File No. 578

House of Representatives, April 20, 2006

The Committee on Finance, Revenue and Bonding reported through REP. STAPLES of the 96th Dist., Chairperson of the Committee on the part of the House, that the substitute bill ought to pass.

AN ACT CONCERNING ENERGY EFFICIENCY AND ELECTRIC DEREGULATION AND THE GROSS RECEIPTS TAX.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 12-264 of the 2006 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2006):

(a) Each (1) [Connecticut municipality or department or agency thereof, or Connecticut district, manufacturing, selling or distributing gas or electricity] municipality, or department or agency thereof, or district manufacturing, selling or distributing gas to be used for light, heat or power, [in this chapter and in chapter 212a called a "municipal utility",] (2) company the principal business of which is manufacturing, selling or distributing gas or steam to be used for light, heat or power, including each foreign municipal electric utility, as defined in section 12-59, and given authority to engage in business in this state pursuant to the provisions of section 16-246c*, and (3) company required to register pursuant to section 16-258a shall pay a quarterly tax upon gross earnings from such operations in this state. Gross earnings from such operations under subdivisions (1) and (2) of this subsection shall include (A) all income classified as operating revenues by the Department of Public Utility Control in the uniform systems of accounts prescribed by said department for operations within the taxable quarter and, with respect to each such company, (B) all income classified in said uniform systems of accounts as income from merchandising, jobbing and contract work, (C) income from nonutility operations, (D) revenues from lease of physical property not devoted to utility operation, and (E) receipts from the sale of residuals and other by-products obtained in connection with the production of gas, electricity or steam. Gross earnings from such operations under subdivision (3) of this subsection shall be gross income from the sales of natural gas, provided gross income shall not include income from the sale of natural gas to an existing combined cycle facility comprised of three gas turbines providing electric generation services, as defined in section 16-1, as amended by this act, with a total capacity of seven hundred seventy-five megawatts, for use in the production of electricity. Gross earnings of a gas company, as defined in section 16-1, as amended by this act, shall not include income earned in a taxable quarter commencing prior to June 30, 2008, from the sale of natural gas or propane as a fuel for a motor vehicle. No deductions shall be allowed from such gross earnings for any commission, rebate or other payment, except a refund resulting from an error or overcharge and those specifically mentioned in section 12-265. Gross earnings of a company as described in subdivision (2) of this subsection shall not include income earned in any taxable quarter commencing on or after July 1, 2000, from the sale of steam.

(b) (1) Each such company and [municipal utility] municipality, or department or agency thereof, or district manufacturing, selling or distributing gas to be used for light, heat or power shall, on or before the last day of January, April, July and October of each year, render to the Commissioner of Revenue Services a return on forms prescribed or furnished by the commissioner and signed by its treasurer or the person performing the duties of treasurer, or by an authorized agent or officer, specifying (A) the name and location of such company or municipal utility, (B) the amount of gross earnings from operations for the quarter ending with the last day of the preceding month, (C) the gross earnings from the sale or rental of appliances using water, steam, gas or electricity and the cost of such appliances sold, cost to be interpreted as net invoice price plus transportation costs of such appliances, (D) the gross earnings from all sales for resale of water, steam, gas and electricity, whether or not the purchasers are public service corporations, municipal utilities, located in the state or subject to the tax imposed by this chapter, (E) the number of miles of water or steam pipes, gas mains or electric wires operated by such company or municipal utility within this state on the first day and on the last day of the calendar year immediately preceding, and (F) the number of miles of water or steam pipes, gas mains or electric wires wherever operated by such company or municipal utility on said dates. Gas pipeline and gas transmission companies which do not manufacture or buy gas in this state for resale in this state shall be subject to the provisions of chapter 208 and shall not be subject to the provisions of this chapter and chapter 212a.

(2) No person, firm, corporation or municipality that is chartered or authorized by this state to transmit or sell gas within a franchise area shall transmit gas for any person that sells gas to be used for light, heat or power to an end user or users located in this state, unless such seller has registered with the Department of Revenue Services for purposes of the tax imposed under this chapter. The provisions of this subdivision shall not apply to the transmission of gas for any seller that is a gas company, as defined in section 16-1, as amended by this act, municipal gas utility established under chapter 101 or any other gas utility owned, leased, maintained, operated, managed or controlled by any unit of local government under any general statute or any public or special act, or a gas pipeline or gas transmission company subject to the provisions of chapter 208.

(3) The Commissioner of Revenue Services may make public the names and addresses of each person that sells gas to be used for light, heat or power to an end user or users located in this state and has registered with the Department of Revenue Services for purposes of the tax imposed under this chapter, and that is not a gas company, as defined in section 16-1, as amended by this act, a municipal gas utility established under chapter 101 or any other gas utility owned, leased, maintained, operated, managed or controlled by any unit of local government under any general statute or any public or special act, or a gas pipeline or gas transmission company subject to the provisions of chapter 208.

(c) (1) Each electric distribution company, as defined in section 16-1, as amended by this act, or municipality, or department or agency thereof, or district manufacturing, selling or distributing electricity to be used for light, heat or power, providing electric transmission services, as defined in said section 16-1, or electric distribution services, as defined in said section 16-1, shall pay a quarterly tax upon its gross earnings in each calendar quarter at the rate of (A) eight and one-half per cent of its gross earnings from providing electric transmission services or electric distribution services allocable to other than residential service and (B) six and eight-tenths per cent of such gross earnings from providing electric transmission services or electric distribution services allocable to residential service.

(2) For purposes of this subsection, gross earnings from providing electric transmission services or electric distribution services shall include (A) all income classified as income from providing electric transmission services or electric distribution services by the Department of Public Utility Control in the uniform system of accounts prescribed by said department and (B) the competitive transition assessment collected pursuant to section 16-245g, other than any component of such assessment that constitutes transition property as to which an electric distribution company has no right, title or interest pursuant to subsection (a) of section 16-245h, the systems benefits charge collected pursuant to section 16-245l, as amended, and the assessments charged under sections 16-245m, as amended, and 16-245n, as amended. Such gross earnings shall not include income from providing electric transmission services or electric distribution services to a company described in subsection (c) of section 12-265, as amended by this act.

(3) Each electric distribution company and municipality, or department or agency thereof, or district manufacturing, selling or distributing electricity to be used for light, heat or power shall, on or before the last day of January, April, July and October of each year, render to the Commissioner of Revenue Services a return on forms prescribed or furnished by the commissioner and signed by its treasurer, or the person performing the duties of treasurer, or of an authorized agent or officer, with such other information as the Commissioner of Revenue Services deems necessary.

