Governor unveils his new energy policy for Conn.

STEPHEN SINGER, Associated Press

HARTFORD, Conn. -- Connecticut Gov. Dannel P. Malloy unveiled an energy policy on Friday that promotes increased use of natural gas and improved energy efficiency.

Malloy, who rolled out the new policy in a speech in Cromwell to Connecticut's largest business group, tied together the environment, energy and the economy. Policy makers can make Connecticut more competitive for business by cutting the cost of electricity for homes and businesses, he said.

"The most dramatic element of this strategy is the opportunity presented to us by the increased supply of low-cost domestic natural gas," the Democratic governor said at the Connecticut Business & Industry Association.

A key Republican, Rep. Laura Hoydick, said Malloy's administration briefed lawmakers a few weeks ago about its plan as it seeks bipartisan backing for the proposal. The legislature will have to approve elements of the plan when its 2013 session begins in January.

"Expansion of natural gas is very pragmatic," said Hoydick, the minority party's ranking member of the legislature's Energy and Technology Committee. "It's definitely a way for Connecticut residents and businesses to save some dollars."

But a petroleum trade group criticized the plan, advising Malloy to keep state functions separate from the energy industry.

"State government should stay out of the business of picking winners and losers in the energy markets because ... it has a poor track record of success and ... consumers in a free market make decisions about what they want to buy and from whom, and it is not government's role to take the place of consumers," the Independent Connecticut Petroleum Association said in an emailed statement.

The group represents 600 heating oil and propane retailers with 13,000 employees.

Malloy said as many as 7,000 construction jobs could be created by connecting homes and businesses with gas lines and extending gas mains to new loads "where it is most economical."

He also said that the practice of hydraulic fracturing, or fracking, which blasts millions of gallons of water and smaller amounts of sand and chemicals down well holes to force open new fissures, will not be done in Connecticut because the state has no natural gas deposits.

The practice has drawn criticism from many environmentalists over concerns that it pollutes groundwater.

Malloy said financial incentives and regulatory changes can help Connecticut reach a goal of providing access to gas to nearly 300,000 homes, businesses and other facilities.

Malloy's plan calls for options to finance the average residential cost of about $7,500 with repayment over 10 years using system of collections by gas companies and financed by banks and capital markets. The proposal also calls for alternative financing for low-income homeowners through community banks and credit unions and regulatory changes.

In 2011, the General Assembly passed legislation overhauling the state's energy policy following years of complaints from businesses and consumers about the high cost of electricity. The changes included merging the state Department of Environmental Protection and the Department of Public Utility Control to centralize state energy policy, focus on energy efficiency and reduce rates.