fuel, which helps low-income people pay energy bills, recalled multiple weather emergencies at the time that caused them to go through $1 million of fuel assistance in six weeks.

“We were sitting around the table – how can we help people?” she said. “We weren’t against [the idea of opting for gas expansion]. We weren’t attuned to the environmental impact at the time. Now I know better.”

The CES had also called for using weatherization, energy efficiency, equipment upgrades and renewable energy. All could have helped lower energy costs and all have fallen short of expectations for lower-income people.

“It’s not working for the people that we serve,” said Watson, who also heads up the Low Income Energy Advisory Board and serves on the Energy Efficiency Board and the Green Bank board.

There are several reasons: Nearly one-third of those eligible for weatherization can’t get it. Solar installations that would have helped low-income people, including renters, get away from fossil fuel use almost entirely barely exist. And programs to help people get more efficient energy equipment continue to focus on those run by natural gas.

The 2012 plan had also called for converting nearly 330,000 homes to natural gas in 10 years. Ironically, it too has fallen short. As of mid-2021, there were just about 92,500.

“We’re coming up on a quiet 10th birthday,” said Dykes, who was hired as deputy energy commissioner in time to put the finishing touches on that first CES. She noted there was a lot of interest at the time, given the difference in price between oil and natural gas.

But there were a lot of people who thought it was a bad idea – including an unlikely alliance of the state’s environmental community and the fuel oil industry.

Environmental folks argued that gas was still a fossil fuel. They were skeptical of the state’s contention that it would be a bridge fuel between oil and carbon free sources. They worried that the state would stick with its sizable investment in gas infrastructure for a generation or more, leaving Connecticut moored to climate change-contributing pollutants.

The oil folks saw their livelihoods on the line, predicated on a price differential they felt was temporary at best.

“Probably the only thing that can be said in the energy business is that nothing lasts for very long,” Gene Guilford, the head of the Independent Connecticut Petroleum Association (now the Connecticut Energy Marketers Association), said to The Mirror at the time. “Oil has been less expensive than natural gas for 18 of the last 20 years. What’s going to happen over the next 20? If someone purports to know, ask him for the lottery numbers, too.”

Charles Rothenberger, now a climate and energy attorney with Save the Sound, raised similar concerns about the gas component. “Five years ago, was anybody predicting natural gas prices are as low as they are?” he asked rhetorically at the time. “It’s very difficult to predict where natural gas prices will be in five years, never mind 30 years.”

The current situation, he said, was predictable. “Record low prices – the only place to go is up,” he said recently. “I don’t think that required much of a crystal ball.”

The challenge of getting homes weatherized

Energy efficiency has long been the mantra as the first step in keeping energy costs down. Home weatherization – plugging the leaks, holes and getting insulation into the state’s notoriously old housing stock – has been a goal for years. But there’s a catch.

To use some of the funds available for weatherization, owners must have an energy audit first – known as a Home Energy Solutions or HES audit. If that audit finds things like asbestos, mold, old knob-and-tube wiring or some other health or safety barrier, as they are known, they have to be fixed first.

For many lower income residents in Connecticut, that’s been a show-stopper.

People doing HES audits and especially those doing the audits for “income-eligible” households – HES-IE – have said for years what DEEP owned up to in its Equitable Energy Efficiency Phase 1 Goals and Actions report this summer:

“Between 2017-2019, 9% of HES participants and 23 percent of HES-IE participants had a health and safety hazard, such as mold, asbestos, pests, or structural issues that prevented weatherization. Low- and moderate-income communities are disproportionately barred from accessing weatherization programs, as health and safety hazards tend to be more prevalent in low-income housing.”

Advocates were documenting this weatherization gap long before 2017. They argue that many, if not most, of those with barriers have been unable to do remediation because of its cost or because they just couldn’t figure out how to go about it.

In rental buildings, where it’s a landlord’s responsibility, many won’t even allow HES audits, fearing that code violations may be found. There is also the fear that if health and safety problems are found, they’ll be too expensive to fix and tenants may take action against them.

And health and safety problems can be very expensive to fix. Leticia Colon de Mejias, whose company Energy Efficiencies Solutions is among only about a dozen that will do HES-IE audits, said there are often multiple hazards in low income housing that can run into the tens of thousands of dollars.