(d) The tax imposed by this chapter is due and payable to the Commissioner of Revenue Services quarterly on or before the last day of the month next succeeding each calendar quarter.

Sec. 2. Section 12-265 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):

(a) As used in this section (1) with regard to electric power, "sales for resale" include (A) sales of electric power capacity, (B) power output from such capacity, and (C) all transmission charges in conjunction with such sales on or after May 17, 1982, [and] (2) "net invoice price" means invoice price less trade discounts, and (3) "municipal utility" means a municipality, or department or agency thereof, or district manufacturing, selling or distributing gas or electricity to be used for light, heat or power.

(b) (1) Each company and municipal utility included in section 12-264, as amended by this act, other than an electric distribution company, as defined in section 16-1, as amended by this act, included in subsection (c) of section 12-264, as amended by this act, and other than a municipality, or department or agency thereof, or district manufacturing, selling or distributing electricity to be used for light, heat or power, shall be taxed at the rate of five per cent upon the amount of gross earnings in each taxable quarter from operations, except as set forth in subsection (c) or (d) of this section and except that each company and municipal utility manufacturing, selling or distributing gas or electricity to be used for light, heat or power shall be taxed at the rate of four per cent upon the amount of gross earnings in each taxable quarter allocable to residential service, but deduction shall be made of gross earnings (A) from all sales for resale of water, steam, gas and electricity to public service corporations and municipal utilities, whether or not such purchasers are Connecticut public service corporations or Connecticut municipal utilities, and whether or not they are subject to the tax imposed by this chapter, (B) from any federal BTU energy tax included in adjustment clause and base-rate revenues, (C) from sales of appliances using water, steam, gas or electricity by each such company of the net invoice price plus transportation costs of such appliances, (D) of electric and gas companies, as defined in section 16-1, as amended by this act, from energy conservation loan programs, (E) from all sales for resale of gas to companies registered pursuant to section 16-258a, and (F) from all sales of natural gas to a user or entity located outside the state.

(2) Gross earnings for any taxable quarter, for the purposes of assessment and taxation, shall be as follows: (A) In the case of a company or municipal utility, other than a municipality, or department or agency thereof, or district manufacturing, selling or distributing electricity to be used for light, heat or power, carrying on business or operating entirely within this state, the amount of gross earnings from operations; (B) in the case of a company or municipal utility, other than a municipality, or department or agency thereof, or district manufacturing, selling or distributing electricity to be used for light, heat or power, carrying on business or operations a part of which is outside of this state, (i) such portion of the amount of gross earnings from operations determined under the provisions of section 12-264, as amended by this act, as is represented by the ratio of the number of miles of water or steam pipes, gas mains or electric wires operated by such company or municipal utility within this state on the first day and on the last day of the calendar year immediately preceding to the total number of miles of water or steam pipes, gas mains or electric wires operated by such company or municipal utility on said dates; or (ii) in the case of a company required to register pursuant to section 16-258a, such portion of the amount of gross earnings from operations determined under the provisions of section 12-264, as amended by this act, as is represented by the ratio of the sales in this state to end users during such quarter to the total sales everywhere to end users during such quarter.

(c) (1) The rate of tax on the sale, furnishing or distribution of electricity or natural gas for use directly by a company engaged in a manufacturing production process, in accordance with the Standard Industrial Classification Manual, United States Office of Management and Budget, 1987 edition, classifications 2000 to 3999, inclusive, or Sector 31, 32 or 33 in the North American Industrial Classification System United States Manual, United States Office of Management and Budget, 1997 edition, shall be four per cent with respect to calendar quarters commencing on or after January 1, 1994, and prior to January 1, 1995, three per cent with respect to calendar quarters commencing on or after January 1, 1995, and prior to January 1, 1996, and two per cent with respect to calendar quarters commencing on or after January 1, 1996, and prior to January 1, 1997. The sale, furnishing or distribution of electricity or natural gas for use by a company as provided in this subsection shall not be subject to the provisions of this chapter with respect to calendar quarters commencing on or after January 1, 1997. Not later than thirty days after May 19, 1993, and thirty days after the effective date of each rate decrease provided for in this section, each electric and gas public service company, as defined in section 16-1, as amended by this act, which does not have a proposed rate amendment under section 16-19 pending before the Department of Public Utility Control at such time, shall request the department to reopen the proceeding under section 16-19 on the company's most recent rate amendment, solely for the purpose of decreasing the company's rates to reflect the decreases required under this section. The department shall immediately reopen such proceedings, solely for such purpose.

(2) For purposes of this subsection, the sale, furnishing or distribution of natural gas for use as fuel in the operation of a cogeneration facility providing electricity or steam to a company engaged in a manufacturing production process described in subdivision (1) of this subsection shall be deemed to be a sale, furnishing or distribution of natural gas for use directly by such company in such process where such cogeneration facility is located entirely on the premises owned or controlled by such company, whether or not the cogeneration facility is owned or operated by such company.

(d) The rate of tax on the sale, furnishing or distribution of steam for use by a company, as described in subdivision (2) of subsection (a) of section 12-264, as amended by this act, shall be: (1) Four per cent with respect to calendar quarters commencing on or after July 1, 1996, and prior to July 1, 1997; (2) three per cent with respect to calendar quarters commencing on or after July 1, 1997, and prior to July 1, 1998; (3) two per cent with respect to calendar quarters commencing on or after July 1, 1998, and prior to July 1, 1999; and (4) one per cent with respect to calendar quarters commencing on or after July 1, 1999, and prior to July 1, 2000. The sale, furnishing or distribution of steam as provided in this subsection shall not be subject to the provisions of this chapter with respect to calendar quarters commencing on or after July 1, 2000.

Sec. 3. Subdivision (1) of subsection (a) of section 12-213 of the 2006 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2006):

(1) "Taxpayer" and "company" mean any corporation, foreign municipal electric utility, as defined in section 12-59, electric distribution company, as defined in section 16-1, as amended, electric supplier, as defined in section 16-1, as amended, generation entity or affiliate, as defined in section 16-1, as amended, joint stock company or association or any fiduciary thereof and any dissolved corporation which continues to conduct business but does not include a passive investment company or municipal utility, as defined in [chapter 212 and chapter 212a] section 12-265, as amended by this act.

