ENV Committee Hearing Transcript for 01/28/2005

REPRESENTATIVE ROY: Okay, so much for mike problems, I hope. Please turn off the cell phones so that our speakers are uninterrupted as they're testifying. And first, John Calandrelli.

Speakers are allowed three minutes to testify, and we do have a timer. And in the interest of letting everybody get a chance to speak, please keep your remarks short. Thank you.

JOHN CALANDRELLI: Thank you. Good morning, Senator Stillman and Representative Roy. Members of the Environment Committee, good morning.

My name is John Calandrelli. I'm here representing a little over 12,000 people from the Connecticut Sierra Club. And, of course, we are asking for an endorsement of the Connecticut Climate Change Action Plan.

In this time, as you know, of pretty great divisiveness in our country, the four public hearings that we've already had last year on this issue, we got 52 out of 55 recommendations unanimously supported. That's pretty impressive in this day and age.

We've heard some of the other pros and cons of this Action Plan, and it was pointed out that some places like New Delhi or Jakarta or somebody else's is contributing a lot to global warming gasses, and that's true, in some cases.

However, we can't do anything about them. But what we can do is do our share. We do contribute a lot because of our present lifestyle to greenhouse gasses.

This Plan has many recommendations that, some of them we've already started on. For instance, the Clean Cars Bill we passed last year, energy efficiency standards on appliances. All of this is part of the puzzle.

So we are asking the Environment Committee to endorse this Plan. And we also want to point out that Connecticut has always been a leader.

And if we want to continue to be a leader, you have to act like it. This Plan shows the rest of the country and the rest of the New England states that we are the leader we say we are and have been in the past.

So our members of the Sierra Club do wish to endorse this Climate Action Plan, to start working on it in earnest, for this Committee to pass this through.

And it comes down to more than immediate goals, like we can make new jobs in new industries, in cleaner industries. We can make better houses. We can make better cars. We already know how to do all that stuff.

But in addition to that, we're all old enough that I hope the voices of our grandchildren will not keep us awake at night, saying, why didn't you do what you knew you could do when we had the chance?

We have it now, so we are asking the Environment Committee to endorse the draft Climate Change Plan that was voted on last year. Any questions? I don't want to take up too much time.

REP. ROY: Any members of the Committee have questions? John, thank you very much.

JOHN CALANDRELLI: Thank you, Representative.

REP. ROY: Jim McNally.

JAMES MCNALLY, JR: Good morning, Chairpersons Stillman and Roy, and Members of the Committee. My name is Jim McNally. I am Director of Marketing and Sales for Connecticut Natural Gas and Southern Connecticut Gas.

And I want to thank you for this opportunity to provide comments on the Connecticut Climate Change Action Plan. We would like to focus on Section 33 of the report, which is the Natural Gas Conservation Fund.

More than ever, we're all concerned with conservation and the importance of it as a component of State energy policy. We believe that little commercial that natural gas plays a key role in meeting the objectives of the environment, and enabling economic growth, and protecting our lifestyle, frankly.

I'd ask you to consider some important policy questions or issues as you consider these key, complex issues. First, in the marketing and sales area, I am very concerned and we are very concerned with price.

And we communicate with our customers every day, and that's their single biggest concern as well. We cannot support a 3% surcharge that only further increases the cost of natural gas or any energy source during the current high-priced, volatile energy markets.

We'd point out this would be especially burdensome to our low-income customers, of whom about 20% of our customer base are low income.

We're also mindful that the proposed surcharge would be imposed on natural gas consumers who are also electric consumers, essentially requiring those customers to pay into the same conservation fund twice.

As partners with the State, our companies have implemented cost-effective conservation in the past.

From our experience, we believe that the LDC's, with the oversight from DPUC, can implement successful programs and provide flexibility when they are internally designed by the LDC's with the Consumer Council and the Office of Policy and Management. We've had very good successes.

We believe we should leverage on those past successes and expertise moving forward. Our third point, our companies cannot endorse any policy that would make natural gas competitively disadvantaged versus alternate fuels, such as oil.

Fourth, if this Plan is being seriously considered, then on that third point, parity with other fuel types should be incorporated and, therefore, a surcharge should be applied to all other alternate fuels, such as oil, propane, and kerosene.

We believe applying a surcharge, if it were enacted just on natural gas, would have the consequence of creating an economic disincentive for this clean, efficient fuel source.

So, in conclusion, on behalf our companies, we want to, again, express appreciation and thanks for your support and your work on these complex issues.

We have been asked to talk with the proponents of this Plan and will do so, actually, next week. We will assist the Legislature and Regulators as necessary. Thank you, and I'd be happy to field any questions.

REP. ROY: Thank you, Sir. Any questions from Members of the Committee? Senator Stillman.

SEN. STILLMAN: Thank you. Thank you, Sir, for being here this morning and sharing some of the percentages, in terms of your low-income customers, your concerns about the 3% surcharge, etc.

When you say you will be meeting with the, are you meeting, did you say the opponents, proponents?

JAMES MCNALLY, JR: I'm sorry, proponents.

SEN. STILLMAN: Proponents, okay. And will you then contact us? Is it your goal to share the outcome of that meeting with this Committee in any way or is it--

JAMES MCNALLY, JR: Haven't had the, I'm sorry?

SEN. STILLMAN: No, I was just wondering, or is it strictly something that you feel you need to do?

JAMES MCNALLY, JR: No, I think we'd be coming back and talking about what common ground we may have come to after those discussions.

SEN. STILLMAN: Very good. I think that would be most important. We do expect to have some bills presented to us that are pertinent to this Committee in relationship to the report, as opposed to, you know, we're not going to handle any transportation issues or energy issues. Those Committees can handle those or Commerce, for that matter.

JAMES MCNALLY, JR: Yes.

SEN. STILLMAN: So that might give you another opportunity, because those bills will have to have a public hearing as well.

JAMES MCNALLY, JR: I see.

SEN. STILLMAN: So, okay. But thank you for clarifying. I appreciate it.

JAMES MCNALLY, JR: You're welcome.

REP. ROY: Any other questions? Thank you very much, Sir.

JAMES MCNALLY, JR: Thank you.

REP. ROY: Eric Brown and Robert Earley. And as you signed up as a single entity, you have three minutes.

ERIC BROWN: I understand, so we'll talk very quickly. Representative Roy, Senator Stillman, good morning. Good morning, Members of the Committee.

My name is Eric Brown, I'm an Associate Counsel with CBIA and Director of our Environmental Policies Council. The subject's very broad today, the time is brief, so I'm going to stick to the question on the table of the day, which is on endorsement.

Last year, as you know, the legislation that was passed creating the goals for the State for 2010 and 2020 wisely included the request, requirement, really, for a report that would explain exactly what needed to be done to reach those goals, who it would impact, and what would it cost.

In this past December, the Governor's Steering Committee put a draft out and requested comments which CBIA responded to.

And consistent with the information that was part of the stakeholder dialogue process of a year ago, at that point, the 55 recommendations were still close to 30% short of the State goals for both 2010 and 2020, and approximately one-third of the specific recommendations had no cost evaluation completed on them.

The current draft that appeared just a few weeks later, the 30% gap that had existed was filled, not with any additional recommendations, but by further analysis, I guess, of some sort that we don't have the expertise to review, but we think ought to have some peer review before we have a lot of confidence in it or complete confidence in it.

And still, one-third of the proposed recommendations have no cost estimates associated with them. So, at this point, we feel that, for this Committee or any other Legislative Body to bestow a formal endorsement on this Plan, would be premature.

And with that, I'm going to turn it over to Rob Earley, my colleague who covers energy for CBIA.

ROBERT EARLEY: Hi, I'm Rob Earley. I am the Associate Counsel from CBIA that covers energy policy, and I also happen to be the Chair for the State's Energy Conservation Load Management Board. That is the board that is funded by a charge on all consumers' electric bills.

And just to put this in context of cost, right now, what we're hearing from our members is, as we enter this month and they're greeted with double-digit increases in their electric bills, they're also being greeted with double-digit increases from a year ago in the gas commodity, which continues to soar above its historic highs.

These costs are not insignificant. We were among the top ten in energy costs as we approach this year. I would venture to guess now that we're probably in the top three.

And we probably have a strong bet of beating New York for the second place, which would put us only behind Hawaii for the highest energy costs in the country.

One last point that I'd like to make, because I know we only have three minutes, is that the current funding for repairs that go into the funds we currently have, over $200 million to date has been taken from those funds to do things other than energy conservation. And with that, I'll conclude.

