File No. 178

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 FUTURE.

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

Section 1. (NEW) (Effective July 1, 2007) On and after July 1, 2007, and not later than July 1, 2017, the Secretary of the Office of Policy and Management shall provide a five-hundred-dollar rebate for the purchase and installation in residential structures of replacement natural gas, propane and oil furnaces and boilers that are not less than eighty-four per cent efficient. Persons may apply to the secretary, on a form prescribed by the secretary, to receive such rebate. The rebate shall be available for only a residential structure containing not more than four dwelling units.

Sec. 2. Section 6 of public act 05-2 of the October 25 special session is repealed and the following is substituted in lieu thereof (Effective from passage):

The State Bond Commission shall have the power, from time to time, to authorize the issuance of bonds of the state in one or more series and in principal amounts not exceeding in the aggregate five million dollars. The proceeds of the sale of said bonds shall be deposited in the Energy Conservation Loan Fund established under section 16a-40a of the general statutes for the purposes of making and guaranteeing loans and deferred loans as provided in section 5 of [this act] public act 05-2 of the October 25 special session and section 1 of this act. All provisions of section 3-20 of the general statutes, or the exercise of any right or power granted thereby which are not inconsistent with the provisions of sections 16a-40 to 16a-40b, inclusive, of the general statutes, as amended by section 5 of public act 05-191, and this section are hereby adopted and shall apply to all bonds authorized by the State Bond Commission pursuant to said sections 16a-40 to 16a-40b, inclusive, and this section, and temporary notes in anticipation of the money to be derived from the sale of any such bonds so authorized may be issued in accordance with said section 3-20 and from time to time renewed. Such bonds shall mature at such time or times not exceeding twenty years from their respective dates as may be provided in or pursuant to the resolution or resolutions of the State Bond Commission authorizing such bonds. Said bonds issued pursuant to said sections 16a-40 to 16a-40b, inclusive, and this section shall be general obligations of the state and the full faith and credit of the state of Connecticut are pledged for the payment of the principal of and interest on said bonds as the same become due, and accordingly and as part of the contract of the state with the holders of said bonds, appropriation of all amounts necessary for punctual payment of such principal and interest is hereby made, and the Treasurer shall pay such principal and interest as the same become due.

Sec. 3. (Effective from passage) (a) On or before January 1, 2008, the Energy Conservation Management Board, in consultation with the electric distribution companies, shall develop and establish a program to (1) provide rebates to residential customers of electric distribution companies who replace an existing window air conditioning unit that does not meet the federal Energy Star standard with a unit that does meet said standard. Said program shall be in effect from January 1, 2008, to September 1, 2008. Such rebates shall be not less than twenty-five dollars for an air conditioner with a retail price of one hundred dollars to two hundred dollars; not less than fifty dollars for an air conditioner with a retail price of more than two hundred dollars but less than three hundred dollars; and not less than one hundred dollars for an air conditioner with a retail price of more than three hundred dollars, and (2) provide rebates of not less than five hundred dollars to residential customers of electric distribution companies who replace an existing central air conditioning unit that does not meet the federal Energy Star standard with a unit that does meet said standard.

(b) The rebate program shall be funded by the Energy Conservation and Load Management Funds established by the electric distribution companies pursuant to section 16-245m of the general statutes.

(c) The Commissioner of Consumer Protection shall certify to participate in the program established in subsection (a) of this section only those retailers that will provide the rebate to only those customers who present an air conditioning unit to a retailer for removal or disposal upon or before the purchase of an air conditioning unit that meets the federal Energy Star standard. The commissioner may impose a fine of not more than ten thousand dollars on any retailer providing the rebate without removing or disposing of an air conditioning unit.

(d) On or before January 1, 2009, the Department of Public Utility Control shall report to the joint standing committee of the General Assembly having cognizance of matters relating to energy the results of the rebate program established in subsection (a) of this section.

Sec. 4. (NEW) (Effective October 1, 2007) An electric supplier or an electric distribution company shall waive a demand charge for an operator of a fuel cell during (1) a loss of power due to problems at any distribution resource, or (2) a scheduled or unscheduled shutdown of the fuel cell if said shutdown occurs during off-peak hours. The charge waived shall not exceed the amount resulting from the problem or shutdown.

Sec. 5. (NEW) (Effective from passage) On and after January 1, 2008, the Department of Public Utility Control shall order and direct that any intermediate or base load electric generating unit owned by an electric distribution company or covered by a bilateral contract with an electric distribution company that is fueled by either oil or natural gas, with a rating of not less than sixty-five megawatts, to have the actual ability to operate on demand for a forty-eight-hour period using either oil or natural gas.