Sec. 4. Section 12-268a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2006):

If the method of apportionment provided for in section 12-251, section 12-258 or section 12-265 unfairly attributes to this state an undue proportion of its business activity, a company or municipal utility, as defined in section 12-265, as amended by this act, may petition for an alternate method of apportionment by filing with its return to the commissioner a statement of its objections and of such proposed other method of apportionment as it believes proper and equitable under the circumstances, accompanied by supporting details and proofs. The commissioner, within a reasonable time thereafter, shall notify the company or municipal utility whether the proposed method is accepted as reasonable and equitable and, if so accepted, shall adjust the return and tax accordingly. With respect to any company [or municipal utility] included in section 12-249, section 12-256 or section 12-264 or municipal utility, as defined in section 12-265, as amended by this act, the commissioner, at any time within three years after the filing by it of a return based on the method of apportionment provided for in section 12-249, section 12-258 or section 12-265, as amended by this act, may change such method if, in his opinion, such method has operated or will operate so as to subject the company or municipal utility to taxation on a lesser portion of its business activity than is properly and equitably attributable to this state, and shall thereupon proceed to assess and collect taxes in accordance with such method as so changed by him.

Sec. 5. Subdivision (1) of subsection (a) of section 12-268c of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2006):

(a) (1) Any company [or municipal utility] included in section 12-249, 12-256 or 12-264 or municipal utility, as defined in section 12-265, as amended by this act, believing that it has overpaid any taxes due under the provisions of chapter 210, 211 or 212 may file a claim for refund in writing with the commissioner within three years from the due date for which such overpayment was made, stating the specific grounds upon which the claim is founded. Failure to file a claim within the time prescribed in this section constitutes a waiver of any demand against the state on account of overpayment. Not later than ninety days following receipt of such claim for refund, the commissioner shall determine whether such claim is valid and, if so, said commissioner shall notify the State Comptroller of the amount of such refund and the State Comptroller shall draw an order on the State Treasurer in the amount thereof for payment to such company or municipal utility. If the commissioner determines that such claim is not valid, either in whole or in part, he shall mail notice of the proposed disallowance in whole or in part of the claim to the claimant, which notice shall set forth briefly the commissioner's findings of fact and the basis of disallowance in each case decided in whole or in part adversely to the claimant. Sixty days after the date on which it is mailed, a notice of proposed disallowance shall constitute a final disallowance except only for such amounts as to which the taxpayer filed, as provided in subdivision (2) of this subsection, a written protest with the commissioner.

Sec. 6. Subsection (a) of section 12-268d of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2006):

(a) If any company [or municipal utility] included in section 12-249, section 12-256 or section 12-264 or municipal utility, as defined in section 12-265, as amended by this act, fails to pay the amount of tax reported to be due on its return within the time specified under the provisions of chapter 210, 211, 212 or this chapter, there shall be imposed a penalty equal to ten per cent of such amount due and unpaid, or fifty dollars, whichever is greater. Such amount shall bear interest at the rate of one per cent per month or fraction thereof, from the due date of such tax until the date of payment.

Sec. 7. (NEW) (Effective July 1, 2006) (a) A municipal electric energy cooperative, created pursuant to chapter 101a of the general statutes, shall submit a comprehensive report on the activities of the municipal electric utilities with regard to promotion of renewable energy resources. Such report shall identify the standards and activities of municipal electric utilities in the promotion, encouragement and expansion of the deployment and use of renewable energy sources within the service areas of the municipal electric utilities for the prior calendar year. The cooperative shall submit the report to the Renewable Energy Investment Advisory Committee established pursuant to section 16-245n of the 2006 supplement to the general statutes not later than ninety days after the end of each calendar year that describes the activities undertaken pursuant to this subsection during the previous calendar year for the promotion and development of renewable energy sources for all electric customer classes.

(b) Such cooperative shall develop standards for the promotion of renewable resources that apply to each municipal electric utility. On or before January 1, 2007, and annually thereafter, such cooperative shall submit such standards to the Renewable Energy Investment Advisory Committee.

Sec. 8. (NEW) (Effective October 1, 2006) (a) Notwithstanding any provision of the general statutes, any (1) new construction of a facility that is projected to cost not less than five million dollars, that is financed with state funds and is approved and funded on or after January 1, 2007, and (2) any renovation of a facility that is projected to cost not less than two million dollars, that is financed with state funds and is approved and funded on or after January 1, 2007, shall comply with the regulations adopted pursuant to subsection (b) of this section. The Secretary of the Office of Policy and Management, in consultation with the Commissioner of Public Works, shall exempt any facility from complying with said regulations if the Institute for Sustainable Energy finds, in a written analysis, that the cost of such compliance significantly outweighs the benefits. For purposes of this section, "facility" means any building, including, but not limited to, a state-financed housing project or a building that is used or intended to be used as a school.

(b) Not later than January 1, 2007, the Secretary of the Office of Policy and Management, in consultation with the Commissioner of Public Works, the Commissioner of Environmental Protection and the Commissioner of Public Safety, shall adopt regulations, in accordance with the provisions of chapter 54 of the general statutes, to adopt building construction standards that are consistent with or exceed the silver building rating of the Leadership in Energy and Environmental Design's rating system for new commercial construction and major renovation projects, as established by the United States Green Building Council, or an equivalent standard, including, but not limited to, a two-globe rating in the Green Globes USA design program, and thereafter update such regulations as the secretary deems necessary.

Sec. 9. Section 10-286 of the 2006 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2006):

(a) The amount of the grant approved by the Commissioner of Education under the provisions of this chapter for any completed school building project shall be computed as follows:

(1) For the fiscal year ending June 30, 1984, and each fiscal year thereafter, in the case of a new school plant, an extension of an existing school building or projects involving the major alteration of any existing building to be used for school purposes, the eligible percentage, as determined in section 10-285a, as amended, of the result of multiplying together the number representing the highest projected enrollment, based on data acceptable to the Commissioner of Education, for such building during the eight-year period from the date a local or regional board of education files a notification of a proposed school building project with the Department of Education, the number of gross square feet per pupil determined by the Commissioner of Education to be adequate for the kind of educational program or programs intended, and the eligible cost of such project, divided by the gross square feet of such building, or the eligible percentage, as determined in section 10-285a, as amended, of the eligible cost of such project, whichever is less, provided, (A) any such project on which construction was started prior to July 1, 1975, shall be reimbursed under the formula in effect prior to said date, (B) any such project on which construction or payments under this chapter were started after June 30, 1975, but prior to July 31, 1983, shall be reimbursed based upon the data, submitted for each such project and accepted by the Department of Education during said period, representing the number of pupils the plant was designed to accommodate, (C) any project for which final grant calculation has been made after June 30, 1975, but prior to July 31, 1983, shall be reimbursed based upon such final calculation, and (D) any such project for which estimated grant payments were begun prior to July 31, 1983, shall be reimbursed based upon the calculation formula used in making such estimated grant payments;

