File No. 199

House of Representatives, March 29, 2007

The Committee on Energy and Technology reported through REP. FONTANA, S. of the 87th Dist., Chairperson of the Committee on the part of the House, that the substitute bill ought to pass.

AN ACT CONCERNING CONNECTICUT'S ENERGY POLICY.

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

Section 1. (NEW) (Effective from passage) (a) There is hereby established and created a body politic and corporate, constituting a public instrumentality and political subdivision of the state of Connecticut established and created for the performance of an essential public and governmental function, to be known as the Connecticut Electricity Procurement Authority. The authority shall not be construed to be a department, institution or agency of the state.

(b) The powers of the authority shall be vested in and exercised by a board of directors, which shall consist of seven directors as follows: (1) The Commissioner of Social Services, (2) the Secretary of the Office of Policy and Management, (3) the Commissioner of Environmental Protection, (4) the Consumer Counsel, (5) a director appointed by the Governor, (6) a director appointed by the president pro tempore of the Senate, and (7) a director appointed by the speaker of the House of Representatives. No director may be a member of the General Assembly. The appointed directors shall serve for terms of four years each and shall have education or expertise in the area of finance or law. Any appointed director who fails to attend three consecutive meetings of the board or who fails to attend fifty per cent of all meetings of the board held during any calendar year shall be deemed to have resigned from the board. Any vacancy occurring other than by expiration of term shall be filled in the same manner as the original appointment for the balance of the unexpired term. At its first meeting, the board shall elect a chairperson.

(c) The chairperson shall, with the approval of the directors, appoint a president of the authority who shall be an employee of the authority and paid a salary prescribed by the directors. The president shall supervise the administrative affairs and technical activities of the authority in accordance with the directives of the board.

(d) Directors may engage in private employment, or in a profession or business, subject to any applicable laws, rules and regulations of the state or federal government regarding official ethics or conflict of interest.

(e) Three directors of the authority shall constitute a quorum for the transaction of any business or the exercise of any power of the authority. For the transaction of any business or the exercise of any power of the authority, and except as otherwise provided in sections 1 to 12, inclusive, of this act, the authority shall have power to act by a majority of the directors present at any meeting at which a quorum is in attendance.

(f) Appointed directors may not designate a representative to perform in their absence their respective duties under sections 1 to 12, inclusive, of this act.

(g) The term "director", as used in this section, shall include such persons so designated as provided in this section and this designation shall be deemed temporary only and shall not affect any applicable civil service or retirement rights of any person so designated.

(h) The authority shall continue as long as it has bonds or other obligations outstanding and until its existence is terminated by law. Upon the termination of the existence of the authority, all its rights and properties shall pass to and be vested in the state of Connecticut.

(i) The directors, members and officers of the authority and any person executing the bonds or notes of the authority shall not be liable personally on such bonds or notes or be subject to any personal liability or accountability by reason of the issuance thereof, nor shall any director, member or officer of the authority be personally liable for damage or injury, not wanton or wilful, caused in the performance of such person's duties and within the scope of such person's employment or appointment as such director, member or officer.

Sec. 2. (NEW) (Effective from passage) (a) On or before January 1, 2008, the Connecticut Electricity Procurement Authority established pursuant to section 1 of this act shall issue a request for proposals for the purpose of procuring electricity for senior citizens, sixty-two years of age or older, and physically disabled or blind citizens, as defined in section 1-1f of the general statutes, who are recipients of benefits under either the Connecticut Energy Assistance Program or the Contingency Heating Assistance Program and who choose such option pursuant to section 16-244b of the general statutes, as amended by this act.

(b) The authority shall award contracts only to proposers whose generation services charges are at least ten per cent lower than the lower of the electric distribution companies' generation services charge the authority's customers would otherwise be subject to under standard service for the same period.

(c) Any contracts awarded pursuant to subsection (a) of this section shall commence on or before January 1, 2008.

Sec. 3. (NEW) (Effective from passage) The directors of the Connecticut Electricity Procurement Authority shall meet at least monthly at the call of the chairperson and may meet more frequently, if necessary and desirable. The first meeting shall be held on or before May 1, 2007. The directors shall maintain at all times minutes of its meetings including the authority's considerations, deliberations, decisions and resolutions, which minutes shall be considered public records. The authority shall maintain all necessary records and data with respect to its operations and shall report annually to the Governor and the General Assembly, upon its operations. Such reports shall include, but not be limited to, a report on the request for proposals, a listing of the contracts entered into for the procurement of electricity; a listing of the outstanding issues of notes and bonds of the authority and the payment status thereof; a budget showing the administrative expenses of the authority; and a report of revenues of the authority from all sources and of the redistribution of any surplus revenues. The authority shall be subject to audit by the Auditors of Public Accounts in accordance with normal auditing practices prescribed for departments, boards, commissions and other agencies of the state.