“You have to address the barrier and the source,” she said. “So for example, if it’s mold in an attic, we have to be sure — where’s the mold coming from? Because if we take the mold out, but we haven’t resolved, say, the leaky roof or the non-vented fan in the bathroom that’s getting into the attic causing the mold, then we are just going to have mold again.”

Many say that the biggest problem has been that the various services related to fixing problems like these are strewn across several state agencies with no umbrella or clearing house.

“It’s time consuming,” Watson said. “People struggling don’t have time.”

She said back in 2012 there was no focus on energy affordability or barriers in homes. Nor was there a holistic approach that included consideration of impacts on health and other vulnerabilities.

“When you have the fundamentals of value systems rooted in harm reduction and you’re centering your most vulnerable customers, figuring out how to serve them first, you get a program that works for everybody,” she said. “Those who are struggling are closest to the problem, so they’re closest to the solution.”

Siloed programs

Energy and low-income community advocates say Connecticut, compared with its neighboring states, has lagged dramatically in accessing available funds for remediation so weatherization can be done. And they say the state has been particularly disorganized with programs disjointed and disconnected – silos is the word used frequently – in its approach to dealing with the barrier problem. That makes repairs that much harder for the people who need the most help – generally those with lower incomes.

Neighborhood Housing Services of New Haven has been doing gut rehabilitations of dilapidated houses locally for 42 years. The work typically goes beyond code and includes energy efficiency measures. The homes are then sold to first-time homebuyers, said Kathy Fay, the organization’s director of community sustainability.

She said people were getting energy audits but not doing anything if there were barriers to weatherization. So 18 months ago, her department broke off to form a new operation – “I Heart My Home CT.” It essentially operates as a traffic cop to connect people with the resources to fix their problems, without having to work through the bureaucratic thicket on their own.

“Sometimes a resident might feel some discomfort or shame to have this bad thing – a health and safety barrier,” Fay said. “And they could feel an inability to move forward.”

Energy and environmental justice advocates most often point to the Low Income Heating Energy Assistance Program – LIHEAP – federal money that’s generally used to help pay heating bills as at least a partial remedy for health and safety barrier remediation. Up to 15% of it can be used for weatherization and about half of that can go to health and safety barrier remediation – both of which could have helped lower the bills that need to be paid.

While most of its neighbors have used the full 15% for weatherization, Connecticut is the laggard in the Northeast, using only 2%. So a problem that could have been worked on for nearly 10 years, and that might have prevented the energy sticker shock that is likely this winter, wasn’t.

“Of course it was preventable,” said Colon de Mejias.

Help is on the way, but not in time for this winter. Several new endeavors designed to deal with barrier remediation, weatherization and funding are coalescing right now. One is the Energy Efficiency Retrofit Grant Program For Affordable Housing – Public Act 21-48 – passed in the session earlier this year. It requires DEEP to establish a program to do exactly what its name says. Moreover, it has a coordination requirement designed to at least minimize the decentralized and uncoordinated systems that now exist across multiple departments.

DEEP is starting to look for people to run the program including someone specifically to administer the health and safety barrier remediation portion, according to Deputy Commissioner Vicki Hackett. While she says the program is operating, the hiring process is behind schedule, and to make matters worse, DEEP’s energy bureau chief, Michael Li, left in September, two years after coming to DEEP. He’s among many employees DEEP has lost recently, mostly due to retirements.

The legislature also approved two $7 million pots of money from the American Rescue Plan Act (ARPA), which provides federal money to states to help in pandemic recovery. Connecticut received about $6 billion total.

One $7 million chunk will go to address health and safety barriers to weatherization over three years. It will be paired with a one-year allocation of $2 million in LIHEAP funds. The other $7 million will go to affordable housing energy retrofits, which can be anything from upgrading electrical systems, more efficient energy options and even solar installations.

The LIHEAP funds, while the more reliable funding source of the two, is still just a fraction of what the state could be spending from the LIHEAP pool. In fiscal years 2019 and 2020, the state got $82 million for LIHEAP each year. In 2021 it was $83 million, and for the current 2022 fiscal year, it is $135 million. Two million is less than 1.5% of that.