(2) In case of projects involving the purchase of an existing building to be used for school purposes, the eligible percentage, as determined in section 10-285a, as amended, of the eligible cost as determined by the Commissioner of Education, provided any project for which an application is made on or after July 1, 1995, involving the purchase and renovation of an existing facility, may be exempt from the standard space specifications, and otherwise ineligible repairs and replacements may be considered eligible for reimbursement as part of such a project, if information is provided acceptable to the commissioner documenting the need for such work and the cost savings to the state and the school district of such purchase and renovation project in comparison to alternative construction options;

(3) If any school building project described in subdivisions (1) and (2) of this subsection includes the construction, extension or major alteration of outdoor athletic facilities, tennis courts or a natatorium, gymnasium or auditorium, the grant for the construction of such outdoor athletic facilities, tennis courts and natatorium shall be limited to one-half of the eligible percentage for subdivisions (1) and (2) of the net eligible cost of construction thereof; the grant for the construction of an area of spectator seating in a gymnasium shall be one-half of the eligible percentage for subdivisions (1) and (2) of the net eligible cost of construction thereof; and the grant for the construction of the seating area in an auditorium shall be limited to one-half of the eligible percentage for subdivisions (1) and (2) of the net eligible cost of construction of the portion of such area that seats one-half of the projected enrollment of the building, as defined in subdivision (1) of this subsection, which it serves;

(4) In the case of a regional vocational agriculture center or the purchase of equipment pursuant to subsection (a) of section 10-65 or a regional special education facility pursuant to section 10-76e, an amount equal to the eligible cost of such project, as determined by the Commissioner of Education;

(5) In the case of a public school administrative or service facility, one-half of the eligible percentage for subdivisions (1) and (2) of this subsection of the eligible project cost as determined by the Commissioner of Education, or in the case of a regional educational service center administrative or service facility, the eligible percentage, as determined pursuant to subsection (c) of section 10-285a, as amended, of the eligible project cost as determined by the commissioner;

(6) In the case of the total replacement of a roof or the total replacement of a portion of a roof which has existed for at least twenty years, or in the case of the total replacement of a roof or the total replacement of a portion of a roof which has existed for fewer than twenty years when it is determined by a registered architect or registered engineer that such roof was improperly designed or improperly constructed and the town is prohibited from recovery of damages or has no other recourse at law or in equity, the eligible percentage for subdivisions (1) and (2) of this subsection, of the eligible cost as determined by the Commissioner of Education. In the case of the total replacement of a roof or the total replacement of a portion of a roof which has existed for fewer than twenty years (A) when it is determined by a registered architect or registered engineer that such roof was improperly designed or improperly constructed and the town has recourse at law or in equity and recovers less than such eligible cost, the eligible percentage for subdivisions (1) and (2) of this subsection of the difference between such recovery and such eligible cost, and (B) when the roof is at least fifteen years old but less than twenty years old and it cannot be determined by a registered architect or registered engineer that such roof was improperly designed or improperly constructed, the eligible percentage for subdivisions (1) and (2) of this subsection of the eligible project costs provided such costs are multiplied by the ratio of the age of the roof to twenty years. For purposes of this subparagraph, the age of the roof shall be determined in whole years to the nearest year based on the time between the completed installation of the old roof and the date of the grant application for the school construction project for the new roof;

(7) For the fiscal year ending June 30, 1984, and for each fiscal year thereafter, in the case of projects to correct code violations, the eligible percentage, as determined in section 10-285a, as amended, of the eligible cost as determined by the Commissioner of Education;

(8) In the case of a renovation project for which an application is made on or after July 1, 1995, the eligible percentage as determined in subsection (b) of section 10-285a, as amended, multiplied by the eligible costs as determined by the commissioner, provided the project may be exempt from the standard space specifications, and otherwise ineligible repairs and replacements may be considered eligible for reimbursement as part of such a project, if information is provided acceptable to the commissioner documenting the need for such work and the cost savings to the state and the school district of such renovation project in comparison to alternative construction options;

(9) In the case of projects approved to remedy certified school indoor air quality emergencies, the eligible percentage, as determined in section 10-285a, as amended, of the eligible cost as determined by the Commissioner of Education;

(10) On or after January 1, 2007, in the case of a construction of a school building that is projected to cost not less than five million dollars that is consistent with or exceeds the building construction standards developed pursuant to subsection (b) of section 4 of this act, or for the renovation of a school building that is projected to cost not less than two million dollars that complies with said standards, one hundred per cent of the costs of construction or renovation that are attributable to conforming the construction or renovation to said standards, as determined by the commissioner, in consultation with the Secretary of the Office of Policy and Management.

(b) (1) In the case of all grants computed under this section for a project which constitutes a replacement, extension or major alteration of a damaged or destroyed facility, no grant may be paid if a local or regional board of education has failed to insure its facilities and capital equipment in accordance with the provisions of section 10-220. The amount of financial loss due to any damage or destruction to any such facility, as determined by ascertaining the replacement value of such damage or destruction, shall be deducted from project cost estimates prior to computation of the grant.

(2) In the case of any grants computed under this section for a school building project authorized pursuant to section 10-283 after July 1, 1979, any federal funds or other state funds received for such school building project shall be deducted from project costs prior to computation of the grant.

(3) The limitation on grants for new outdoor athletic facilities, tennis courts, natatorium, gymnasium and auditorium shall not apply to school building projects for which applications for review of preliminary plans and specifications on Form 2A were submitted prior to October 1, 1975, in the case of towns and prior to October 15, 1975, in the case of regional school districts.

(4) Commencing with the school construction projects authorized by the General Assembly during the fiscal year ending June 30, 1985, and for all such projects so authorized thereafter, the calculation of grants pursuant to this section shall be made in accordance with the state standard space specifications in effect at the time of the final grant calculation, except that on and after July 1, 2005, in the case of a school district with an enrollment of less than one hundred fifty students in grades kindergarten to grade eight, inclusive, state standard space specifications shall not apply in the calculation of grants pursuant to this section and the Commissioner of Education may modify the standard space specifications for a project in such district.

(c) In the computation of grants pursuant to this section for any school building project authorized by the General Assembly pursuant to section 10-283 after January 1, 1993, any maximum square footage per pupil limit established pursuant to this chapter or any regulation adopted by the State Board of Education pursuant to this chapter shall be increased by twenty-five per cent for a building constructed prior to 1950, except that a board of education may apply to the department by June 30, 2002, for use of such increased percentage for a building constructed prior to July 1, 1951.

