Hartford Business Journal

www.HartfordBusiness.com • July 16, 2018 • Hartford Business Journal 15 MEMBER FDIC EQUAL HOUSING LENDER Find your [ Done Deals ] place. liberty-bank.com $945,000 Acquisition financing for 18-unit multi-family property in Middletown, CT $2,752,000 SBA 504 loan for construction of a car wash in Cromwell, CT $1,000,000 Working Capital Line of Credit for a manufacturer of switches and sensors in Branford, CT $2,500,000 Working Capital Line of Credit for a software development company in Glastonbury, CT Quality Construction Builds Repeat Customers www.borghesibuilding.com © 2011 BlueScope Buildings North America, Inc. All rights reserved. Butler Manufacturing™ is a division of BlueScope Buildings North America, Inc. 2155 East Main Street • Torrington, Connecticut 06790 Mozzicato Retail, Rocky Hill, CT | 2014 | Renovation — 6,000 sq. ft. Mozzicato Bakery/Retail, Plainville, CT 2010 | 4,700 sq. ft. Farmington Bank, Plainville, CT 2010 | 2,700 sq. ft. Contact us at 860-482-7613 or visit us on the web. reduce air pollution. It also aimed to provide an eco- nomic stimulus by spurring natural gas pipeline construction and helping ratepayers save on their energy bills. But lower-than-expected oil prices have made conversions less attractive. When the expansion plan was being devised, lawmakers relied on a 2012 forecast by the U.S. Energy Information Administration (EIA), which predicted oil prices would rise to $3.73 per gallon by 2015. That never happened and oil prices have remained below $3 a gallon for most of the past two years. Residential-delivered heating oil even dipped below $2.40 per gallon during a 17-week stretch in 2015 and 2016, a threshold state officials previously said would make natural gas conversions cost prohibitive. The gas companies, particularly those owned by Orange-based energy pro- vider Avangrid, have frequently revised their an- nual conversion goals downward since the pro- gram began, and both Eversource and Avangrid did so again for 2018, regulatory filings show. Eversource's gas utility is now tar- geting 4,700 customer conversions this year, down from an original goal of 9,372, while Avangrid's two gas utilities have revised their combined goal of 20,100 conversions to 6,000, citing fuel prices and other factors. Dave Allain, Eversource's director of gas expansion, said initial con- version targets — which called for Eversource to add 82,400 natural gas customers over a decade — were "extremely aggressive." Pricing dynamics, however, could always change. Oil prices rose late last year, which has helped the utili- ties convert more customers. But regardless of how much, if any, money a conversion saves consumers, Allain says there are other reasons custom- ers want natural gas — it's convenient, cleaner, doesn't run out and can be used for stoves, grills and other house- hold appliances. He said Eversource has grown much more skillful marketing gas conver- sions, describing the effort as a "fine- tuned machine." He said he's confident he can exceed the 4,700 conver- sions Eversource forecasted this year, perhaps by 1,000. "We started this thing a little naive, we had a lot of growing pains, but I believe we're in a great position today," Allain said. "The results will show in 2018." Eversource has managed to stay closer than Avangrid to its original conversion goals over the past four years, regulatory filings show. Avangrid converted 40,194 custom- ers between 2014 and 2017, compared to an original goal of 71,300. Avangrid spokesman Ed Crowder said the com- pany's gas utilities remain committed to the expansion plan. "Initial goals set forth in the strat- egy were based on then-current mar- ket conditions, and we have updated these forecasts each year to account for changing fuel prices and other variables," Crowder said. "We have substantially met our revised goals despite a significant decrease in the cost of heating oil." Clean energy advocates push heat pumps While utilities are still gung-ho on natural gas conversions, Em- ily Lewis, policy analyst at the nonprofit Acadia Center, says Con- necticut should shift its incen- tives away from the heating fuel and toward heat pumps, which in colder months cap- ture outdoor heat energy and transfer it inside a home or building. Technological improvements in heat pumps have made them more efficient than natural gas heat in many instances, she said, as well as more effective in cold winters. And according to Acadia's projec- tions, Connecticut simply cannot meet its emissions-reduction targets over the next three decades without a big increase in the number of house- holds using heat pumps (it's about 2 percent or less currently, according to the state Department of Energy and Environmental Protection). Lewis says incentivizing natural gas conversions effectively guarantees greenhouse-gas emissions for the life of the new boilers and other equipment — often 15 years or more, whereas electricity generated in Connecticut is getting cleaner over time thanks to renewable energy like wind and solar. "I think Connecticut needs to eval- uate where it needs to go and why it's still incentivizing natural gas if it recognizes we need to move toward electrification," she said. Gov. Dannel P. Malloy, Eversource officials and others celebrate natural gas pipeline expansion work in Wilton. CT's emissions reduction mandates Year Required emissions reduction 2030 45% below 2001 levels 2050 80% below 2001 levels Source: Department of Energy and Environmental Protection

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