Sec. 4. (NEW) (Effective from passage) The Connecticut Electricity Procurement Authority shall make the following information available to the public through the Internet, except for any such information which is not required to be disclosed to the public pursuant to the Freedom of Information Act, as defined in section 1-200 of the general statutes:

(1) The schedule of meetings of the board of directors of the authority and each committee established by said board, not later than seven days after such schedule is established;

(2) Draft minutes of each meeting of the board of directors of the authority and each committee established by said board, not later than seven days after each such meeting is held;

(3) An annual plan of operations, not later than seven days after the plan is promulgated;

(4) Each report that the authority is required to submit to the General Assembly pursuant to the general statutes, not later than seven days after the report is submitted;

(5) Each audit of the authority conducted by the Auditors of Public Accounts, each compliance audit of the authority's activities conducted pursuant to section 1-122 of the general statutes and each audit conducted by an independent auditing firm, not later than seven days after each such audit is received by the board of directors of the authority; and

(6) A report on any contract between the authority and a person, other than a director, officer or employee of the authority, for the purpose of influencing any legislative or administrative action on behalf of the authority or providing legal advice to the authority. The report shall indicate for each such contract (A) the names of the parties to the contract, (B) the cost of the contract, (C) the term of the contract, (D) a summary of the services to be provided under the contract, (E) the method used by the authority to award the contract, and (F) a summary of the authority's need for the services provided under the contract. Such report shall be made available through the Internet not later than fifteen days after the contract is executed between the authority and the person.

Sec. 5. (NEW) (Effective from passage) The Connecticut Electricity Procurement Authority shall have power to:

(1) Employ a staff;

(2) Establish offices where necessary in the state of Connecticut;

(3) Make and enter into any contract or agreement necessary or incidental to the performance of its duties and execution of its powers;

(4) Sue and be sued;

(5) Have a seal and alter it at pleasure;

(6) Make and alter bylaws and rules and regulations with respect to the exercise of its own powers;

(7) Conduct such hearings, examinations and investigations as may be necessary and appropriate to the conduct of its operations and the fulfillment of its responsibilities;

(8) Obtain access to public records and apply for the process of subpoena if necessary to produce books, papers, records and other data;

(9) Charge reasonable fees for the services it performs and waive, suspend, reduce or otherwise modify such fees, in accordance with criteria established by the authority;

(10) Purchase, lease or rent such real and personal property as it may deem necessary, convenient or desirable;

(11) Appoint such state and local advisory councils as it may from time to time deem advisable;

(12) Otherwise, do all things necessary for the performance of its duties, the fulfillment of its obligations and the conduct of its operations;

(13) Receive and accept, from any source, aid or contributions, including money, property, labor and other things of value;

(14) Invest any funds not needed for immediate use or disbursement in obligations issued or guaranteed by the United States of America or the state of Connecticut and in obligations that are legal investments for savings banks in this state; and

(15) Adopt regular procedures for exercising its power under sections 1 to 12, inclusive, of this act not in conflict with other provisions of the general statutes.

Sec. 6. Section 16-244b of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) All customers of electric distribution companies, as defined in section 16-1, shall have the opportunity to purchase electric generation services from their choice of electric suppliers, as defined in said section 16-1, in a competitive generation market in accordance with the schedule provided in this section. On and after January 1, 2000, up to thirty-five per cent of the peak load of each rate class of an electric company or electric distribution company, as the case may be, may choose an electric supplier to provide their electric generation services, provided such customers shall be located in distressed municipalities, as defined in section 32-9p. In the event that the number of customers exceeds thirty-five per cent of such load, preference shall be given to customers located in distressed municipalities with a population greater than one hundred thousand persons. Participation shall be determined on a first-come, first-served basis. As of July 1, 2000, all customers shall have the opportunity to choose an electric supplier. On and after January 1, 2000, electric generation services shall be provided in accordance with section 16-244c to any customer who has not chosen an electric supplier or has declined, failed or been unable to enter into or maintain a contract for electric generation services with an electric supplier. The Department of Public Utility Control may adopt regulations in accordance with chapter 54 to implement the phase-in schedule provided in this subsection.