UNIDENTIFIED SPEAKER: If you have another thought--

ROBERT EARLEY: I think simply that the point that we're trying to get across is that you can support climate change, without having to support higher taxes or fees that are necessary for some of these proposals that have been put forward.

And especially with regard to the Oil and Natural Gas Fund, which is being held out as one of the ways we can now close this gap, we need to really look at, seriously, whether we can assess all the proposals and what their costs are before we can make an informed decision of how to reach these goals. Thank you.

REP. ROY: Thank you. Are there any questions from Members of the Committee? Representative Piscopo.

REP. PISCOPO: Thank you, Mr. Chairman. Just a quick question, and it deals with Connecticut, its competitiveness. Are you getting any, when someone's looking into coming to Connecticut, is there any mention of this Proposal or Plan brought up? Or is it too premature yet, so--

ERIC BROWN: I'm not sure I've heard anything specific to this Plan. What I do hear, continually, as late as yesterday's visit to the barbershop, is the concern, to put it mildly, about people's energy bills that they're getting in the mail now.

That comes from a small guy like that, and then I also have members at the other end of the scale that are looking to sight facilities to create jobs and really want to stay in Connecticut, and are saying, in all due seriousness, this is a tough one to justify with the front office, because the energy costs in Connecticut are so much higher than so many other places they have the option to go.

So the Plan, I have not heard people talk about too much specifically, but certainly, the cost of doing business is high on their list.

REP. PISCOPO: Thank you. Thank you, Mr. Chairman.

ERIC BROWN: And I would like to just add to that one thing.

REP. PISCOPO: Sure.

ERIC BROWN: And particularly, as advocates come before you on this, I think it's important to realize that meeting these goals, which your report says that it can now, is dependent upon the relicensing of nuclear power plants in Connecticut and that those get up and running.

That's an implicit assumption in the conclusion that these goals can be met. So to the extent we talk about priorities, and I know people have identified the Gas and Oil Fund as priorities, because the chart may show that they contribute more to reductions than other measures, realize that, again, the underlying assumption is that nukes are relicensed and in place.

If that doesn't happen, you're probably talking 50% short of meeting these goals. So, to the extent we go forward with anything here, we want to make sure it's clear what the priorities are, in terms of getting there, if we decide that those goals continue to have merit. Thank you.

REP. ROY: Thank you. Any other questions? Representative Megna.

REP. MEGNA: Thank you, Chairman. The conservation aspect also could lead to a lower price in energy costs. And we've seen, particularly with the Electric Conservation Fund, that many large businesses have benefited with lower energy costs.

So couldn't that also lead to a more competitive energy market here in the State, the conservation of gas, and oil, and electricity?

ROBERT EARLEY: I think that assumes that we're going to be able to match the fundings here with conservation projects. Our track record to date is, not only do we have $200 million that has gone for purposes other than conservation, but we also have a fund where the money still has not been spent. From year to year, we carry it over.

So I think we just need to look good and hard, before we create additional funds, at how we've done so far with collecting money for these purposes.

But the direct answer to your question is, yes, large businesses have benefited from these funds. And it's one of the reasons they're able to compete, because the cost of energy is so high.

I think one of the things that's worth noting, the existing proposal that's on the table is a 3% surcharge on the commodity costs.

The Electric Fund is a mill rate charge, it's a volumetric charge. So, in essence, you could be penalizing a consumer who's trying to use these programs and be more efficient for the volatility that's in the natural gas and oil markets.

I think that's a big problem or one of the problems among many, the biggest being that I think the costs right now, with regard to natural gas, and oil, and electricity, are so high that it doesn't make sense, at this time, to drive that price up higher for our businesses that are facing these cost pressures from around the globe and here domestically as well.

REP. MEGNA: [inaudible - microphone not on]

REP. ROY: Thank you. Senator Stillman.

SEN. STILLMAN: Thank you. Good morning. Thank you for your testimony. We certainly appreciate hearing from the business side of things as well, because I know you were involved in, I believe you were one of the organizations involved in putting together this report.

You mentioned the relicensing of the nuclear plants, which happen to be in my District. And, you know, I know that's moving along. We don't know yet what the NRC, the NRC has complete say in that.

It has nothing to do with the State, with the DEP or any Committee here, as you probably know.

But knowing that you are supportive of that, because, I mean, whether we like it or not, and there are lots of environmental issues around nuclear power plants, they are cleaner, in terms of air emissions, but the concern is, obviously, with the nuclear waste that the plants leave behind, quite frankly.

But they do provide about, I think, 45% or so of our electricity here in Connecticut. I would doubt very much we'll see any new nuclear plants licensed here, but certainly keeping Units 2 and 3 going at Millstone are most important to the future of keeping some of our electric rates down.

The other thing is, are you going to be involved at all as the DEP moves forward with their new solid waste management plan? You don't have any input in that--

ERIC BROWN: To the extent we have the opportunity to be a part of it, we'd appreciate the opportunity.

SEN. STILLMAN: Because as that new report will probably show, is that our waste energy plants are reaching their maximum, and we do have quite a few of them around the State.

And so we get back into the issue of recycling, as Representative Megna just talked about. So I do think that there will be opportunities there, as we put a new plan in place for solid waste management, to have it work with the climate change recommendations that I hope we will finally adopt.

On Monday, this Committee will take some action to just endorse, maybe in theory, because let's not forget, this is a draft Plan, it's not a final Plan, and I think it'd be premature for this Committee to adopt a Plan when it's not finalized.

So we will take some action on Monday that says, you know, we like what you did and let's move forward. But recycling on that large customer level, I think, will be helpful, in trying to keep some of those costs down and yet creating a cleaner environment. So, thank you.

ERIC BROWN: I'm aware the Plan is, there's a big push to get the Plan revised. We haven't been a part of the discussion yet, but we certainly look forward to it. Thank you.

REP. ROY: Any other questions? Representative Perone.

REP. PERONE: Thank you, Mr. Roy. Yeah, Mr. Brown, I just had a question. Has there been any discussion regarding the impact on insurance if these recommendations go through?

You know, reduce the effects of bronchitis, asthma, that sort of thing, you know, on projected insurance costs? Has anybody had discussion regarding that?

ERIC BROWN: To my knowledge, I haven't heard any analysis of what impact Connecticut taking action on global climate change, what impact that would have on insurance rates. You may hear from somebody today who has some expertise in that. I'm not sure, I don't [inaudible].

REP. ROY: Thank you. Any other questions? Thank you, Gentlemen.

ERIC BROWN: Thank you.

REP. ROY: Derek Murrow. He will be followed by Roger Smith.

DEREK MURROW: Thank you, Representative Roy, Senator Stillman, Members of the Committee. My name is Derek Murrow. I'm Director of Policy Analysis for Environment Northeast.

Environment Northeast is here today to strongly support endorsement of the Connecticut Climate Change Action Plan. This is a strong document that presents a framework for cost-effective action to reduce greenhouse gas emissions and also to achieve the targets that the State committed to last year.

We were stakeholders in the Governor's Climate Change Dialogue and very active in helping to develop the recommendations that form the bulk of this Climate Action Plan.

We were also the lead advocates, along with Clean Water Action and the Connecticut Climate Coalition, on last year's P.A. 04252, AN ACT CONCERNING CLIMATE CHANGE.

We wanted to remind the Committee that the Climate Change Bill last year had 112 cosponsors. It passed the Senate unanimously, and by 133 to 14 in the House. You really couldn't ask for much stronger support for the development of this Plan.

The Climate Plan lays out a framework and a list of policies that the State should implement in the coming years to achieve its targets.

We thought it would be helpful to highlight a couple of important policies that we believe the Legislature should implement this year.

Our top priority is natural gas and heating oil conservation. This would achieve 43% of the 2010 emissions reduction target. These programs also would save the State over $5 million and generate over 2,000 new jobs by 2020. There are details of this analysis in the Plan, which we encourage folks to look at.

We really view these policies as an economic development, as well as a jobs policy. And I think it's important to remember that cost is made up, both of price and consumption.

So although there may be a slight increase in price, the reduced demand will significantly reduce overall energy cost to consumers.

We also believe that this will be introduced as legislation this year through the Energy Committee, and there'll be an opportunity for more discussion of this proposal.

The next important policy we think the Legislature should consider is reducing emissions from diesel engines, which contribute both to global warming and to the State's tremendous asthma problems.

Legislation is also being introduced this year, we believe, by Senator Williams that will create a comprehensive diesel emissions reduction program, using existing technologies and strategies to dramatically reduce emissions from diesel engines.

Environment Northeast appreciates the efforts of this Committee in reviewing the Climate Plan, and we urge the Committee to endorse the Plan, and make gas and oil conservation, and reducing emissions from diesel engines, the highest priority for implementation this year. Thank you.

