Hartford Business Journal

12 COnnECTiCUT GREEn GUiDE • SprinG 2015 www.CTGreenGuide.com Capacity Shrinking Natural Gas Competition By Lee D. Hoffman M ore than 10 years ago, Connecticut, like other states, embarked on opening up its natural gas markets to competition, in the hope of offering more contracting options. While residential consumers of natural gas must still buy their gas from a regulated utility such as Eversource, Connecticut Natural Gas, or Southern Connecticut Gas, industrial and commercial customers have the ability to purchase their natu- ral gas from a competitive supplier of their choosing, at least for the time being. According to the competitive suppliers, however, the window may be closing on Connecticut's competitive gas markets. Competitive natural gas supply works much the same as competitive electric supply in Connecticut. Essentially, a business owner selects the company that will sell it the natural gas, much as businesses and resi- dential consumers select what company will sell them their electricity. The regulated utilities charge a fee to transport that gas to the business, much as electric utilities charge to distribute the electricity to customers. With both electricity and natural gas, customers may choose to have both the supply and distribution pro- vided by the utilities. Because the utilities are heavily regulated, however, they are restricted as to how they can purchase such resources, and they may not always be able to get the best price for consumers. Allowing competitive suppliers allows for the potential of lower prices and more contracting options. Unlike the electricity market, however, the natural gas distribution system in Connecticut is currently constrained, meaning that during periods of heavy usage (such as cold winters), there is limited capacity available on the gas pipelines. The Public Utilities Regulatory Authority (PURA) addressed this issue 10 years ago when it provided a limit on pipeline capacity of 25 percent to the competitive sup- pliers, so that the utilities would have sufficient resources for reliability with the remaining 75 percent. Recently, the competitive suppliers alerted PURA that (Left) Crews from Yankee Gas install a pipe to serve the home heating distribution system. The gas for that system comes from the pipeline transporting it into Connecticut. (Right) The rise in the drilling of natural gas in America has decreased the cost of the commodity, but difficulty in transporting it to New England has kept the region from experiencing the full benefits. PHOTOS | HBJ FiLE

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