Energy Costs to Rise with New Connecticut Carbon Tax Under Consideration
Bill Establishes Carbon Price for Fossil Fuels Sold in Connecticut
The Connecticut General Assembly's Environment Committee has raised a bill that, if passed, will significantly increase heating oil, electricity, propane and natural gas prices for residential and commercial use. This new bill establishes a $15 fee per ton of carbon dioxide emitted when burning fossil fuels (gasoline, diesel, heating oil, natural gas, propane, etc.) beginning January 1, 2019, with increases of at least $5 per ton every year.
How Much More for Connecticut Consumers?
A carbon tax on fossil fuels would impact every person and business in the state. Below is an estimate of what the tax would cost on a “cents-per-gallon” basis in 2019 based on a US ton:
- Heating Oil - 16.55 cpg
- Gasoline - 13.27 cpg
- Propane - 9.55 cpg
A 16.55 cents/gallon tax on home heating oil would cost the average homeowner in our state $166 in the first year of the tax. And that $166 is for the first year only … since the tax escalates in perpetuity, so too would fuel costs.
The legislation does not indicate if the $15 per ton fee is in U.S. tons or metric tons, so these number are subject to change. However, this example will give you a general idea of how much more fuel will cost if and when this bill passes into law.
The funds collected from this fee are projected to be dispersed as follows:
- 40% will be used to provide direct dividends to residents in the state.
- 30% will be used to provide direct dividends to employers in the state.
- 25% will go toward climate resilience, energy efficiency, energy conservation and renewable energy programs that benefit low-income residential properties and small business properties. These properties typically have a low level of participation in energy efficiency and renewable energy programs.
- 5% will be used to pay for administrative costs associated with collecting the fee.
The carbon tax means residents of Connecticut will pay more for heating oil, natural gas, electricity (which is generated using fossil fuels), gasoline and other energy commodities.
For more information or to voice your opinion, please contact your local representative.