REP. ROY: Thank you. Any questions from Members of the Committee? Seeing none, thank you very much.

DEREK MURROW: Thank you.

REP. ROY: Roger Smith, to be followed by Tom Malone.

ROGER SMITH: Good morning, Senator Stillman, Representative Roy, and Members of the Committee. My name is Roger Smith, and I'm here representing the Connecticut Climate Coalition, which is a diverse coalition of more than 85 organizations, representing over a half-million Connecticut residents.

And I want to thank you for the opportunity to speak before this Committee, and I also want to let you know that I did submit written testimony.

I'm here to speak in support of the draft Connecticut Climate Change Action Plan 2005. In short, this is the Plan we've been waiting for.

This is the Plan we've been waiting for since 2001, when the New England Governors and Eastern Canadian Premiers recognized that global warming poses a serious threat to the region and committed our states to doing something about it.

The New England Governors Agreement and the upcoming release of the Plan are moments that make us proud to live in Connecticut and New England.

We're proud that our leaders look to a problem like global warming and don't throw up their hands, but roll up their sleeves. The Connecticut Climate Coalition urges you to endorse the Plan in front of you as a roadmap towards reaching the goals of the New England Governors and Eastern Canadian Premiers, which you embraced in an act concerning climate change last year.

This draft Plan is strong because of the robust public planning process which spanned the last two years. Several organizations in our coalition were stakeholders, who helped suggest and refine the recommendations.

Other groups wrote about this Plan in their newsletters, talked about it in their local meetings, and encouraged their members to take time off from work and from their families to come to public hearings on the Plan.

It's fitting that this transparent public process ends with a public hearing, this time in front of the Environment Committee. We're excited about the Plan because of the real economic and health benefits it'll bring to the State of Connecticut.

As you know, Connecticut has severe air quality problems. And measures in this Plan, like the Clean Car Standard, which was already passed last year, initiatives to clean up diesel pollution, and increased use of clean, renewable energy, will make Connecticut a healthier place and more desirable place to live.

We're also excited about policies to reduce pollution by increasing energy efficiency, which allows us to maintain our standard of living and allows us to spend less of our money on fuels like heating oil and natural gas.

Our only point of concern with the Plan is that it assumes we will continue to rely on nuclear power over the next few decades. We're concerned about the unresolved risk of accident or attack, and the unresolved problem of storage of radioactive waste.

Because of this uncertainty, the agencies should strengthen the existing recommendations and investigate new ones to enable us to reach our climate change goals without relying on nuclear energy.

So I want to thank you for your time. And I urge you to endorse the draft Climate Plan, so that the Governor's Steering Committee on Climate Change can continue to develop it.

In this, you have the full support of our 85 organizations and many thousands of citizens across the State. And I'd be happy to answer any questions.

REP. ROY: Thank you. Are there any questions? Senator McKinney.

SEN. MCKINNEY: Thank you, Mr. Chairman. And thank you for your testimony. Just a quick question, if you know.

ROGER SMITH: Sure.

SEN. MCKINNEY: We had a representative from Quebec in, I guess, was it earlier this week or last week, who was coming around, meeting with some of us.

And one of the topics we talked about was the New England Governors and Eastern Canadian Premiers' movement on this topic.

Can you tell us what the other New England states, who signed the agreement as well, have done? Where are they, in terms of their action plan? Are we ahead, behind, if you know the answer to that.

ROGER SMITH: Sure, I can speak to that, at least for some of the states that I've been working more closely with.

Massachusetts was actually the first state to release their climate action plan, and they did so several days after we passed an act concerning climate change last year.

I think their plan has 70-something recommendations in it, and right now, they're moving forward with implementation. So Massachusetts is the first, in that regard.

We were actually the second state to commit to the New England Governors' goals, do legislation. And the first state to do that was Maine.

And that really started the process for them, so they actually just completed their own state quota process. They came out with 55 recommendations, and now they're working to finalize their own plan.

I think Rhode Island, they do things a little bit differently in Rhode Island. So they're actually on their fourth stakeholder process.

And the fourth one is concerned with public education and how to get buy in from their communities. And from there, I think they're going to finalize their plan and move to implementation.

I know that Governor Douglas in Vermont, I believe, recently recommitted to the goals of the New England Governors. There's been some turnover in Vermont and New Hampshire, so they're actually a little behind, and they're only starting on the planning process now.

I'm not sure as much about the progress of the Canadian provinces, but we do put out a scorecard every year which compares the states and the provinces on their action towards reaching these goals.

And last year, Connecticut and Massachusetts were tied for first place in that, so you know.

REP. ROY: Any other questions? Thank you very much. Tom Malone. He'll be followed by Janet Heller.

TOM MALONE: Good morning. I am Tom Malone, retired from more than three decades of involvement in this issue with the National Academy of Sciences, the International Council of Science, and the World Meteorological Organization.

I found this report to be very persuasive on two counts. First, the balanced and the professional tone, and the solid science make it a basis for forward-looking legislative action.

And secondly, the extraordinarily diverse group of stakeholders who produced this report. On that basis, I'm very pleased to strongly urge you to endorse this fine report.

I will touch very quickly on four topics. The evolution of science on this issue, during the 1970s, the emphasis was on reducing uncertainties and assessing seriousness.

In the '80s, the attention was on developing a broad, international consensus. That happened in 2001 when the Intergovernmental Panel on Climate Change came out with the statement, there is a new and stronger evidence that most of the warming observed over the past 50 years is attributable to human activities.

Then, last September, down at Wesleyan University, the smoking gun on this issue was revealed in the study by the nine member government analysis of the overwarming in the Arctic.

And the implications for the Artic and for the world at large were really the smoking gun. It was so strong that we sent a letter to President Bush, which I've attached to my report, outlining that swift action at the federal government is required. We've had no answer yet from that request.

But subsequently, in fact, this week, there was an article in The New York Times on a similar study in the Antarctic. And the results, two of them are very important.

One is the expectation that there'll be a 4 feet rise in sea level globally. And the statement by Dr. Rignot of the Jet Propulsion Laboratory, and he said, if Antarctica collapses, it will have a major effect on the whole globe.

This tells us sort of the present status of the science. Since I prepared my testimony, the University of Oxford scientist has now harnessed thousands of computers to elaborate on his model, so the science is fastbreaking.

Now it's back to impact on Connecticut, vulnerability, I would cite simply two examples. One is the, imagine the impact on Connecticut's coastline of a four foot rise in the Long Island Sound level.

Or speculate on the impact on the insurance industry of a global climate change that would generate heat waves, more severe and frequent storms, and raising sea level.

Now there's a tendency to look at this as a doomsday scenario. But in our letter to President Bush, we pointed out that approach on this problem is really the first step toward the pursuit of the vision of a local, national, and global society, in which all basic human needs are met and an equitable share of life's amenities are enjoyed by every individual in successive generations, while maintaining a healthy, physically attractive, and biologically productive environment. The report before you is a first step.

UNIDENTIFIED SPEAKER: [inaudible - microphone not on]

TOM MALONE: Yes. Why this initiative in Connecticut? I would commend your attention to the new book, Collapse, by Jared Diamond, who says that working to fix your local environment has another benefit, besides making your own life more pleasant.

It also sets an example to others, both in our country and overseas. I'd be glad to answer questions.

REP. ROY: Thank you. Are there any questions from Members of the Committee? No. Sir, thank you very much. Janet Heller, to be followed by Dr. Margo Thornberg, Thorning, excuse me.

JANET HELLER: Good morning, Madam Chair, Mr. Chairperson, Members of the Committee. I'm here to speak in support of the draft Connecticut Climate Change Action Plan 2005.

I speak directly for about a dozen members of our Sustainable Living Committee of the Unitarian Universalist Church in Manchester, and indirectly for its 268 members.

And I speak directly for the board members of the Connecticut Northeast Organic Farming Association, which serves over 500 members in Connecticut.

Our congregation, UUS:East, joins others in seeking to become what we call a Green Sanctuary. Our major focus has been on actions to combat global warming.

In this effort, we join with congregations across the state, which are members of the Interreligious Eco-Justice Network.

In our homes, in our church building, here in our State, we are taking actions to encourage energy conservation, to promote renewable energy, to increase recycling, to protect Connecticut's farmland and forests, and to promote local farming and local organic produce.

We strongly support this Climate Change Action Plan for the sake of our children, whether they live and breathe in our polluted cities or on a hillside in Glastonbury.