(b) Notwithstanding subsection (a) of this section, on or before September 1, 2007, and annually thereafter, any electric customer who is (1) (A) a senior citizen, sixty-two years of age or older, or (B) physically disabled or blind, as defined in section 1-1f, and (2) a recipient of benefits under either the Connecticut Energy Assistance Program or the Contingency Heating Assistance Program, shall have the opportunity to choose as his or her electric supplier the Connecticut Electricity Procurement Authority established pursuant to section 1 of this act.

Sec. 7. Section 16-244d of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) Not later than December 1, 1998, the Department of Public Utility Control shall develop a comprehensive public education outreach program to educate customers about the implementation of retail competition among electric suppliers, as defined in section 16-1. The goals of the program shall be to maximize public information, minimize customer confusion and equip all customers to participate in a restructured generation market. The program shall include, but not be limited to: (1) The dissemination of information through mass media, interactive approaches and written materials with the goal of reaching every electric customer; (2) the conduct of public forums in different geographical areas of the state to foster public input and provide opportunities for an exchange of questions and answers; (3) involvement of community-based organizations in developing messages and in devising and implementing education strategies; (4) targeted efforts to reach rural, low income, elderly, foreign language, disabled, ethnic minority and other traditionally underserved populations; and (5) periodic evaluations of the effectiveness of educational efforts. The department shall assign one individual within the department to coordinate the outreach program and oversee the education process. The department shall begin to implement the outreach program not later than January 1, 1999.

(b) There shall be established a Consumer Education Advisory Council which shall advise the outreach program coordinator on the development and implementation of the outreach program until the termination of the standard offer under section 16-244c. Membership of the advisory council shall be established by the Consumer Counsel not later than December 1, 1998, and shall include, but not be limited to, representatives of the Department of Public Utility Control, the Office of Consumer Counsel, the Office of the Attorney General, the Office of Policy and Management, the Department of Environmental Protection, community and business organizations, consumer groups, including, but not limited to, a group that represents hardship customers, as defined in section 16-262c, electric distribution companies and electric suppliers. The advisory council shall determine the information to be distributed to customers as part of the education effort such as customers' rights and obligations in a restructured environment, how customers can exercise their right to participate in retail access, the types of electric suppliers expected to be licensed including the possibility of load aggregation, electric generation services options that will be available, the environmental characteristics of different types of generation facilities and other information determined by the advisory council to be necessary for customers. The advisory council shall advise the outreach program coordinator on the methods of distributing information in accordance with subsection (a) of this section and the timing of such distribution. The advisory council shall meet on a regular basis and report to the outreach program coordinator as it deems appropriate until termination of the advisory council's role upon the termination of the standard offer under section 16-244c.

(c) Not later than December 1, 1998, the Department of Public Utility Control shall submit a report to the joint standing committee of the General Assembly having cognizance of matters relating to energy, outlining the scope of the education outreach program developed by the department and identifying the individual acting as outreach program coordinator and the membership of the advisory council.

(d) The department may retain a consultant in accordance with section 16-18a to assist in developing and implementing the public education outreach program, provided the authorization to retain such consultant shall expire December 31, 2005. The reasonable and proper expenses for retaining the consultant and implementing the outreach program shall be reimbursed through the systems benefits charge as provided in subsection (b) of said section 16-18a.

(e) The advisory council shall, in consultation with the Connecticut Academy of Science and Engineering and the New England Conference of Public Utility Commissioners, analyze the environmental costs and benefits of the following categories of energy sources: (1) Class I renewable energy sources by type; (2) Class II renewable energy sources by type; (3) facilities using coal, natural gas, oil or other petroleum products as fuel which facilities are subject to the New Source Performance Standards in the federal Clean Air Act for such facilities; (4) facilities using coal, natural gas, oil or other petroleum products as fuel which facilities are not subject to the New Source Performance Standards; (5) nuclear power generating facilities; and (6) hydropower that does not meet the criteria for a Class II renewable energy source. The advisory council shall establish uniform standards for the disclosure of information to allow customers to easily compare rates of air pollutant emissions and the resource mix of various energy sources of electric suppliers.