(d) In the computation of grants pursuant to this section for any school building project authorized by the General Assembly pursuant to section 10-283 after January 1, 2004, any maximum square footage per pupil limit established pursuant to this chapter or any regulation adopted by the State Board of Education pursuant to this chapter shall be increased by up to one per cent to accommodate a heating, ventilation or air conditioning system, if needed.

Sec. 10. Subdivision (16) of subsection (a) of section 16a-48 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2006):

(16) "Commercial refrigerators and freezers" means reach-in cabinets, pass-through cabinets, roll-in cabinets and roll-through cabinets that have less than eighty-five feet of capacity [. "Commercial refrigerators and freezers" does not include walk-in models or consumer products regulated under the federal National Appliance Energy Conservation Act of 1987] designed for the refrigerated or frozen storage of food and food products.

Sec. 11. Subsection (a) of section 16a-48 of the general statutes is amended by adding subdivisions (23) to (41), inclusive, as follows (Effective October 1, 2006):

(NEW) (23) "Electricity ratio" means the ratio of furnace electricity use to total furnace energy use;

(NEW) (24) "Boiler" means a space heater that is a self-contained appliance for supplying steam or hot water primarily intended for space-heating. "Boiler" does not include hot water supply boilers;

(NEW) (25) "Central furnace" means a self-contained space heater designed to supply heated air through ducts of more than ten inches in length;

(NEW) (26) "Residential furnace or boiler" means a product that utilizes only single-phase electric current, or single-phase electric current or DC current in conjunction with natural gas, propane or home heating oil, and which (A) is designed to be the principal heating source for the living space of a residence; (B) is not contained within the same cabinet with a central air conditioner with a rated cooling capacity of not less than 65,000 BTUs per hour; (C) is an electric central furnace, electric boiler, forced-air central furnace, gravity central furnace, or low pressure steam or hot water boiler; and (D) has a heat input rate of less than 300,000 BTUs per hour for electric boilers and low pressure steam or hot water boilers and less than 225,000 BTUs per hour for forced-air central furnaces, gravity central furnaces and electric central furnaces;

(NEW) (27) "Furnace air handler" means the section of the furnace that includes the fan, blower and housing, generally upstream of the burners and heat exchanger. The furnace air handler may include a filter and a cooling coil;

(NEW) (28) "High-intensity discharge lamp" means a lamp in which light is produced by the passage of an electric current through a vapor or gas, and in which the light-producing arc is stabilized by bulb wall temperature and the arc tube has a bulb wall loading in excess of three watts per square centimeter;

(NEW) (29) "Medium voltage dry-type distribution transformer" means a transformer that (A) has an input voltage of not less than 600 volts but not more than 34,400 volts; (B) is air-cooled; (C) does not use oil as a coolant; and (D) is rated for operation at a frequency of 60 Hertz. "Medium voltage dry-type distribution transformer" does not mean devices with multiple voltage taps, with the highest voltage tap not less than twenty per cent more than the lowest voltage tap, or devices that are designed to be used in a special purpose application and are unlikely to be used in general purpose applications including drive transformers, rectifier transformers, auto transformers, uninterruptible power system transformers, impedence transformers, regulating transformers, sealed and nonventilating transformers, machine tool transformers, welding transformers, grounding transformers or testing transformers;

(NEW) (30) "Metal halide lamp" means a high intensity discharge lamp in which the major portion of the light is produced by radiation of metal halides and their products of dissociation, possibly in combination with metallic vapors;

(NEW) (31) "Metal halide lamp fixture" means a light fixture designed to be operated with a metal halide lamp and a ballast for a metal halide lamp;

(NEW) (32) "Probe start metal halide ballast" means a ballast used to operate metal halide lamps that does not contain an ignitor and that instead starts lamps by using a third starting electrode probe in the arc tube;

(NEW) (33) "Single voltage external AC to DC power supply" means a device that (A) is designed to convert line voltage AC input into lower voltage DC output; (B) is able to convert to only one DC output voltage at a time; (C) is sold with, or intended to be used with, a separate end-use product that constitutes the primary power load; (D) is contained within a separate physical enclosure from the end-use product; (E) is connected to the end-use product in a removable or hard-wired male and female electrical connection, cable, cord or other wiring; (F) does not have batteries or battery packs, including those that are removable or that physically attach directly to the power supply unit; (G) does not have a battery chemistry or type selector switch and indicator light, or does not have a battery chemistry or type selector switch and a state of charge meter; and (H) has a nameplate output power less than or equal to 250 watts;

(NEW) (34) "State regulated incandescent reflector lamp" means a lamp that is not colored or designed for rough or vibration service applications, that has an inner reflective coating on the outer bulb to direct the light, and E26 medium screw base, and a rated voltage or voltage range that lies at least partially within 115 to 130 volts, and that falls into one of the following categories: (A) A bulged reflector or elliptical reflector or a blown PAR bulb shape and that has a diameter that equals or exceeds 2.25 inches, or (B) a reflector, parabolic aluminized reflector, bulged reflector or similar bulb shape and that has a diameter of 2.25 to 2.75 inches. "State regulated incandescent reflector lamp" does not include ER30, BR30, BR40 and ER40 lamps of not more than fifty watts, BR30, BR40 and ER40 lamps of sixty-five watts and R20 lamps of not more than forty-five watts;

(NEW) (35) "Bottle-type water dispenser" means a water dispenser that uses a bottle or reservoir as the source of potable water;

(NEW) (36) "Commercial hot food holding cabinet" means a heated, fully-enclosed compartment with one or more solid or partial glass doors that is designed to maintain the temperature of hot food that has been cooked in a separate appliance. "Commercial hot food holding cabinet" does not include heated glass merchandizing cabinets, drawer warmers or cook-and-hold appliances;

(NEW) (37) "Pool heater" means an appliance designed for heating nonpotable water contained at atmospheric pressure for swimming pools, spas, hot tubs and similar applications, including natural gas, heat pump, oil and electric resistance pool heaters;

(NEW) (38) "Portable electric spa" means a factory-built electric spa or hot tub, supplied with equipment for heating and circulating water;

(NEW) (39) "Residential pool pump" means a pump used to circulate and filter pool water in order to maintain clarity and sanitation;

(NEW) (40) "Walk-in refrigerator" means a space refrigerated to temperatures at or above thirty-two degrees Fahrenheit that can be walked into and is designed for the refrigerated storage of food and food products;

(NEW) (41) "Walk-in freezer" means a space refrigerated to temperatures below thirty-two degrees Fahrenheit that can be walked into and is designed for the frozen storage of food and food products.