And for the sake of our plant and animal communities, and the interdependent web of life that we are all a part of, here in Connecticut and around the world, we must do this work now if we want to have any hope of leaving a livable, breathable, beautiful State and earth for our children and their children.

And we must join regional efforts, and encourage other states and other nations in making similar efforts. I urge you to build on the good work you have begun here in Connecticut.

It is time for us to seriously decrease our dependence on fossil fuels for multiple reasons and on nuclear power for its dangers and lack of safe waste disposal methods.

It is time to strongly and creatively promote an increase in conservation methods and practices, and development of renewal energy technologies and ways to put them into much greater use.

It's time to increase public transportation and other alternatives, reduce greenhouse gases and harmful diesel emissions from school buses and other vehicles.

It's time to promote smart growth in our cities, and to protect all of our remaining forests and farmlands which absorb carbon dioxide, and to increase a local, sustainable food system.

Supporting locally grown produce makes us less dependent on food transported from thousands of miles away, while spewing greenhouse gases all the way across America.

This broad Plan, supported by diverse sectors of Connecticut stakeholders, effectively addresses these issues and many more.

And we strongly support it and hope you will vote to endorse this Connecticut Climate Change Action Plan. Thank you.

REP. ROY: Thank you. Any questions from the Committee? Seeing none, thank you very much. Dr. Thorning, followed by Ellen Castaldini.

MARGO THORNING, PHD: My name is Margo Thorning. I'm the Chief Economist and Senior Vice President with the American Council for Capital Formation. I want to thank you for the opportunity to appear before this Committee to discuss this very important topic.

Before turning to the economic impact on Connecticut of the Climate Action Plan, I'd like to just step back a minute and review some of the economic analyses that have been done for the U.S. economy as a whole.

I think the reason that the Bush Administration rejected the Kyoto Protocol is because they had done sufficient modeling with very good macroeconomic models to conclude that the cost to the U.S. would be very high, perhaps 2% to 4% of GDP, if we tried to comply with the Kyoto target in the year 2010, and perhaps the loss of three million jobs.

There's a range of models whose results are presented in my testimony in Figure 1, and I would like my testimony to be included in the record, if I could ask that.

So looking at the Connecticut situation, the Charles River Associates, a very well-respected international energy modeling firm, has tried to measure the cost to Connecticut of complying with the New England Governors Plan, which, as you know, requires reduction to 1990 levels of emissions by 2010, 10% below 1990 levels by 2020, and an 80% reduction in CO2 by the year 2050.

These studies are posted on the ACCF website at www.accf.org for your review, and I summarize them in my testimony.

The bottom line is, all of the studies, one of which is looking at Connecticut going it alone and imposing the New England Governors Plan on the economy, the other study is Connecticut joining with the other eight Northeastern states and adopting the New England Governors Plan.

And then finally, Charles Rivers looked at the impact of just requiring the utility sector in Connecticut and the other Northeastern states to comply with the New England Governors emission targets.

But all these studies show rather significant negative impacts on the Connecticut economy.

For example, under the proposal of Connecticut joining with the eight other Northeastern states to try to meet the New England Governors target, household income is reduced by $2,700 annually by the year 2010.

The poor and the elderly are much harder hit than other income classes, and there are over 9,000 fewer jobs in the State of Connecticut in 2010.

So using a general equilibrium model, as Charles Rivers does, it's fairly clear that these proposals will have very real economic costs.

There is a better path forward, which, I think, stepping back, looking at emissions globally, because climate change is a global issue, the better path forward is to encourage economic growth and economic freedom in the developing countries like China, and India, and Brazil, where the new growth and emissions are going to be coming from, because economic growth pulls through the capital stock more quickly, so that we see declines in emissions intensity.

So the hope for the future, in terms of reducing greenhouse gasses globally, is to encourage developing countries to adopt new technology.

And if economic freedom is encouraged, they will grow faster. They will be able to get access, not only, well, to current technology, which is much better than what they have in place, but hopefully encourage their own economic growth and gradually reduce emissions intensity.

And I think that's the only viable way to go forward, because governments are not willing to impose sufficient pain on their populations to ratchet down emissions in line with the New England Governors target, for example. It just simply won't happen.

It's not happening in Europe. They're not on track to meet their targets, they have no intention of actually forcing their economies down to meet their targets.

And if Connecticut goes in that direction, they will be going down a path that the rest of the world is beginning to step back from. Thank you.

REP. ROY: Thank you, Doctor. Are there any questions? Representative Piscopo.

REP. PISCOPO: Thank you, Mr. Chairman. Thank you for coming up, Doctor, appreciate it. You mentioned the Charles River Association.

Last year, in deliberation of this Bill, we had them up for a seminar, and I'll be sure to distribute that to the Members of this Committee. And I appreciate that testimony to how this will affect the economy of Connecticut directly.

You also mentioned the European Union, which seemed to be one of the first groups to accept the Kyoto Protocol. Can you just elaborate a little more than you did in your testimony?

MARGO THORNING, PHD: Well, of the original 15 member states in the EU, only one is now on track to actually meet their Kyoto target. And the Italian government, for example, said at the COP 10 meeting in Buenos Aires, which I participated in, that, for the second commitment period, where they're talking about the much stronger cuts in emissions, maybe 50% to 60% below 1990 levels in the post-2010 period, the Italian government is saying that, unless China and India are engaged, they're simply not going to feel like going ahead and adopting the tighter targets, because they understand the competitiveness and job loss impacts of binding their economy to near-term targets and timetables.

So business people in Europe are increasingly asking that policymakers take a look at targets, based on emissions intensity, which is, of course, the Bush Administration's position, that we need to think about reducing emissions intensity per dollar of output, rather than trying to hit near-term targets and timetables, which, as I said, governments do not have the political will to impose on their populations. They wouldn't be re-elected if they did.

REP. ROY: Thank you. Any other questions? Representative Megna.

REP. MEGNA: Thank you, Chairman. Doctor, what's your feel about conservation and efficiency or reducing energy demand, and that impact on the economy.

MARGO THORNING, PHD: I think where it's cost-effective, of course, conservation has to be part of the solution, in terms of reducing greenhouse gas emissions.

But where it's not cost-effective, it is going to have a negative impact on competitiveness, and jobs, and so forth. But certainly, it has to be part of the package of approaches to reducing greenhouse gases.

REP. MEGNA: I'm sorry, but in terms of impact to the economy, does it make the economy healthier?

MARGO THORNING, PHD: If you conserve energy and you have to use higher cost inputs because you're changing your production process, it will cost you money. So--

REP. MEGNA: But in the long [Gap in testimony. Changing from Tape 1A to Tape 1B.]

MARGO THORNING, PHD: --it would not hurt your bottom line. But if you have to change it over the near term, capital stock, much of it, especially in the electricity production, has a very long life.

And if you prematurely retire capital to try to conserve energy, it will raise your cost of doing business, relative to the baseline. That's all I'm saying. But certainly, conservation can be part of the process.

REP. MEGNA: Thank you. Thank you, Chairman.

REP. ROY: Thank you. Any other questions? Thank you very much.

MARGO THORNING, PHD: Thank you.

REP. ROY: Ellen Castaldini, followed by David Sutherland.

ELLEN CASTALDINI: Good morning, Chairmen Stillman and Roy, and Members of the Environment Committee.

My name is Ellen Castaldini. And I'm speaking this morning as a concerned citizen and as an adult, who really enjoys doing environmental programs for children and adults for about a half a dozen organizations within Connecticut.

I urge you to support the draft Connecticut Climate Change Action Plan for 2005. Global warming is a problem that's faced by all nations of our planet earth.

And Connecticut, as part of the heavily industrialized United States, can play a significant role in supporting actions to lessen the negative impacts of greenhouse gas pollution.

I'm very proud that Connecticut passed an act concerning climate change in 2004. The recommendations of Action Plan 2005, which have been approved by climate stakeholders from industry, utilities, government agencies, academia, and non profits, provides a comprehensive plan for implementing our Climate Change Act.

Reliance on fossil fuels as the primary energy source causes pollution that results in major public health problems, especially in urban areas.

For children to succeed in school, attendance must be regular and children must not suffer from chronic health issues. Asthma rates have doubled in the past 20 years, and asthma is a leading cause of school absenteeism.

I want to highlight my support for the recommendations that will help reduce public health risks and reduce our dependence on fossil fuels.

I especially support the following actions in the Action Plan, recommendations to reduce diesel pollution from trucks and buses, especially school buses, and to improve public transportation options.

Recommendations to reduce reliance on fossil fuels by promoting energy efficiency and the use of cleaner energy sources. And I want to thank the Members of the Environment Committee who do work to sustain and improve the quality of our environment.