(f) The Department of Public Utility Control, in consultation with the Office of Consumer Counsel, shall establish a program for the dissemination of information regarding electric suppliers. Such program shall require electric distribution companies to distribute an informational summary on electric suppliers to any new customer and to existing customers beginning on January 1, 2004, and semiannually thereafter. Such informational summary shall be developed by the department and shall include, but not be limited to, the name of each licensed electric supplier, the state where the supplier is based, information on whether the supplier has active offerings for either residential or commercial and industrial consumers, the telephone number and Internet address of the supplier, and information as to whether the supplier offers electric generation services from renewable energy sources in excess of the portfolio standards established pursuant to section 16-245a. The department shall include pricing information in the informational summary to the extent the department determines feasible. The department shall post the informational summary in a conspicuous place on its website and provide electronic links to the website of each supplier. The department shall update the informational summary on its website on at least a quarterly basis.

(g) The Department of Public Utility Control, in consultation with the Office of Consumer Counsel, the Department of Social Services and the Consumer Education Advisory Council, shall establish a program for the dissemination of information regarding the Connecticut Electricity Procurement Authority established pursuant to section 1 of this act. Such program shall require electric distribution companies to distribute an informational summary on said authority to any new customer on and after July 1, 2008, and to existing customers beginning on July 1, 2008, and annually thereafter. The Department of Public Utility Control shall develop such informational summary, which shall include, but not be limited to, the telephone number and Internet address of the supplier. The Department of Public Utility Control shall include pricing information in the informational summary to the extent the department determines feasible. The Department of Public Utility Control shall post the informational summary in a conspicuous place on its web site and provide electronic links to the web site of said authority. The Department of Public Utility Control shall update the informational summary on its web site on at least a quarterly basis.

[(g)] (h) The Department of Public Utility Control, in consultation with the Office of Consumer Counsel and the Consumer Education Advisory Council, shall, not later than October 1, 2003, develop a plan for the restart of the education outreach program on or before October 1, 2004, and submit, in accordance with the provisions of section 11-4a, such plan to the joint standing committee of the General Assembly having cognizance of matters relating to energy and technology.

Sec. 8. Subsection (c) of section 16-244i of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(c) Each electric distribution company shall continue to provide metering, billing and collection services for electric suppliers and for the Connecticut Electricity Procurement Authority, established in section 1 of this act, except that, on and after the effective date of the regulations adopted pursuant to section 16-245d, as amended by this act, which allow an electric supplier to provide direct billing and collection services for electric generation services and related federally mandated congestion costs that such supplier provides to its customers that use a demand meter or have a maximum demand of not less than five hundred kilowatts and that choose to receive a bill directly from their electric supplier, an electric distribution company shall not provide such billing and collection services for such customers. The department shall determine billing and metering protocols and any appropriate cost-sharing allocations among electric distribution companies and electric suppliers. Notwithstanding an electric supplier's right, in accordance with the general statutes, to terminate its contract with a customer for the provision of generation service by reason of the customer's nonpayment of the charges directly billed by the supplier to the customer, an electric supplier shall not disconnect electric service to the customer or otherwise terminate the physical delivery of electricity to customers directly billed by the electric supplier.

Sec. 9. Section 16-245d of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) The Department of Public Utility Control shall, by regulations adopted pursuant to chapter 54, develop a standard billing format that enables customers to compare pricing policies and charges among electric suppliers and the Connecticut Electricity Procurement Authority, established in section 1 of this act. Not later than January 1, 2006, the department shall adopt regulations, in accordance with the provisions of chapter 54, to provide that an electric supplier may provide direct billing and collection services for electric generation services and related federally mandated congestion charges that such supplier provides to its customers that have a maximum demand of not less than one hundred kilowatts and that choose to receive a bill directly from such supplier. An electric company, electric distribution company or electric supplier that provides direct billing of the electric generation service component and related federally mandated congestion charges, as the case may be, shall, in accordance with the billing format developed by the department, include the following information in each customer's bill, as appropriate: (1) The total amount owed by the customer, which shall be itemized to show, (A) the electric generation services component and any additional charges imposed by the electric supplier, if applicable, (B) the distribution charge, including all applicable taxes and the systems benefits charge, as provided in section 16-245l, (C) the transmission rate as adjusted pursuant to subsection (d) of section 16-19b, (D) the competitive transition assessment, as provided in section 16-245g, (E) federally mandated congestion charges, and (F) the conservation and renewable energy charge, consisting of the conservation and load management program charge, as provided in section 16-245m, and the renewable energy investment charge, as provided in section 16-245n; (2) any unpaid amounts from previous bills which shall be listed separately from current charges; (3) except for customers subject to a demand charge, the rate and usage for the current month and each of the previous twelve months in the form of a bar graph or other visual form; (4) the payment due date; (5) the interest rate applicable to any unpaid amount; (6) the toll-free telephone number of the electric distribution company to report power losses; (7) the toll-free telephone number of the Department of Public Utility Control for questions or complaints; (8) the toll-free telephone number and address of the electric supplier; and (9) a statement about the availability of information concerning electric suppliers pursuant to section 16-245p.

