Connecticut energy suppliers and their customers have more in common than one might think. Rather than being in opposition to each other, they can actually both help each other achieve their goals, primarily through the lens of sustainability.
From the perspective of Connecticut energy suppliers, they of course want to sell energy and make a profit, and to be able to do so, they need to comply with regulation. In Connecticut, that includes requiring electricity providers to obtain or generate 22.5% of their energy sold from renewable sources, and this will rise to 27% by 2020.
At the same time, Connecticut has a deregulated energy market in the sense that consumers can choose their provider. As a result, 85,000 businesses have chosen their own Connecticut energy supplier since deregulation began in 2000, according to Choose Energy.
That means that Connecticut energy suppliers that can help organizations in terms of affordability and/or sustainability can win their business, while these customers can help their suppliers comply with energy generation regulation by creating more demand for renewables.
Improving the Economics of Renewables
Connecticut’s Renewable Portfolio Standard is the policy that requires electricity providers to use more renewable sources. The overall percentage of energy from renewables also has further specifications as to the amount that needs to come from different categories, ranging from solar to waste heat recovery.
As a result of this regulation, there’s an incentive for the development of renewable energy, including new technology behind it, since the market is literally required to grow.
In addition to selling this energy to consumers, Connecticut energy suppliers receive one renewable energy certificate (REC) for every megawatt hour of electricity they produce, and these RECs can be traded separately from selling energy itself. RECs further drive down the price of renewables, because if a consumer buys one separately or pays a premium for energy bundled with RECs, that subsidizes what it costs the electricity provider to generate the energy.
So Connecticut energy suppliers that identify businesses that want to purchase renewable energy can benefit both in terms of complying with regulation and potentially receiving additional revenue through the sale of RECs.
Why Businesses Should Support Renewables
Companies could have a variety of reasons for supporting renewable energy, ranging from investor requirements to customer demand. It can also be cheaper to do so, such as with the advent of energy storage through batteries that can reduce instances of grid overload that drive up prices.
In many cases, even if the kilowatt hour price of renewable energy is more expensive, it’s more affordable in the long run to act sustainably, such as if it improves employee retention.
And as companies help Connecticut energy suppliers generate more energy from renewables, such as by using distributed generation assets owned by the utility, both sides gain additional reliability in the event of grid outages from disasters like Hurricane Sandy.
So by more closely analyzing energy management, businesses can find ways to use energy to their advantage, rather than just treating it as a commodity.
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