Governor Rell’s Proposed Energy Program

Even though Rell is ahead by a comfortable margin in the Governor’s race here in Connecticut, she seems to be seeking to deflect some potential criticism over how d*mn expensive energy is in Connecticut (even after seeing petrol prices drop 0.60�/gallon, it’s still expensive). From the Connecticut Post:

Targeted legislation includes extending sales-tax breaks for hybrid cars, eliminating so-called zoned pricing for gasoline that raises per-gallon prices in affluent areas and capping the state’s gross receipts tax on the sale of petroleum products, including heating oil and gas.[...]

Rell also proposes:

• Ending the commercial utility tax surcharge on state businesses.
• Requiring that 10 percent of the state’s vehicle fleet use biofuels by 2012.
• Providing sales tax exemptions for people who buy energy-saving air conditioners.

[...]

New Haven Mayor John DeStefano Jr., the Democratic gubernatorial nominee, said Monday that Rell’s energy plan would support big energy companies and raise consumer rates by 25 percent to 50 percent.[...]

DeStefano’s energy plan would tax electric generators on windfall profits and in turn give $300 million in energy rebates to Connecticut ratepayers.

On the Rell proposal, while the idea of ending zone pricing in Connecticut (the reason that gas is so much more expensive in Greenwich and the Farmington Valley than it is in the Quiet Corner or along the Berlin Turnpike), somehow I suspect that the net effect is that more people will pay more for their petrol. While proposals that increase the cost of petrol as an incentive to discourage driving intrigue me, I doubt the median price bump as a result of smoothing prices from ending zone pricing would serve as a deterrent. Bottom line, more people paying more for their gas.

The tax breaks are attractive ideas, but I worry about cutting taxes in a state where municipal and state leaders are not shy about spending taxpayers’ money.

On the DeStefano proposal — I wish there were a few details provided about how he arrives at the 25-50% increase figure. And, while a windfall profits tax is another politically attractive idea, I’m not sure it’s wise to discourage supply of energy to the state when part of the reason for price pressures is that supply is already limited.

There are a few things I wish were included in the plans, including:

• Reconfiguration of the state’s fuel taxes to provide an incentive for suppliers to provide biofuels and clean diesel, and for consumers to shift to those fuels
   
• Enhancement of tax incentives for property owners to install solar panels (I don’t see Nutmegger NIMBY’s going for wind turbines, however) and engage in net-metering
   
• Requirements for new development above a certain size to incorporate renewable energy (e.g. solar power) and or green/conservation features (e.g. new homes be Energy Star-compliant)
   
• There has been periodic discussion about e-tolling I-95 as a means to raise state transportation funds and to discourage congestion on I-95. Interesting idea, but it will never happen due to public opinion. Even more interesting, but less likely to happen, would be simulatenously e-tolling I-95, I-91, I-84, and the Merritt/Cross Parkways and beefing up rail transportation in the state.
   
  You’d have to include the Merritt and I-84 in any plans to toll I-95, because those highways already have congestion issues of their own and couldn’t handle the volume of traffic that would potentially shift from I-95 to avoid tolls. And, you’d need to beef up transit, particularly rail, to provide a viable alternative for commuters.
   
  However, I’ll concede that such an idea would be so incredibly unpopular that no politician will seriously support it.