(b) The regulations shall provide guidelines for determining the billing relationship between the electric distribution company and electric suppliers or the Connecticut Electricity Procurement Authority, including, but not limited to, the allocation of partial bill payments and late payments between the electric distribution company and the electric supplier. An electric distribution company that provides billing services for an electric supplier or the Connecticut Electricity Procurement Authority shall be entitled to recover from the electric supplier all reasonable transaction costs to provide such billing services as well as a reasonable rate of return, in accordance with the principles in subsection (a) of section 16-19e.

Sec. 10. Section 16-245q of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) A customer may change his electric supplier, as defined in section 16-1, at any time. The electric distribution company, as defined in said section 16-1, and electric supplier may each charge a reasonable fee, as approved by the Department of Public Utility Control, to make a change in the customer's supplier to reflect the actual cost to read the customer's meter and make changes in its billing records, except that every customer may seek a change in his electric supplier without charge once in any twelve-month period if the change occurs at the end of the customer's regularly scheduled meter reading and billing cycle.

(b) Notwithstanding subsection (a) of this section, any customer who is (1) (A) a senior citizen, sixty-two years of age or older, or (B) physically disabled or blind, as defined in section 1-1f, and (2) a recipient of benefits under either the Connecticut Energy Assistance Program or the Contingency Heating Assistance Program may choose the Connecticut Electricity Procurement Authority, established in section 1 of this act, as his or her electric supplier. Said customer's current supplier, whether an electric distribution company, as defined in section 16-1, or an electric supplier, as defined in said section 16-1, may charge a reasonable fee, as approved by the Department of Public Utility Control, to make a change in the customer's supplier to reflect the actual cost to read the customer's meter and make changes in its billing records.

Sec. 11. (Effective from passage) (a) For the calendar year 2007, each electric distribution company and electric supplier shall offer an electricity conservation incentive program to its customers. Said program shall compare electricity usage during the period beginning on June 1, 2007, and ending on August 31, 2007, and during the same period in 2006 and give customers a conservation incentive.

(b) Electric distribution companies shall issue credits to customers on the electricity bill that is presented on or after November 1, 2007, and shall calculate said credits as follows: (1) Any customer who uses at least ten per cent less electricity during the 2007 period shall earn a credit equal to ten per cent of the billed generation charges for usage from June 1, 2007, to August 31, 2007, inclusive; (2) any customer who uses at least fifteen per cent less electricity during the 2007 period shall earn a credit equal to fifteen per cent of the billed generation charges for usage from June 1, 2007, to August 31, 2007, inclusive; and (3) any customer who uses at least twenty per cent less electricity during the 2007 period shall earn a credit equal to twenty per cent of the billed generation charges for usage from June 1, 2007, to August 31, 2007, inclusive. The calculation of reduction in electric energy usage shall be made pursuant to this section and the Department of Public Utility's decision in the proceeding required by subsection (c) of this section.

(c) Within fifteen days of the effective date of this section, each electric distribution company shall file with the Department of Public Utility Control an outline of the program established in subsection (a) of this section. Said outline shall include, but not be limited to, how the company plans to implement said program and the projected costs of said program. Using the submitted outlines, the department shall conduct an uncontested proceeding to design the parameters of the program established in subsection (a) of this section, and to consider and implement reasonable means of marketing and promoting the program. The department shall include, but not be limited to, the following parameters necessary to encourage conservation, discourage inaccuracy in measurement and assure that credits are only provided to customers who have changed their usage by taking conservation and load management actions: (1) The comparison of energy usage shall be based on weather-normalized usage in 2007 compared to the comparable time period on 2006 for that particular address; (2) the program shall not be available to customers without usage in comparable months of 2006; and (3) for customers who participate in other demand response programs, including, but not limited to, those sponsored by the regional independent system operator, benefits from the program established in subsection (a) of this section shall be pro-rated against any benefits from any other programs.