Sec. 6. (Effective from passage) Not later than September 1, 2007, the Department of Public Utility Control shall conduct a contested case proceeding, in accordance with the provisions of chapter 54 of the general statutes, to analyze (1) the appropriate number of linemen that are necessary for an electric distribution company to maintain, repair and extend its electric distribution lines by region under normal circumstances and under extraordinary circumstances, including, but not limited to, storm conditions, (2) whether the consolidation or centralization of line repair facilities and personnel results in longer times to reach affected areas, (3) whether greater use of newer technologies may reduce the incidence of power outages, and (4) the most efficacious way to notify the public regarding an electric power outage and the status of an electric distribution company's efforts to restore electricity to a particular area of the state. Not later than January 1, 2008, the department shall submit a report with the results of such analysis to the joint standing committee of the General Assembly having cognizance of matters relating to energy in accordance with the provisions of section 11-4a of the general statutes.

Sec. 7. Section 16-32g of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

Not later than January 1, [1988] 2008, and annually thereafter, each electric or electric distribution company shall submit to the Department of Public Utility Control a plan for the maintenance of poles, wires, conduits or other fixtures, along public highways or streets for the transmission or distribution of electric current, owned, operated, managed or controlled by such company, in such format as the department shall prescribe. Such plan shall include a summary of appropriate staffing levels necessary for the maintenance of said fixtures and a program for the trimming of tree branches and limbs located in close proximity to overhead electric wires where such branches and limbs may cause damage to such electric wires. The department shall review each plan and may issue such orders as may be necessary to ensure compliance with this section. The department may require each electric or electric distribution company to submit an updated plan at such time and containing such information as the department may prescribe. The department shall adopt regulations, in accordance with the provisions of chapter 54, to carry out the provisions of this section.

Sec. 8. Subsection (a) of section 16-19e of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) In the exercise of its powers under the provisions of this title, the Department of Public Utility Control shall examine and regulate the transfer of existing assets and franchises, the expansion of the plant and equipment of existing public service companies, the operations and internal workings of public service companies and the establishment of the level and structure of rates in accordance with the following principles: (1) That there is a clear public need for the service being proposed or provided; (2) that the public service company shall be fully competent to provide efficient and adequate service to the public in that such company is technically, financially and managerially expert and efficient; (3) that the department and all public service companies shall perform all of their respective public responsibilities with economy, efficiency and care for [the] public safety and energy security, and so as to promote economic development within the state with consideration for energy and water conservation, energy efficiency and the development and utilization of renewable sources of energy and for the prudent management of the natural environment; (4) that the level and structure of rates be sufficient, but no more than sufficient, to allow public service companies to cover their operating costs including, but not limited to, appropriate staffing levels, and capital costs, to attract needed capital and to maintain their financial integrity, and yet provide appropriate protection to the relevant public interests, both existing and foreseeable which shall include, but not be limited to, reasonable costs of security of assets, facilities and equipment that are incurred solely for the purpose of responding to security needs associated with the terrorist attacks of September 11, 2001, and the continuing war on terrorism; (5) that the level and structure of rates charged customers shall reflect prudent and efficient management of the franchise operation; and (6) that the rates, charges, conditions of service and categories of service of the companies not discriminate against customers which utilize renewable energy sources or cogeneration technology to meet a portion of their energy requirements.

Sec. 9. (NEW) (Effective from passage) Not later than September 1, 2007, the Connecticut Siting Council, in consultation with the Department of Emergency Management and Homeland Security's Coordinating Council, established pursuant to section 28-1b of the general statutes, and the Department of Public Utility Control shall initiate a contested case proceeding, in accordance with the provisions of chapter 54 of the general statutes, to investigate energy security with regard to the siting of electric generating facilities and transmission facilities, including consideration of planning, preparedness, response and recovery capabilities. The siting council may conduct such proceedings in an executive session with sensitive information submitted under a protective order.