Sec. 12. Subdivision (1) of subsection (d) of section 16a-48 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2006):

(d) (1) [Not later than July 1, 2005, the] The department, in consultation with the secretary, shall adopt regulations, in accordance with the provisions of chapter 54, to implement the provisions of this section and to establish minimum energy efficiency standards for the types of new products set forth in subsection (b) of this section. The regulations shall provide for the following minimum energy efficiency standards:

(A) Commercial clothes washers shall meet the requirements shown in Table P-3 of section 1605.3 of the California Code of Regulations, Title 20: Division 2, Chapter 4, Article 4;

(B) [commercial] Commercial refrigerators and freezers shall meet the August 1, 2004, requirements shown in Table A-6 of [said California regulation] the California Code of Regulations, Title 20: Division 2, Chapter 4, Article 4;

(C) [illuminated] Illuminated exit signs shall meet the version 2.0 product specification of the "Energy Star Program Requirements for Exit Signs" developed by the United States Environmental Protection Agency;

(D) [large] Large packaged air-conditioning equipment having not more than 760,000 BTUs per hour of capacity shall meet a minimum energy efficiency ratio of 10.0 for units using both electric heat and air conditioning or units solely using electric air conditioning, and 9.8 for units using both natural gas heat and electric air conditioning;

(E) [large] Large packaged air-conditioning equipment having not less than 761,000 BTUs per hour of capacity shall meet a minimum energy efficiency ratio of 9.7 for units using both electric heat and air conditioning or units solely using electric air conditioning, and 9.5 for units using both natural gas heat and electric air conditioning;

(F) [low] Low voltage dry-type distribution transformers shall meet or exceed the energy efficiency values shown in Table 4-2 of the National Electrical Manufacturers Association Standard TP-1-2002;

(G) [torchiere] Torchiere lighting fixtures shall not consume more than 190 watts and shall not be capable of operating with lamps that total more than 190 watts;

(H) [traffic] Traffic signal modules shall meet the product specification of the "Energy Star Program Requirements for Traffic Signals" developed by the United States Environmental Protection Agency that took effect in February, 2001, except where the department, in consultation with the Commissioner of Transportation, determines that such specification would compromise safe signal operation;

(I) [unit] Unit heaters shall not have pilot lights and shall have either power venting or an automatic flue damper;

(J) On or after January 1, 2008, residential furnaces and boilers purchased by the state shall meet or exceed the following annual fuel utilization efficiency: (i) For gas and propane furnaces, ninety per cent annual fuel utilization efficiency, (ii) for oil furnaces, eighty-three per cent annual fuel utilization efficiency, (iii) for gas and propane hot water boilers, eighty-four per cent annual fuel utilization efficiency, (iv) for oil-fired hot water boilers, eighty-four per cent annual fuel utilization efficiency, (v) for gas and propane steam boilers, eighty-two per cent annual fuel utilization efficiency, and (vi) for oil-fired steam boilers, eighty-two per cent annual fuel utilization efficiency;

(K) On or after January 1, 2008, furnace air handlers purchased by the state shall have an electricity ratio of not more than 2.0, except air handlers for oil furnaces with a capacity of less than 94,000 BTUs per hour shall have an electricity ratio of 2.3 or less;

(L) On or after January 1, 2008, medium voltage dry-type distribution transformers shall meet minimum efficiency levels three-tenths of a percentage point higher than the Class 1 efficiency levels for medium voltage distribution transformers specified in Table 4-2 of the "Guide for Determining Energy Efficiency for Distribution Transformers" published by the National Electrical Manufacturers Association;

(M) On or after January 1, 2008, metal halide lamp fixtures manufactured with lamps rated greater than or equal to 150 watts but less than or equal to 500 watts shall not contain a probe-start metal halide lamp ballast in the vertical base up or vertical base down position only;

(N) On or after January 1, 2008, single-voltage external AC to DC power supplies shall meet the tier one energy efficiency requirements of section 1605.3 of the January 2006 California Code of Regulations, Title 20, Division 2, Chapter 4, Article 4: Appliance Efficiency Regulations. This standard applies to single voltage AC to DC power supplies that are sold individually and to those that are sold as a component of or in conjunction with another product;

(O) On or after January 1, 2008, state regulated incandescent reflector lamps shall be manufactured to meet the minimum average lamp efficacy requirements for federally-regulated incandescent reflector lamps contained in 43 USC 6295 (i)(1)(A);

(P) On or after January 1, 2008, bottle-type water dispensers, commercial hot food holding cabinets, portable electric spas, walk-in refrigerators and walk-in freezers shall meet the efficiency requirements of section 1605.3 of the January 2006 California Code of Regulations, Title 20, Division 2, Chapter 4, Article 4: Appliance Efficiency Regulations. On or after January 1, 2010, residential pool pumps shall meet said efficiency requirements;

(Q) On or after January 1, 2008, pool heaters shall meet the efficiency requirements of sections 1605.1 and 1605.3 of the January 2006 California Code of Regulations, Title 20, Division 2, Chapter 4, Article 4: Appliance Efficiency Regulations.

Sec. 13. Section 4a-67c of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2006):

The Department of Administrative Services and each other budgeted agency, as defined in section 4-69, exercising procurement authority shall procure equipment and appliances for state use which meet or exceed the federal energy conservation standards set forth in the Energy Policy and Conservation Act, 42 USC 6295, any federal regulations adopted thereunder, [and] any applicable energy performance standards established in accordance with subsection (j) of section 16a-38 and meet the federal Energy Star standards. Purchases of equipment and appliances for which energy performance standards have been established pursuant to subsection (j) of section 16a-38 shall be (1) made from among those specific models of equipment and appliances which meet such standards, and (2) based, when possible, on competitive bids. Such bids shall be evaluated on the basis of the life-cycle cost standards, if any, established pursuant to subsection (b) of section 16a-38.

Sec. 14. Subdivision (44) of subsection (a) of section 16-1 of the 2006 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2006):

(44) "Class III renewable energy source" means the electricity output from combined heat and power systems with an operating efficiency level of no less than fifty per cent that are part of customer-side distributed resources developed at commercial and industrial facilities in this state on or after January 1, 2006, or the electricity savings [created at commercial and industrial facilities in this state from] conservation and load management programs and measures begun on or after January 1, 2006, provided residential customers may receive credit for said programs and measures financed by the Conservation and Load Management Fund pursuant to section 16-245m, as amended.