(d) All costs incurred by an electric distribution company in connection with the program established in subsection (a) of this section, including incentive credits on customers' bills, shall be recoverable through the systems benefits charge.

(e) On or before February 1, 2008, the department shall report to the joint standing committee of the General Assembly having cognizance of matters relating to energy regarding the success of, and any recommendations for improvement for, the incentive program established pursuant to subsection (a) of this section.

Sec. 12. Subsection (a) of section 16-245l of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) The Department of Public Utility Control shall establish and each electric distribution company shall collect a systems benefits charge to be imposed against all end use customers of each electric distribution company beginning January 1, 2000. The department shall hold a hearing that shall be conducted as a contested case in accordance with chapter 54 to establish the amount of the systems benefits charge. The department may revise the systems benefits charge or any element of said charge as the need arises. The systems benefits charge shall be used to fund (1) the expenses of the public education outreach program developed under subsections (a), (f) and (g) of section 16-244d, as amended by this act, other than expenses for department staff, (2) the reasonable and proper expenses of the education outreach consultant pursuant to subsection (d) of section 16-244d, as amended by this act, (3) the cost of hardship protection measures under sections 16-262c and 16-262d and other hardship protections, including, but not limited to, electric service bill payment programs, funding and technical support for energy assistance, fuel bank and weatherization programs and weatherization services, (4) the payment program to offset tax losses described in section 12-94d, (5) any sums paid to a resource recovery authority pursuant to subsection (b) of section 16-243e, (6) low income conservation programs approved by the Department of Public Utility Control, (7) displaced worker protection costs, (8) unfunded storage and disposal costs for spent nuclear fuel generated before January 1, 2000, approved by the appropriate regulatory agencies, (9) postretirement safe shutdown and site protection costs that are incurred in preparation for decommissioning, (10) decommissioning fund contributions, (11) the costs of temporary electric generation facilities incurred pursuant to section 16-19ss, (12) operating expenses for the Connecticut Energy Advisory Board, [and] (13) legal, appraisal and purchase costs of a conservation or land use restriction and other related costs as the department in its discretion deems appropriate, incurred by a municipality on or before January 1, 2000, to ensure the environmental, recreational and scenic preservation of any reservoir located within this state created by a pump storage hydroelectric generating facility, and (14) expenses related to the electricity conservation incentive program established in section 11 of this act. As used in this subsection, "displaced worker protection costs" means the reasonable costs incurred, prior to January 1, 2008, (A) by an electric supplier, exempt wholesale generator, electric company, an operator of a nuclear power generating facility in this state or a generation entity or affiliate arising from the dislocation of any employee other than an officer, provided such dislocation is a result of (i) restructuring of the electric generation market and such dislocation occurs on or after July 1, 1998, or (ii) the closing of a Title IV source or an exempt wholesale generator, as defined in 15 USC 79z-5a, on or after January 1, 2004, as a result of such source's failure to meet requirements imposed as a result of sections 22a-197 and 22a-198 and this section or those Regulations of Connecticut State Agencies adopted by the Department of Environmental Protection, as amended from time to time, in accordance with Executive Order Number 19, issued on May 17, 2000, and provided further such costs result from either the execution of agreements reached through collective bargaining for union employees or from the company's or entity's or affiliate's programs and policies for nonunion employees, and (B) by an electric distribution company or an exempt wholesale generator arising from the retraining of a former employee of an unaffiliated exempt wholesale generator, which employee was involuntarily dislocated on or after January 1, 2004, from such wholesale generator, except for cause. "Displaced worker protection costs" includes costs incurred or projected for severance, retraining, early retirement, outplacement, coverage for surviving spouse insurance benefits and related expenses. "Displaced worker protection costs" does not include those costs included in determining a tax credit pursuant to section 12-217bb.

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 chamber thereof for any purpose:

OFA Fiscal Note

State Impact: See Below

Municipal Impact: See Below

Explanation

The bill makes various changes in energy related statutes that could affect rates paid by states and municipalities, the extent of which cannot be determined at this time.

The bill also results in other fiscal impacts, as follows:

Section 1 requires the Department of Environmental Protection (DEP) to serve on the Connecticut Electricity Procurement Authority (CEPA). DEP anticipates that service on the CEPA board of directors will increase costs through increased workload created under this bill. This would result in the diversion of ¼ of an employee away from current duties, or would require additional resources of approximately $25,000. It is anticipated that the Secretary of the Office of Policy and Management can serve on CEPA without incurring additional cost.