It’s not that these programs didn’t exist up until now; it’s more that they’ve been uncoordinated with far less funding available, which made it difficult if not impossible for many lower-income people to navigate.

It took the pandemic to shake loose some of this funding and recognition of what needed to be prioritized, said Amy McLean, Connecticut director for Acadia Center. “The pandemic exposed the inequities that exist for the most vulnerable residents in Connecticut and the inability of the departments to work together to comprehensively solve housing issues that will benefit residents and reduce the health impacts,” she said. “No one could ignore it.”

Theoretically, the new program will knit together all the scattered pieces related to getting weatherization and barrier remediation done and paid for.

“Now is the time to really start putting those programs together and making sure that we’re taking an approach that’s more holistic,” Hackett said. “And that’s what we’re doing.”

But the ramp-up may hit a roadblock, Colon de Mejias said: “There’s no one to do the work.”

There was a huge backlog for audits even before the pandemic and companies lost employees, some of whom have chosen not to return. And who knows how many of those backlogged homes will need health and safety remediation before they can get the weatherization that might have saved them money this winter?

“I have 200 people waiting in the queue,” Colon de Mejias said.

Solar and multi-family units

The surest-fire way to limit exposure to fossil fuel price spikes like the ones gathering now is to use energy systems that don’t use any fossil fuels. The most obvious and ubiquitous in the U.S. today is rooftop solar – something Connecticut embraced strongly in 2012 when the then year-old Green Bank began a new robust program.

Since then, the residential solar program has totaled more than 46,250 installations — 4,202 installations are in low-income residences, 6,336 in moderate-income ones, and 35,713 in all higher income brackets.

The Green Bank’s president, Bryan Garcia, had pushed to get low-income households involved, but the program was only for homeowners classified as owner-occupied 1-4 unit households. Only a tiny number of low income people fell into that category. As small as the numbers were, it turned out that Black and Hispanic owner, along with those in a group that listed no majority race, were getting solar electric systems in percentages greater than their overall percentage of households, while whites were below their share of the potential market.

Multi-family housing larger than four units has been forced to compete in a commercial solar program, where more often than not they were at a disadvantage against other better-financed operations. That is changing. A last-minute addition to the same law setting up the new energy efficiency retrofit program allows multi-family units to participate in residential solar programs.

But it’s of no use for this winter.

“Things need policy. You can’t just hope things get done. These are hard markets, and when you have hard markets, private investment shies away,” Garcia said. “The policy is now there, so now we need to make it happen.”

But there was another way to get solar to lower-income homes and renters – community solar, also known as shared solar. It’s a way to virtually buy into a solar project that’s elsewhere. It’s perfect for renters, lower-income people and anyone who can’t put solar on their own roof for any number of reasons.

Connecticut’s adoption and roll-out of community solar has been tortured. While many other states, including neighbors Massachusetts and New York, jumped into the concept, Connecticut chose to invent its own process rather than adopt existing ones.

Years later, the state still only has a pilot project, and only one participating project – in Bloomfield – is up and running. Two others, in Shelton and Thompson, have had to extend deadlines. Effectively that means there are caps on shared solar participation. Caps remain in place on a similar program for municipalities as well as on residential and commercial solar. Demand continues to outstrip availability, and those left out will be stuck with higher costs this winter.

“We’ve been timid, and now, here we are,” said Mike Trahan, executive director of the trade group Solar Connecticut, who said the state really hasn’t created any additional solar jobs in three years. “Had we not had the Green Bank, good God — where would we have been at the residential level?”

Had we gone bigger, he said, “certainly more people that pay electric bills would not be paying as much today.”

Among other concerns that will keep the state tethered to the ups and downs of fossil fuel prices are longstanding subsidies to replace natural gas equipment such as boilers with newer, more efficient versions. Some clean energy advocates would like to see those subsidies ended and the focus shifted more robustly to electric equipment such as heat pumps.

The Energy Efficiency Board recently voted to keep the natural gas subsidies in place, though the final word will come from Commissioner Dykes – who ironically helped design the policy that started the subsidies in the first place.

Asked whether now – 10 years out – she had any regrets about that, her response showed a bit of exasperation.

“We’re working really hard on a lot of fronts,” she said. “I’m really proud of our record.”

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