I'm grateful for your hard work. And I did provide written testimony, in addition to my verbal. Thank you.

REP. ROY: Thank you. Are there any questions from Members of the Committee? Seeing none, thank you very much. David Sutherland, followed by Steve Guveyan.

DAVID SUTHERLAND: Good morning. My name is David Sutherland. I am here today representing the Nature Conservancy, which is an international organization concerned with protecting biological diversity throughout the planet.

And many of the concerns concerning climate change revolve around the calamitous effects that it will have on our species and on our human communities.

Our organization is primarily concerned with the impact that climate change will have on natural communities, and plant and animal species, and I just want to address that for a minute.

If the temperature and climate changes that are predicted by a majority of climatologists now were to occur over a period of several hundred thousand years, we probably wouldn't see a loss of species diversity, necessarily.

Many species would be able to adapt. We might even have new species that would evolve to fill certain niches. But the changes we're seeing forecast are predicted to occur over a period of only 100 years.

That is an incredibly short time in the development of species. And we're very concerned that we're going to see a drastic reduction in the number of plant and animal species that are able to survive.

Both certainly coral reef systems, which are crucial to our fisheries, they are going to just be directly impacted. Many of them are already suffering, certainly from pollution, but also from the effects of warming.

Many other species, trees, plants, different animal species, are going to suffer indirectly through increased susceptibility to diseases and other types of pathogens that are currently attacking them.

They can withstand those now, but with climate change, they're going to be much more vulnerable to those.

And as we see a drastic reduction in the number of species that are able to survive, the health of our ecological systems is going to decline.

And we think that's bad, just for those species themselves, but it's going to have a very negative impact on our species as well.

Timber production is probably going to suffer. Fisheries are certainly going to suffer. And many other things that we depend on in the natural world are not going to be as available to us, and they're going to be far more expensive.

We feel that Connecticut needs to take a leadership role in this. Connecticut, Massachusetts, and certain parts of Great Britain were the leaders in the Industrial Revolution over the past couple of centuries or two centuries ago.

And there was a lot of consternation in Connecticut and Massachusetts at that time over some of the effects that the Industrial Revolution was having on our economies, on our societies.

But certainly, we've seen untold benefits from that Industrial Revolution. And we're seeing some of the same opportunities and challenges facing us now with this topic.

And we feel that Connecticut should be a leader. We're one of the most affluent political entities in the world, even taking away Fairfield County, so we should be a leader in this. Thank you very much.

REP. ROY: Thank you, David. Any questions from Members of the Committee? Thank you.

DAVID SUTHERLAND: Thank you.

REP. ROY: Steve Guveyan, followed by Donald Strait. Steve, did I get your last name right?

STEVEN GUVEYAN: Very good.

REP. ROY: Thank you.

STEVEN GUVEYAN: Senator Stillman, Representative Roy, Members of the Energy Committee, I'm Steve Guveyan from the Connecticut Petroleum Council, testifying on behalf of major oil companies and refineries doing business in the State of Connecticut.

Our comments on the Plan are very, very limited. We're commenting only on Sections RA 32 and RA 33, which assess a 3%, use whatever word you will, tax, fee, surcharge, assessment, on oil and natural gas to start and fund an Oil Conservation Fund and a Natural Gas Conservation Fund.

At current prices, $2.01 a gallon for heating oil, a 3% tax will raise it about $0.06 a gallon, and a similar amount for natural gas.

Our main point on this is that it's a very radical departure from what tax policy has been, both in Connecticut and other states in the Northeast.

Historically, we do not tax things that are classified as necessities of life. Food we buy at the supermarket, prescription drugs, heating oil, natural gas traditionally have not been taxed by either State government, federal government, or local municipalities in states that allow that.

This goes in the other direction. This is saying that, for the first time, we would start a 3% fee, tax, surcharge, and assess it on necessities of life, heating oil, all grades of heating oil, No. 2 oil that goes into your house, and then the heating oils that are heavier grade, 4, 5, and 6 oils that go into places like Hartford Hospital and United Technologies manufacturing plants.

There are no exemptions, the way it's written in the current draft. So it's 3% across the board on all oils, all natural gas. At current prices, that's about $0.06 a gallon.

The analysis in the document says it would raise about $20 million a year on the oil side and about $29 million a year on the natural gas side.

We've run our own sets of numbers, and our feeling is that that substantially underestimates how much will be raised. About 900 million gallons of heating fuels are sold in this State every year.

At $1 a gallon times the 3%, that's $27 million. We all know the price is a lot higher than that. At $2 a gallon, it's about $54 million. The document says $20 million.

So as we look at the numbers, especially on the oil side, we have not run them on the natural gas side, the document very much underestimates how much is going to be raised. A 3% fee is going to raise a lot more than what the document says.

The impact will be most severely felt by low income, then middle income, and then, obviously, at the end of the curve, high income.

Low-income people traditionally don't have the cash. And what the Plan says is, we'll match you on energy conservation funding, dollar for dollar.

So if a heating system costs $4,000 and you put in $2,000, you can access the fund for the remaining $2,000. Well, a low-income resident probably doesn't have the $2,000 in the first place.

There are no income guidelines in here, there are no income qualifications in here. And it does raise the question, as we've gone through the different scenarios, if everybody's assessed the 3%, so the low-income person's paying the 3% as well, what happens if the high-income guy, who does have cash for a new heating system, says, I want to access the fund.

In that case, you have the low-income person subsidizing the high-income person. That's really a matter of tax policy for Legislators to decide.

But we do want to make the point that, as we run the scenarios in different ways, there are a lot of inequities that come out of it. We have some other points, I know I'm out of time, but we have some other points regarding modeling, and we'll leave that at that.

REP. ROY: Thank you very much. Any questions from Members of the Committee? Representative Kalinowski.

REP. KALINOWSKI: Yes, Sir. Could you tell me, if the No. 2 heating oil was carved out of this assessment, what would be the revenue shortfall? Do you have any idea?

STEVEN GUVEYAN: Well, let's see. Of the 900 million gallons a year sold in this State, probably 550 of it are No. 2 home heating oil for residences.

So I guess we'd have to run the other 350 million, do the math and see whether we come out at the $20 million, whether it's a little bit more or a little bit less.

REP. KALINOWSKI: Thank you. Thank you, Mr. Chairman.

REP. ROY: Any other questions? Thank you very much, Sir.

STEVEN GUVEYAN: Thank you.

SEN. STILLMAN: Yeah, I had a question.

REP. ROY: I'm sorry. Wait a minute. Excuse me, I forgot my co-chair. Senator Stillman.

SEN. STILLMAN: Thank you, Sir. Good morning. You didn't get a chance to talk about the REMI modeling, so I will ask you a question about that.

Because I'm very cautious about REMI modeling, because I don't think that the, on other committees that I've served on, I don't think we've gotten accurate REMI modeling outcomes or even outputs, to begin with.

What REMI model did you use? And could you expand on, give us an idea as to how you utilized a REMI model?

STEVEN GUVEYAN: We did not run REMI numbers ourselves.

SEN. STILLMAN: Oh, okay.

STEVEN GUVEYAN: The people who did the Climate Action Plan did the REMI modeling.

SEN. STILLMAN: Right. I thought maybe you did some as well.

STEVEN GUVEYAN: Well, we didn't do actual modeling.

SEN. STILLMAN: Okay.

STEVEN GUVEYAN: What we did was looked at the inputs into the model. Our overall experience, and I have not dealt with REMI modeling myself, REMI is Regional Economic Modeling Initiative, have not done the modeling myself.

People who have done it have said the model itself is a very good model. What one has to be careful about, very careful about, are the inputs that go into the model.

It's the assumptions that are made, going into the model, because the assumptions going in are going to dramatically affect the inputs and the answers coming out. And that's what has to be looked at.

So, as we've had some people take a look at the inputs, you know, their analysis has been that this Plan, and the REMI suggests that there's going to be a large amount of home heating oil saved if we go with more energy efficiency equipment.

And if you go to the section of the Plan, I think it's number 32, they actually give you the numbers. They say that they're going to save roughly 10% of the heating oil sold on a yearly basis if we go this way, and then another 10% ten years after that. I think their firm number by 2020 is 22% in change.

We've run the heating oil numbers in this State going back a number of years, and what we have found is consumption in the State of Connecticut for all of the heating fuels has been very consistent.

The real difference, year to year, is the weather. The coldest years, you sell the most heating oil. The years that are a little bit warmer, you don't sell as much. But going back over five or six of the last seven years, what we've sold in heating oil in Connecticut is very, very consistent.