Sections 3 and 4 of the bill allow the Auditors of Public Accounts to audit the Connecticut Electricity Procurement Authority, which the agency can accomplish without requiring additional resources.

The Department of Public Utility Control (DPUC) can implement provisions of both the senior/disabled education and outreach program, along with the summer conservation program, within available staff resources.

Costs may be incurred, however, for marketing provisions related to these programs of approximately $500,000-$600,000 but would be funded through a surcharge on SBC/AT&T ratepayer charges. Costs may also be incurred for program implementation related to these programs, which would be funded through electric ratepayer funds. These effects, an additional telecommunications surcharge and program implementation, could impact the state and municipalities as telecommunications and electricity ratepayers, the extent of which cannot be determined at this time.

Section 7 allows DPUC to retain outside consultants for assistance in developing and implementing the public education outreach program, to be reimbursed through the electric systems benefit charge. This added consultant cost could affect the state and municipalities as ratepayers, the extent of which is also unknown at this time.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation. The impact on the electric rate payers in the state in the future is uncertain.



OLR Bill Analysis

sHB 7097

AN ACT CONCERNING CONNECTICUT'S ENERGY POLICY.

SUMMARY:

The bill establishes the Connecticut Electricity Procurement Authority (CEPA). It specifies the membership of authority's board and the authority's powers and requires that its records be posted on the Internet. The bill authorizes CEPA to procure power for people who are (1) 62 or older or disabled and (2) participate in state energy assistance programs. The board is a political subdivision of the state but not a state agency.

The bill also requires electric companies to operate a program that rewards customers for reducing their demand during summer 2007 compared to summer 2006. Funding for this program comes from the systems benefits charge on electric bills.

EFFECTIVE DATE: Upon passage

CONNECTICUT ENERGY PROCUREMENT AUTHORITY

Board of Directors

Under the bill, CEPA's board of directors consists of the Social Services and Environmental Protection commissioners, the secretary of the Office of Policy and Management, and the Consumer Counsel. In addition, the governor, Senate president pro tempore, and House speaker each appoint one director. The appointed members serve four-year terms, must have a background in law or finance, and cannot be legislators. Any appointed member who misses three consecutive meetings or half of the board's meeting in a calendar year is considered to have resigned. Appointed members cannot name designees. Directors can hold outside employment, subject to laws governing ethics and conflicts of interest. Service on the board does not affect a director's civil service or retirement rights.

The board must elect a chairperson who, with the board's approval, can employ an authority president who is paid a salary prescribed by the directors. The president must supervise the authority's administrative affairs and technical activities in accordance with board directives.

The board can act by a majority of the members present when there is a quorum (defined as three members). The authority's directors, members, and officers are not personally liable for damages or injuries that are not willful or wanton, so long as they are acting in the scope of their office. Nor are they or anyone executing authority bonds personally liable for them.

The board must hold its first meeting by May 1, 2007 and must meet at least monthly. The board must keep minutes, which are public records. It must report annually to the legislature and governor. The reports must at a minimum describe the requests for proposals described below and include a list of the contracts the authority entered for procuring electricity, a list of the authority's outstanding notes and bonds and their payment status, a budget showing the authority's administrative expenses, and a description of the authority's revenues from all sources and of the redistribution of any surplus revenues. The authority is subject to audit by the Auditors of Public Accounts.

Authority's Powers

The bill gives CEPA a broad range of powers, including:

1. employing staff;

2. entering into contracts;

3. receiving funds and other contributions and invest them;

4. conducting hearings, examinations, and investigations;

5. obtaining access to public records and applying for subpoenas if necessary to produce books, papers, records, and other data;

6. charging reasonable fees for its services;

7. buying, leasing, and renting real and personal property; and

8. appointing state and local advisory councils.

Public Records

The board must make the following available to the public over the Internet, except as prohibited by the Freedom of Information Act:

1. the schedule of meetings of the board and its committees within seven days after the schedule is set;

2. draft minutes of each board and committee meeting within seven days after each meeting is held;

3. an annual operations plan within seven days after the plan is promulgated;

4. each report that the authority must submit to the legislature within seven days after the report is submitted;

5. each audit conducted by the Auditors of Public Accounts, each statutorily required compliance audit of the authority's activities, and each audit conducted by an independent auditing firm, in each case within seven days of the audit being received by the board of directors; and

6. a report on any contract between the authority and a person, other than a director, officer, or authority employee, for the purpose of lobbying on the authority's behalf or providing legal advice to the authority.