Sec. 15. Subsection (e) of section 16-243q of the 2006 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2006):

(e) The Department of Public Utility Control shall conduct a contested proceeding to develop the administrative processes and program specifications that are necessary to implement a Class III conservation and distributed resources trading program. The proceeding shall include, but not be limited to, an examination of issues such as (1) the manner in which qualifying activities are certified, tracked and reported, (2) the manner in which Class III certificates are created, accounted for and transferred, [(3) the feasibility and benefits of expanding eligible Class III resources to include those resulting from electricity savings made by residential customers, (4)] (3) verification of the accuracy of conservation and customer-side distributed resources credits, [(5)] (4) verification of the fact that resources or credits used to satisfy the requirement of this section have not been used to satisfy any other portfolio or similar requirement, [(6)] (5) the manner in which credits created by conservation and customer-side distributed resources may best be allocated to maximize the impact of the trading program, and [(7)] (6) setting such alternative payment amounts at a level that encourages development of conservation and customer-side distributed resources. The department may retain the services of a third party entity with expertise in the development of energy efficiency trading or verification programs to assist in the development and operation of the program. The department shall issue a decision no later than February 1, [2006] 2007.

Statement of Legislative Commissioners:

Changes were made to sections 1 and 2 for purposes of clarity and consistency and sections 3 to 6 were added to make conforming changes.

The following fiscal impact statement and bill analysis are prepared for the benefit of members of the General Assembly, solely for the purpose of information, summarization, and explanation, and do not represent the intent of the General Assembly or either House thereof for any purpose:

OFA Fiscal Note

State Impact:

Note: GF=General Fund; TF=Transportation Fund

Municipal Impact:

Explanation

The bill requires the Secretary of the Office of Policy and Management (OPM), in consultation with the Commissioners of the Department of Environmental Protection and Public Safety, to adopt building construction standards that are consistent with or exceed the standards as established by the United States Green Building Council (USGBC) The bill also allows OPM, in consultation with the Department of Public Works (DPW), to exempt any buildings from the new regulations when the cost of compliance significantly outweighs the benefits. Therefore, it is anticipated that these additional construction costs will only be incurred in cases where the operational savings exceed the cost, over the life of the building. It is anticipated that OPM will incur minimal costs from adopting regulations and performing cost/benefit analyses of new construction projects. The Department of Environmental Protection, the Department of Public Safety and the Department of Public Works will incur a minimal workload increase due to consultations, which are anticipated to be within existing resources.

The bill requires that buildings costing $5 million or more to construct or renovation projects costing $2 million or more for which state funds are used must comply with the building standards adopted by OPM. This is expected to result in net savings to the state in future years that are potentially significant. Increases in capital construction costs for new buildings would be offset by savings in the operating costs of these buildings over their lifetime. Based on DPW's experience with 4 projects undertaken in the past year, the anticipated cost differential of doing a major building project under USGBC standards is anticipated to increase total project costs by less than 1%. There will also be some additional costs for conducting the mandatory “building commissioning” at the end of construction, which are estimated to be between $100,000 and $200,000 for a major project. Since building construction is financed with bond funds, any increase in construction costs would result in an increase in General Fund and Transportation Fund debt service costs.

The additional construction costs could be offset by savings in the operations of the new buildings over their lifetime, especially in heating and ventilation costs. These savings are estimated by industry sources to be up to 30% of annual utility costs. Any General Fund operating budget savings would be achieved through the Department of Public Works, the Judicial Department, the University of Connecticut and any agency with care and control if its buildings. Any Transportation Fund operating budget savings would be achieved through the Department of Transportation and the Department of Motor Vehicles.

In the case of school construction projects, passage of this bill could substantially increase the state's costs for projects. Based on recent school construction trends costs could range between $7.5 and $15 million per year. It should be noted that the operating cost savings for these buildings would accrue to the municipalities. Since school construction projects are financed with General Fund bond funds, any increase in construction costs would result in an increase in General Fund debt service costs. (The state normally provides between 20% and 80% of the construction cost for school building projects and magnet schools receive 95% reimbursement. )

The bill also requires equipment and appliances bought by the Department of Administrative Services and other agencies to comply with federal Energy Star standards. This provision will result in a minimal increase in new equipment costs but over the life-cycle of the product the state may realize a savings based on the energy efficiency of these products.

In addition the bill will result in a revenue loss to the General Fund from the Gross Earnings Tax of approximately $2.6 million annually beginning in FY 08.

Municipal

The bill establishes the same requirements for all new construction of buildings when state funds are used. OPM, in consultation with DPW, would be able to exempt any buildings from these new standards when the cost of compliance significantly outweighs the benefits. Therefore, the increases in school construction costs for towns would be offset by potentially significant savings in the operating costs of these buildings over their lifetime. It is a State Mandate since it would increase capital construction costs.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.



OLR Bill Analysis

sHB 5688

AN ACT CONCERNING ENERGY EFFICIENCY AND ELECTRIC DEREGULATION AND THE GROSS RECEIPTS TAX.

SUMMARY:

This bill requires construction projects financed by the state on or after January 1, 2007 to meet specified energy/environmental standards. The requirement applies to new buildings (including schools) costing $5 million or more and renovation projects costing $2 million or more. In the case of schools, if complying with this requirement increases the project's capital cost, the bill requires the state to pay 100% of the difference, as determined by the education commissioner in consultation with the secretary of the Office of Policy and Management (OPM), under the school construction grant

The bill establishes energy efficiency standards for several appliances and equipment.

It establishes energy efficiency standards for residential furnaces and related products bought by the state on or after January 1, 2008. It requires equipment and appliances bought by the Department of Administrative Services and other procurement agencies to comply with federal Energy Star standards

The bill modifies how the gross earnings tax is calculated for municipal electric utilities. Currently, these utilities pay a tax of 4% of their gross receipts from their residential customers and 5% on their nonresidential customers. The bill instead requires the utilities to pay a tax of 6.8% of their gross receipts from transmitting power to residential customers and 8.5% on their nonresidential transmission revenues (i.e., their revenues from generating power would not be subject to the tax). The latter rates currently apply to electric companies.

The bill also requires the Connecticut Municipal Electric Energy Cooperative (CMEEC) to adopt standards regarding the promotion of renewable energy and file a report with the Renewable Energy Investment Fund Advisory Committee. CMEEC procures power for municipal electric utilities in the state, among other things.