In the old days, going back 20-something years ago, the average homeowner here probably burned 1,400 or 1,500 gallons a year. Today that number is probably around 700 to 800 a year.

So as the housing stock turns over, old buildings come down or people buy houses, sell houses, and heating systems get upgraded, the big conservation impacts have been done. Not to say there can't be more done, there can, especially on the low-income side.

But it's very hard for us to believe the input into the model saying that we're going to save 22% of the gallons between now and the year 2020, when the big group of conservation homes is behind us, and, you know, year to year, people are doing this on their own.

One of the things REMI does not take into account, at least by our look, is the fact that most people who do energy conservation do it on their own.

If you find your oil bill is really high, you call your heating contractor. He comes in, he'll give you some quotes at the end of the winter, because you say, I really burned too many gallons.

He'll say it costs X, $4,000, you decide you're going to do it. And then starting next year, you're saving. REMI doesn't seem to take into account that most people in Connecticut are going to do that on their own and have been doing it on their own.

REMI seems to suggest that everybody that does it is doing it because of the funding coming out of the 3% fee. No fee, no savings. And our experience has been just the opposite of that.

And most people, when the price gets [inaudible], is the first thing they do, after they complain about the price, is to say to the heating oil delivery company or to their natural gas company, how am I going to save?

You've got to come in here and tell me what I can do. And they'll come in, and maybe on the oil side, where you got a bunch of choices, you can get three or four people coming in.

You get quotes, you find out what the options are, and then you sit down and figure out, you know, the numbers yourself, what are you going to do.

So our point is, in all of the modeling stuff, that much of the conservation for the middle class has already been done.

There is more that can be done, but the numbers, in no way, yield the REMI kinds of savings, and that is why we question the outputs at the end of all this, because the inputs going into the modeling just don't seem to mesh with all the numbers in Connecticut show. Sorry if that's a little bit long, but--

SEN. STILLMAN: Thank you, Steve. No, no, no, actually, I appreciated your answer. I thought that was a very complete one, that you are pretty much stating my concerns about REMI modeling. In this case, your feeling is that individual consumers' actions are not included in this REMI modeling. Is--

STEVEN GUVEYAN: Well, the--

SEN. STILLMAN: To a degree.

STEVEN GUVEYAN: Well, yeah. It seems, as we look forward, looking down the road, which is what this is doing, they seem to be suggesting that all of the savings are going to be due to energy efficiency improvements made from the fund, which is collecting the 3%.

SEN. STILLMAN: Oh, right.

STEVEN GUVEYAN: And our point is, that whether there's a fund or no fund--

SEN. STILLMAN: Yeah, people are going to do it.

STEVEN GUVEYAN: --people are doing it on their own anyway.

SEN. STILLMAN: Right, right. Thank you.

REP. ROY: Thank you. Any other questions? Representative Megna.

REP. MEGNA: Thank you, Chairman. I don't know if you remember it, but we used to have a federal income tax credit many years ago. I don't mean to mention anything about your age, but was that in effect when you were in business and did you notice, was that an effective way of energy conservation?

STEVEN GUVEYAN: Boy, it's probably a little older than I am.

REP. MEGNA: Yeah, okay. Sorry. But--

STEVEN GUVEYAN: I do remember that there was something back then, I just don't remember what the details--

REP. MEGNA: Yeah, it was back in the '70s. I forget when they did away with it, but it was very effective and people doing energy efficiency on their homes.

STEVEN GUVEYAN: [inaudible]

REP. MEGNA: And I'm just wondering if that's a more effective way of going about doing conservation efficiency.

STEVEN GUVEYAN: I think, when it first came, I remember the first Arab oil embargo, when prices really shot up in '73, '74, the second one was '79, '80, '81 with the Iranian Revolution.

Prior to '73, '74, nobody really ever talked about energy conservation. There was no real need to, because oil was not only plentiful, but it was dirt cheap, so nobody really every talked about.

So when that first round was done with the federal credits, all the low-hanging fruit was picked right away, and there was a lot of it.

And then, as the years have gone by, there's less and less, so I don't know that we would get the impacts today that we got back then. But from what people have told me, it was very effective back then.

REP. MEGNA: Yeah. Thank you. Thank you, Chairman.

REP. ROY: Thank you. Anyone else? Thank you, Sir.

STEVEN GUVEYAN: Thank you.

REP. ROY: Donald Strait, followed by John Hall.

DONALD STRAIT: Good morning, Senator Stillman, Representative Roy, and Members of the Environment Committee. I am Don Strait, Executive Director of Connecticut Fund for the Environment.

At a time when many in our country feel that our federal government is failing to fulfill its basic obligation to protect our environment and our health, I want to begin by thanking you for working so hard to address these problems here in Connecticut.

Thanks to the efforts of Connecticut's elected official and the professionals in our Department of Environmental Protection, our State is becoming a leader in the effort to make Connecticut and our nation healthier, and a safer place to live and raise a family.

Of particular note is the fact that, here in Connecticut, concern for the environment is bipartisan, and leadership has come from both sides of the aisle.

As one of Connecticut's leading environmental organizations, we recognize, for example, that our State would never have been able to adopt the historic Clean Cars Legislation if had not been for the hard work of many Legislators, including Senator Williams and Senator McKinney.

We hope and believe that a clear and strong consensus is developing among Republicans and Democrats that Connecticut can and must have a comprehensive and sophisticated Climate Change Action Plan.

The threat to our health and our environment from global warming pollution, including carbon dioxide and black carbon from diesel, is real.

These pollutants not only create direct health threats, but they warm the atmosphere, creating conditions that make heat-related illness and infectious disease more likely. More hot summer days themselves will mean more smog, which is associated with more asthma attacks and respiratory illness.

Unfortunately, despite the unequivocal scientific consensus that accelerated global warming is a result of human activities, there are still some in Washington and around the country who blithely dismiss the evidence.

They will go so far as to say that global warming is not happening or if it is, we must choose between a strong economy and a clean environment.

Here in Connecticut, we know that they are wrong. We can and are working successfully towards both of these critically important goals.

This historic initiative to reduce the dangerous pollution that causes global warming is a fair, equitable, and commonsense approach to developing real solutions that will have a positive impact on our environment and our health, and we urge the Committee to endorse it.

As the 2005 Session moves forward, this Committee and the entire General Assembly will have a number of opportunities to discuss these proposals in far greater detail.

For example, Connecticut Fund for the Environment, along with our many partners in the Clean Cars Alliance and the nationally respected organization Environmental Defense, have been working with Members of this Committee to take last year's Clean Cars Legislation to the next level and provide Connecticut's citizens with even greater incentives and protections.

As I said, our elected officials should be proud of their accomplishments to date, and we urge you to continue on the important path you have laid out.

We look forward to continuing to work with you in this task. Thank you very much. And I'd be happy to take any questions.

REP. ROY: Thank you. Are there any questions from Committee Members? Seeing none, thank you very much. John C. Hall, followed by Judi Friedman.

REV. JOHN C. HALL: My name is John Hall. Thank you for the opportunity to speak. I'm a constituent of Mr. Kalinowski's District. I've been to many hearings on environmental issues here. This is the first time I've had an opportunity to actually speak.

I'm a minister in Middletown, a United Church of Christ congregation. Our congregation has also set up a non-profit corporation called the Jonah Center, which has a mission to promote the renewable energy use in our State.

Apart from all the obvious issues that pertain to climate change that have been mentioned, I'm here to speak in support of this Plan, but I want to focus on two particular points.

Many people from the business community appear before the Environment Committee and often speak of the damage that will be done to the poor or the elderly if we have environmental regulation. I suggest that there are many ways to help the poor, and if we want to do that, we can.

As far as the costs of this Plan to the economy, and some speakers have spoken to this, the price of additional energy costs, I'd like to say that the fossil fuel economy itself is coming to an end.

Humans have a tendency to use up fuel sources. We used up the wood supply in Connecticut in the 19^th Century. The United States' fossil fuel production peaked in the early 1970s.

Most people believe that Middle East fossil fuel production has already peaked. And most experts believe that fossil fuel production, oil and natural gas in the world will peak in the near future.

The pessimists feel it's already peaked, the greatest optimists feel it may peak in 20 to 25 years. When this happens, all our fossil fuel costs are going to increase. And if we aren't prepared to use renewal energy resources, our economy is going to be in big trouble.

And I really feel very strongly that the provisions in this Bill to fund renewable energy production and conservation are extremely important, just for our economy's sake. So I want to make that point. Many other industrial nations are far ahead of us on this score, as another speaker pointed out.

I want to address, briefly, one other personal concern of mine, and it involves school buses. I often take walks in the afternoon at a local school.