The reports on contracts with lobbyists and lawyers must indicate for each contract (1) the names of the parties, (2) the contract's cost and term, (3) a summary of the services to be provided under the contract, (4) how the authority awarded the contract, and (5) a summary of the authority's need for the contracted services. These reports must be made available through the Internet within 15 days after the contract is executed.

Program to Serve Senior and Disabled Customers who Participate in Energy Assistance Programs

By January 1, 2008, the board must issue a request for proposals (RFP) to procure power for people who (1) are age 62 or older, blind, or physically disabled and (2) participate in either of two energy assistance programs (the Connecticut Energy Assistance Program, which serves low-income households, and the Connecticut Heating Assistance Program, which serves moderate-income households) who choose to participate in the authority's program. CEPA can award contracts only to entities whose generation price is least 10% lower than the charges that the participants would be charged under standard service (the service that the electric companies must provide to small and medium size customers who do not choose a competitive supplier. These contracts must begin by January 1, 2008, i.e., the deadline for issuing the RFP.

The bill allows electric customers who meet specified conditions to choose CEPA as their electric supplier. To be eligible, the customer must (1) be 62 or older, blind, or disabled and (2) receive benefits under one of the two energy assistance programs. Customers can choose CEPA as their supplier by September 1, 2007 and annually thereafter. Since the power contracts begin January 1, 2008, it is unclear how CEPA would serve those customers who choose it as their supplier in 2007. The electric company or competitive supplier currently serving the customer can charge a reasonable fee, as approved by the Department of Public Utility Control (DPUC), to reflect the actual cost of reading the customer's meter and make changes in the customer's billing records when the customer begins to participate in the CEPA program.

The bill requires to DPUC establish a program to disseminate information about CEPA. DPUC must do this in consultation with the Office of Consumer Council, the Department of Social Services, and the DPUC's Consumer Education Advisory Council. The program must require electric companies to provide an informational summary about CEPA to new and existing customers beginning July 1, 2008 and annually thereafter. DPUC must develop the summary, which must include the supplier's telephone number and Internet address. DPUC must include pricing information in the summary to the extent it determines this is feasible. DPUC must post the summary on its website and update this information at least quarterly.

Conforming Changes

The bill extends to CEPA the following provisions, which currently apply to competitive suppliers:

1. electric companies must continue to provide metering, billing, and collection services for customers served by CEPA;

2. DPUC must develop standard billing formats for CEPA;

3. DPUC must adopt regulations establishing guidelines for billing relationships between CEPA and the electric companies; and

4. electric companies can recover their reasonable costs for providing billing services.

SUMMER CONSERVATION INCENTIVE PROGRAM

The bill requires electric companies and competitive suppliers, in calendar year 2007, to offer an electricity conservation incentive program to their customers. The program must compare electricity use between June 1, 2007 and August 31, 2007 to use in the same period in 2006 and give customers who conserve electricity in 2007 a credit on their electric bills.

Within 15 days after the bill's passage, each electric company must file a program outline with DPUC. The outline must describe how the company plans to implement the program and its projected costs. Using the outlines, DPUC must conduct an uncontested proceeding to design the program's parameters. DPUC must include the following parameters to encourage conservation, discourage inaccurate measurements, and assure that credits are only given to customers who reduce their use of power: (1) the energy use in 2007 must be compared to 2006 use, adjusted for weather changes; (2) the program must be limited to customers who used power in 2006; and (3) credits must be prorated for customers who participate in other programs to reduce demand, including those sponsored by the entity that administers the regional wholesale electric market.

Electric companies must issue credits to customers who participate in the program. The credit is 10% of the June through August 2007 generation charges for customers who use at least 10% less electricity than they used in summer 2006. Customers who reduce their summer consumption by at least 15% get a 15% credit and those who reduce their consumption by at least 20% get a 20% credit. The credit is to appear on the customer's electric bill sent out on or after November 1, 2007.

The electric companies can recover their costs for the program, including the credits, from the systems benefits charge on electric bills. By February 1, 2008, DPUC must report to the Energy and Technology Committee regarding the program's success and any recommendations on how to improve it.

COMMITTEE ACTION

Energy and Technology Committee

Joint Favorable Substitute