The bill broadens what counts as Class III renewable resources. By law, electric companies and competitive suppliers must meet part of their demand from “Class III renewable resources.” Under current law, these resources are (1) electricity produced by systems that produce heat and power that are developed at commercial and industrial facilities and (2) electricity savings from conservation and load management programs at these facilities that begin on or after January 1, 2006. The bill expands the latter provision by counting (1) electricity savings from conservation and load management measures that began on or after January 1, 2006 and (2) savings produced by residential customers, so long as they resulted from programs and measures funded by the Conservation and Load Management Fund.

The bill delays, from February 1, 2006 to February 1, 2007, the Department of Public Utility Control's deadline for concluding a proceeding establishing the administrative process for implementing a Class III credit trading program. Under this program, companies and suppliers who exceed the Class III requirements will earn credits, which they can sell to other companies and suppliers who have not met their requirements. The bill also deletes a requirement that the proceeding address the feasibility and benefits of expanding Class III resources to include electricity savings achieved by residential customers.

EFFECTIVE DATES: The tax rate change provisions are generally effective July 1, 2006 (see COMMENT) and the other provisions are effective October 1, 2006.

§ 8 — STANDARDS FOR STATE-FUNDED BUILDINGS

This bill requires buildings, including schools and housing projects, funded by the state on or after January 1, 2007 to meet specified energy and environmental standards for new construction projects costing $5 million or more and renovation projects $2 million or more. By January 1, 2007, the OPM secretary, in consultation with the public works, environmental protection, and public safety commissioners, must adopt regulations adopting construction standards that meet or exceed the silver building rating of the Leadership in Energy and Environmental Design's (LEED) rating system for new commercial construction and major renovation projects or an equivalent standard. The alternative standard must at least include a two globe rating under the Green Globes USA design program. The secretary must update the regulations as he considers necessary. The secretary, in consultation with public works commissioner, must exempt a facility from the regulations if the Institute for Sustainable Energy finds, in a written analysis, that the cost of compliance significantly outweighs the benefits of compliance.

Both rating systems give projects points for their environmental characteristics, such energy and water efficiency, and use of recycled materials and renewable energy. Based on the number of points a project receives, it can be given a silver, gold, or platinum award under the LEED system and one to four globes under the Green Globes system.

§ 10 — ENERGY EFFICIENCY

Appliance and Equipment Efficiency Standards

The bill establishes efficiency standards for the following products. The standards go into effect January 1, 2008, except for the standard for electric pool pumps, which goes into effect on January 1, 2010.

TABLE 1: APPLIANCE AND EQUIPMENT ENERGY EFFICIENCY STANDARDS

The bill also prohibits, starting January 1, 2008, metal halide lamp fixtures manufactured with 150 to 500 watt lamps from containing a device called a probe-start ballast in the vertical base up or vertical base down position only. This device starts lamps by using a third starting electrode probe in the arc tube.

Under current law, state energy efficiency standards for commercial refrigerators and freezers do not include walk-in models or products regulated under federal law. The bill eliminates these exceptions and specifies that the standards apply to appliances that are designed for the refrigerated or frozen storage of food or food products. As noted above, the bill establishes specific standards for walk-in models.

State-Purchased Furnaces, Boilers, and Air Handlers

The bill establishes efficiency standards for furnace air handlers (the part of a furnace that includes the fan, blower and housing) and residential furnaces and boilers (other than hot water boilers) bought by the state on or after January 1, 2008. Under the bill, furnace air handlers must have an electricity ratio of 2.0 or less, except that handlers for small oil furnaces (less than 94,000 British Thermal Units per hour) can have an electricity ratio of up to 2.3. The electricity ratio is the ratio of furnace electricity use to total furnace energy use.

Under the bill (1) residential gas and propane furnaces must have an annual fuel use efficiency (AFUE) of 90%; (2) oil furnaces must have an AFUE of 83%; (3) gas, oil, and propane hot water boilers must have an AFUE of 84%; (4) oil-fired hot water boilers must have an AFUE of 84%; and, (5) gas, oil, and propane steam boilers must have an AFUE of 82%. The bill's standards apply to furnaces and boilers that use only single-phase electric current, or single-phase electric current or DC current in conjunction with natural gas, propane or home heating oil. The furnace or boiler must (1) be designed to be the principal heating source for the living space of a residence; (2) not be contained within the same cabinet with a central air conditioner with a rated cooling capacity of not less than 65,000 BTUs per hour; (3) be an electric central furnace, electric boiler, forced-air central furnace, gravity central furnace, or low pressure steam or hot water boiler; and (D) have a heat input rate of less than 300,000 BTUs per hour for electric boilers and low pressure steam or hot water boilers and less than 225,000 BTUs per hour for forced-air central furnaces, gravity central furnaces and electric central furnaces. The bill applies to central furnaces that supply heated air through ducts of more than 10 inches in length.

§ 7 — CONNECTICUT MUNICIPAL ELECTRIC ENERGY COOPERATIVE

The bill requires CMEEC to develop standards for the promotion of renewable resources that apply to each municipal electric utility in the state. By January 1 annually, starting in 2007, CMEEC must submit the standards to the Renewable Energy Investment Advisory Committee. This committee advises Connecticut Innovations, Inc., which administers the Renewable Energy Investment Fund.

The bill also requires CMEEC to submit a comprehensive report to the committee on the activities of municipal electric utilities regarding the promotion of renewable energy resources. The report must identify the utilities' standards and activities in the promotion, encouragement, expanded deployment and use of renewable resources in the previous calendar year in the utilities' service territories. CMEEC must submit the report to the committee within 90 days after the end of the calendar year. The report must cover renewable energy promotion and development activities for all customer classes.

COMMENT

Inconsistent Effective Dates for Tax Changes

The bill has contradictory provisions regarding the tax rates applicable to municipal electric utilities due to inconsistent effective dates. Section 1 makes the tax rate that applies to municipal utilities, effective July 1, 2006, the same as the rate that currently applies to electric companies (6.8% on residential transmission services and 8.5% on non-residential transmission services). However, Section 2 does not become effective until July 1, 2007. Until then, under this section, the current tax rate (4% on all residential services and 5% on all non-residential services) will continue to apply. In addition, Section 2 defines the term “municipal utility” which is used in Sections 3 – 6 even though those sections go into effect one year earlier on July 1, 2006.

COMMITTEE ACTION

Energy and Technology Committee

Joint Favorable Substitute Change of Reference

Finance, Revenue and Bonding Committee

Joint Favorable Substitute