When the buses line up, 25 buses, and sit, idling, for as long as 30 minutes, diesel engines creating a huge cloud of pollution, to which these students walk out into every day.

The tailpipe of one bus is 10 feet from the door of the next bus. I've tried to work through the superintendent of schools, I've tried to work with the bus company, Datco, and I've gone into bus drivers.

I've gone to the buses and asked the drivers if they heard about the regulation to turn the buses off if it's above 30 degrees. They haven't heard about it. They will turn their buses off, and the next day, they'll be back on.

I haven't been able to access this Plan on the part on school buses, but if there's any opportunity to change it and to require school buses to turn their engines off when they're idling and when it's above 30 degrees, I think that would be a very good measure to take for the health of our students in our community. Thank you very much.

REP. ROY: Thank you. Any questions? Senator Stillman.

SEN. STILLMAN: Thank you very much for your testimony. A comment about--

REV. JOHN C. HALL: I do have written testimony.

UNIDENTIFIED SPEAKER: Yes, we have it, yeah.

SEN. STILLMAN: Yes, I have it in front of me, thank you. Your comment about the school buses concerns me, because we do have a law. I believe they're only allowed to run for three minutes, and then they're supposed to be shut off.

So I, you know, hearing this concerns me, because we know every community has some battles about that because, you know, they don't want to turn their engines off.

But the reality is they're supposed to. And so I would, and that law should be, you should be able to access that on the Internet, you know, and--

REV. JOHN C. HALL: The link seemed to be broken.

SEN. STILLMAN: --[inaudible] statutes.

REV. JOHN C. HALL: I had the link, but it wouldn't go, sorry.

SEN. STILLMAN: So you would be, I think, perfectly safe--

REV. JOHN C. HALL: Okay.

SEN. STILLMAN: --in approaching your school superintendent and maybe your mayor because, are you from Middletown?

REV. JOHN C. HALL: Middletown, yes.

SEN. STILLMAN: Yes, about your concern that the bus company is violating the law.

REV. JOHN C. HALL: I wasn't aware that there was the law. Do you know when that law was passed?

SEN. STILLMAN: I think a couple of years ago. It's pretty recent.

REV. JOHN C. HALL: Okay. I've been working on this for about six years, so I'm glad to know there--

SEN. STILLMAN: It's pretty recent.

REV. JOHN C. HALL: Yes.

SEN. STILLMAN: And I know it created a lot of consternation from the bus companies in the towns, etc. Some towns actually had to move buses to other areas, because the fact that, you know, just some people in their communities complained. They actually, some towns took the initiative and actually put buses elsewhere so they weren't so close to the children, and then would slowly move them up as the children came out of school. But 30 minutes truly is--

REV. JOHN C. HALL: Yeah, it's a long time.

SEN. STILLMAN: Yeah.

REV. JOHN C. HALL: It's a very stinky atmosphere, believe me.

SEN. STILLMAN: And it's horrible. And so thank you for mentioning it, and maybe we need to remind the communities, so [inaudible]--

REV. JOHN C. HALL: And thank you for pointing out that there is a law. I wasn't aware of that. I apologize for that omission.

SEN. STILLMAN: [inaudible]

REV. JOHN C. HALL: Yeah, thank you.

SEN. STILLMAN: Thank you.

REP. ROY: Sir? Sir?

SEN. STILLMAN: No, come back.

REP. ROY: Don? Representative Kalinowski.

REV. JOHN C. HALL: Yes, one moment.

REP. KALINOWSKI: Just a quick reassurance that your State Representative will take it upon himself to contact the people in that area to see if we can do something.

REV. JOHN C. HALL: Okay. I'll work with you on that. I have allies to work with us on that.

REP. KALINOWSKI: Thank you very much.

REV. JOHN C. HALL: Thank you.

REP. ROY: Any other questions? Thank you very much. Judi Friedman, followed by Dorothy Lovett Buckley.

JUDI FRIEDMAN: Thank you very much for being here. Thank you for choosing the jobs you've chosen. They're not always easy, and we really appreciate all you do.

My name is Judi Friedman. I'm chair of PACE, People's Action for Clean Energy, and I'm speaking in support of the draft Connecticut Climate Action Plan.

Our organization includes 2,500 constituent households in Connecticut, and our publicity and our renewable energy tours, held since 1975, have reached millions and millions of Connecticut citizens.

There is no doubt in my mind that global warming is a real issue. I am also a member of the National Board of the Humane Society of the United States, and have been privileged to see unique photographs.

One that haunts my mind is of a starving polar bear who cannot hunt seals because the ice floes are melting. There he stands, on his little island of ice, unable to find his food.

Our energy options are also making us sick. As you well know, cancers of many kinds and asthma make our State famous in a very sad way.

In addition, our economic situation is not as healthy as it could be if we had more jobs. Renewable energy technologies and energy efficiency options are healthier and better economic choices.

I can speak personally on the subject of solar hot water, passive solar technologies, and grid-tied photovoltaic power, because my husband and I treasure our 40 panel solar tracking system that supplies almost 80% of the energy we use in our Connecticut home and offices.

PACE members are also deeply concerned about nuclear power and urge that this terrifying energy source not be included in Connecticut's mix.

Terrorism, accidents at aging plants, and routine emissions of radioactive isotopes, and lethal, long-lived radioactive waste preclude this option.

I invite each of you, no, I beg and implore each of you to attend the FOX promotional screening of Meltdown on February 8^th at St. Joseph's College in West Hartford at 7:00 p.m., snow date February 10^th.

A panel discussion, lead by Connecticut anti-nuclear activists, will follow the feature film. This film is real, relevant, timely, and absolutely frightening. Ignoring the issues of terrorism is ignorant.

Lastly, I beg you to look backwards. We must all strive to act in the spirit of the Six Nation Confederacy of the Iroquois Nation.

Let us consider all our decisions as to how they will affect the next seven generations, not selfishly just ours. Thank you very much for your time and work.

REP. ROY: Thank you. Are there any questions? Okay, thank you very much. Senator McKinney has a statement to make.

SEN. MCKINNEY: I think Representative Kalinowski is [inaudible - microphone not on].

REP. KALINOWSKI: On previous testimony, note, Madam Chairman, that particular pubic act is P.A. 02-56. And so we have some good, quick research done here, and we'll do that bus idling thing as soon as we can.

SEN. STILLMAN: Great, thank you. Now I understand why we bring our computers with us.

SEN. MCKINNEY: And there is an exception in the law when it's below 20 degrees--

SEN. STILLMAN: Right.

SEN. MCKINNEY: --Fahrenheit, where they can keep the bus idling.

SEN. STILLMAN: Yeah, I mean, certainly, in this kind of weather, I would understand that. But still, 30 minutes is a long time, anyway.

SEN. MCKINNEY: Yeah.

SEN. STILLMAN: Thank you for your quick action for me.

REP. ROY: Okay. Dorothy Lovett Buckley, to be followed by Oliver Nicholas, Nichols, excuse me. Dorothy Buckley? Once, twice, three times. Oliver Nichols.

OLIVER NICHOLS: Good morning, Mr. Chairman, Senators, Representatives. My name is Oliver Nichols, and I am here representing the Episcopal Diocese of the State of Connecticut, Committee on the Environment.

Just by way of background, I am a retired Senior Officer, responsible for investments for one of the local insurance companies, but a national-sized company, involved in a full career with risk analysis and assessment.

So the reason I got involved with the committee that I'm representing this morning is because I know the risks involved with global warming are severe and very real if not remediated.

You have the text of written testimony from the Committee on the Environment of the Episcopal Diocese. The Episcopal Church of Connecticut has approximately 75,000 members.

In 1994, the Episcopal Diocese of Connecticut created the Committee on the Environment and charged it with the responsibility to promote an awareness and understanding of the sacredness of the natural environment and the need to restore the right relationship between humankind and all of creation.

In 2002, all 11 Bishops of New England issued a Pastoral Letter on the environment, calling every Episcopalian to act together to honor the goodness and sacredness of God's creation.

In this letter, the Bishops stated that global climate change is, quote, one of the most daunting challenges we face, unquote. From their perspective, global warming is but one stark example of the troubled relationship between humanity and the natural world.

And as Christians, we cannot remain silent. They call us to realize our corporate and individual opportunities to practice environmental stewardship and justice through our participation in public policy.

As Christians, we understand ourselves to be part of the natural order and that we are called by God as caretakers of creation. Some of the ways we know we can fulfill this responsibility are through the careful use of the earth's resources and by the reduction of the use of fossil fuels.

We can also ask our Legislators to develop and adopt sustainable policies that protect the environment and sustain our lives.

The State of Connecticut has a remarkable opportunity to provide a model for the rest of the nation by adopting a Climate Plan that is designed to reduce our air pollution, support clean energy technologies, protect our forests and farmland, and boost recycling rates.

We ask you to approve the Climate Plan and allow the Plan to continue to develop. We think that this new Climate Plan is a great step towards lessening our dependence on fossil fuels and reducing our air pollution problems in Connecticut.

SEN. STILLMAN: Thank you.

OLIVER NICHOLS: Thank you very much. And my four grandchildren thank you very much.

SEN. STILLMAN: Thank you, Sir. Anyone have any questions for the gentleman? Thank you. We appreciate your taking the time. Dmitri D'Alessandro, followed by Ken Colburn and Bob Maddox.

DMITRI D'ALESSANDRO: Good morning. Thank you, Senator Stillman, and Members of the Committee.

SEN. STILLMAN: Excuse me.

DMITRI D'ALESSANDRO: My name is Dmitri D'Alessandro. I'm the Director of Public Relations for Friends of the River Global. I'm going to try to make this brief.

This Climate Plan, aside from being critical for the health of our citizenry and environment, will provide something as a result that will have much more important impact for your constituents.

The long-term implementation of this Plan will create market pressure that can initiate a shift in Connecticut's economy towards advanced manufacturing, new infrastructure needs, and over the long term, give our State lower energy costs.

The business industries' representatives whining about high energy costs are not valid when the costs are taken relative to the other factors, such as our high taxes on energy, transportation costs, and the general affluence of our citizenry in this State.

Excuse me. According to a major ten-year research study, funded by the EU and undertaken by researchers from all member states and the United States, externalities, otherwise known as the hidden costs of fossil fuels, such as respiratory disease, deterioration of buildings, and lower agricultural production, effectively double the cost per kilowatt hour of burning petroleum-based fuels.

The costs are not directly apparent to the customer, but are long-term social costs. I strongly urge you to finalize and adopt this draft Plan and to create aggressive regulations to push our State into the forefront of a new market with amazing potential for job creation, energy conservation, and clean air.

Remember that the earth hangs in the balance, and you can start to tip the scales. The costs may be great, for we are at the first step of reversing almost 200 years of irresponsible profit-driven industrialism.

But the costs of inaction are much greater, and the results of maintaining our current lazy, quote, dollar today, ignore tomorrow attitude, will be much more expensive in the long run. Thank you.

SEN. STILLMAN: Thank you for your testimony. Questions, comments from anyone? Thank you, Sir.

DMITRI D'ALESSANDRO: You're welcome.

SEN. STILLMAN: Before we go on to the next speaker, I'd like to ask Committee staff, was there any testimony that could be piling up there that we have not received? If you would start handing it out, please, because I'm either missing some or some has not been--

UNIDENTIFIED SPEAKER: [inaudible - microphone not on].

SEN. STILLMAN: Oh, okay, so none of the speakers that are listed--

UNIDENTIFIED SPEAKER: [inaudible - microphone not on].

SEN. STILLMAN: Okay. Because if there is any testimony, would you please hand it out? Thank you. I appreciate it. Ken Colburn, followed by Bob Maddox, followed by Greg Dana.

KEN COLBURN: Thank you, Senator Stillman, Members of the Committee. My name is Ken Colburn, and I appear today on behalf of The Climate Group. It's a new international organization launched in April in London by Tony Blair.

Its purpose is to distill and then share the knowledge and experience of those that are successfully acting on climate change.

And specifically, I appear to commend to you the draft Climate Change Action Plan and those who prepared it, for its proposed policies would position Connecticut for long-term economic competitive advantage moving forward.

Connecticut's the right place to be undertaking these actions. It's moving in the right economic direction, and it's doing so in the right way.

Connecticut's the right place because you have a long, economically important coastline at risk of climate effects. You have a large property and casualty insurance sector, which will bear the brunt of a lot of the financial results of extreme weather events.

And at the same time, you have an extraordinary high-tech sector that will benefit from moving ahead on climate action. And you certainly have a tradition of environmental leadership.

In terms of the right economic direction, as illustrated in this handout, it's a supplement to the current issue of Environmental Finance magazine, a chart on page ten shows how companies are profiting from emission reductions.

BP has made $650 million, British Telecom has saved almost $1 billion. So they're not simply UK companies. DuPont has saved almost $2 billion, IBM nearly $1 billion.

Put together, you have six companies that have reduced their emissions 60%, far more than contemplated under the New England Governors Eastern Canadian Premiers Plan or the draft Climate Change Action Plan before you today.

And in doing so, they've saved $5.5 billion dollars, billion with a B, and it hasn't taken 20 or 30 years to realize those benefits.

There are local companies as well on that table. You'll see United Technologies, which, for example, its Otis Elevator unit is working on generating electricity as the elevator comes back down, using the force of gravity. That kind of technology is what will penetrate the future.

It's also not just companies. A chart on page 16 lists municipalities that are operating and lists, for example, Minneapolis, which is saving its taxpayers $113 million as a result of steps it's taken.

And then on page 23 is another table of states which includes Connecticut, largely in recognition of the steps that you took last year.

It's also the right way that you're approaching these actions. For example, the Climate Change Action Plan contemplates a Natural Gas Conservation Fund to address demand.

A company in Canada, Enbridge Gas Distribution Company, one of those on the table, undertook something similar, invested about $65 million, $70 million over the last nine or ten years. It's that handout in your packet. And in doing so, they've saved $700 million to their customers.

Likewise, the green sheet is a Resolution passed two weeks ago by the European Parliament, showing that Connecticut is well up on world pace of developments.

Items in that Resolution call for clean cars, much as you have adopted, complements RGGI, the cap-and-trade program that Connecticut's participating in, and proposes that the EU recognize that cap-and-trade program with its own system.

So climate action, Madam Chairman, is largely driven by efficiency. Efficiency is largely driven by productivity, productivity is driven by innovation.

And as you know, in any case like this, the early birds will have the best picking of the innovation worms [Gap in testimony. Changing from Tape 1B to Tape 2A.]--new to this program.

In doing so, Connecticut is creating competitive advantage and long-term economic opportunity in preserving not merely its tradition in environmental leadership, but also its extraordinarily high quality of life.

I also have a bit of experience with modeling in Charles River and was also in Buenos Aires at the UN Discussions. I'd be pleased to answer any questions on these or those topics. Thank you very much.

SEN. STILLMAN: Thank you very much. Are there any questions? Representative Mushinsky.

REP. MUSHINSKY: Thank you. And I'm very pleased to see you here today.

KEN COLBURN: Thank you.

REP. MUSHINSKY: I appreciate, especially, your reminding our Legislature that there's great economic advantage to being out there and being at the cutting edge, being innovative. So I'm glad you mentioned that again.

We were an early state on fuel cell technology. And the insurance industry actually helped that happen, and they got it. They got the connection and were out there supporting it. So thanks for reminding us of that. That's important to put that on the record.

And I wanted to ask you about carbon trading. I know that is helping promote the competition for efficiency in Europe, but I'm not sure how it might apply to us or whether it will apply or if there are any participants in Europe that are also players here that might bring it to Connecticut.

KEN COLBURN: Well, there certainly are in the latter category, Swiss Re, for example, one of the world's major reinsurance companies, is actually a founder of The Climate Group.

It has a headquarters in London and a strong presence in New York, and I believe its executives live in Connecticut as well. So there's overlap there.

There's a lot of action that has to be taken before cap-and-trade can operate linked to the EU. But the important thing is that they're willing to consider it.

And in doing so, you'd have a much bigger pool from both buyers and sellers, so it'd be that much stronger and more effective a market.

SEN. STILLMAN: Thank you. Any other questions, comments? Thank you very much.

KEN COLBURN: Thank you.

SEN. STILLMAN: Next, Bob Maddox, followed by Greg Dana, followed by Eric Haxthausen. Sorry, when you get up here, you'll tell us how to pronounce your name. Mr. Maddox, a pleasure to see you, Sir.

BOB MADDOX: Thank you, Senator Stillman. It's a pleasure to be here before one of the best Committees in the Legislature. My name is Bob Maddox.

I'm presently the Northeast Regional Manager for Sterling Planet, also President of the Connecticut Green Building Council, and a Certified Organic Farmer.

And I'm really here to briefly speak to you about this Plan. The first suggestion I would like to make, actually, following up with the previous speaker's comments, is that maybe the Plan needs to be renamed.

Instead of saying a Climate Change Action Plan, it really needs to be called a Plan to Implement Cost Savings Through