Sec. 10. (Effective July 1, 2007) Not later than September 1, 2007, the Department of Public Utility Control shall initiate a contested case proceeding, in accordance with the provisions of chapter 54 of the general statutes, in consultation with the Connecticut Siting Council, to assess ways in which the state can ensure and enhance the reliability of electric generating facilities located in the state during periods of peak electric demand. Said proceeding shall include, but not be limited to, an examination of (1) the current compliance status of electric generation facilities with existing on-site dual fuel storage and operational requirements, (2) the existing inventory of fuel storage and fuel delivery resources available to supply electric generating facilities located in the state, (3) the amount of fuel delivery and storage infrastructure that would be necessary to ensure the reliable operation of in-state generating facilities during periods of peak electric demand, (4) the value for and appropriate level of firm fuel delivery contracts, and (5) the types of incentives that can be offered to electric and gas market participants to enhance the reliability of electric service during periods of peak electric demand. In conducting the proceeding, the council and the department shall seek the input of interested persons and entities including, but not limited to, the Office of Consumer Counsel, the Attorney General, the state's electric distribution and gas companies, the state's electric generators, owners of natural gas pipeline facilities located in the state, and the regional independent system operator. Not later than January 1, 2008, the department shall submit a report containing their findings and recommendations to the joint standing committee of the General Assembly having cognizance of matters relating to energy in accordance with the provisions of section 11-4a of the general statutes.

Sec. 11. Section 16a-38k of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2008):

(a) Notwithstanding any provision of the general statutes, any (1) new construction of a state facility [, except salt sheds, parking garages, maintenance facilities or school construction,] that is projected to cost not less than five million dollars, [or more,] and is approved and funded on or after January 1, [2007] 2008, and (2) renovation of a state 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, 2008, 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, [and the Institute for Sustainable Energy,] shall exempt any facility from complying with said regulations if [said secretary] 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, "state 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, to adopt building construction standards that (1) 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, including energy standards that exceed those set forth in the 2004 edition of the American Society of Heating, Ventilating and Air Conditioning Engineers (ASHRAE) Standard 90.1 by no less than twenty per cent, or an equivalent standard, including, but not limited to, a two-globe rating in the Green Globes USA design program, and (2) will ensure that the completed building design and specifications and completed commissioned building will receive an energy performance rating of at least seventy-five on the Environmental Protection Agency's Energy Star energy performance rating system, and thereafter update such regulations as the secretary deems necessary.

Sec. 12. Section 10-285a of the general statutes is amended by adding subsection (i) as follows (Effective October 1, 2007):

(NEW) (i) The percentage determined pursuant to this section for a school building project grant for a school building project pursuant to section 16a-38k shall be increased by two percentage points, not to exceed one hundred. Prior to any grant the funds being awarded under this chapter for a project pursuant to section 16a-38k, the town or regional school district shall certify to the Department of Education that the school project will meet the standards established pursuant to said section 16a-38k.

Sec. 13. Section 16a-48 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) As used in this section:

(1) ["Department" means the Department of Public Utility Control] "Office" means the Office of Policy and Management;

(2) "Fluorescent lamp ballast" or "ballast" means a device designed to operate fluorescent lamps by providing a starting voltage and current and limiting the current during normal operation, but does not include such devices that have a dimming capability or are intended for use in ambient temperatures of zero degrees Fahrenheit or less or have a power factor of less than sixty-one hundredths for a single F40T12 lamp;

(3) "F40T12 lamp" means a tubular fluorescent lamp that is a nominal forty-watt lamp, with a forty-eight-inch tube length and one and one-half inches in diameter;

(4) "F96T12 lamp" means a tubular fluorescent lamp that is a nominal seventy-five-watt lamp with a ninety-six-inch tube length and one and one-half inches in diameter;

(5) "Luminaire" means a complete lighting unit consisting of a fluorescent lamp, or lamps, together with parts designed to distribute the light, to position and protect such lamps, and to connect such lamps to the power supply;

(6) "New product" means a product that is sold, offered for sale, or installed for the first time and specifically includes floor models and demonstration units;

(7) "Secretary" means the Secretary of the Office of Policy and Management;

(8) "State Building Code" means the building code adopted pursuant to section 29-252;

(9) "Torchiere lighting fixture" means a portable electric lighting fixture with a reflector bowl giving light directed upward so as to give indirect illumination;

(10) "Unit heater" means a self-contained, vented fan-type commercial space heater that uses natural gas or propane that is designed to be installed without ducts within the heated space. "Unit heater" does not include a product regulated by federal standards pursuant to 42 USC 6291, as amended from time to time, a product that is a direct vent, forced flue heater with a sealed combustion burner, or any oil fired heating system;

(11) "Transformer" means a device consisting of two or more coils of insulated wire that transfers alternating current by electromagnetic induction from one coil to another in order to change the original voltage or current value;

(12) "Low-voltage dry-type transformer" means a transformer that: (A) Has an input voltage of 600 volts or less; (B) is between 14 kilovolt-amperes and 2,501 kilovolt-amperes in size; (C) is air-cooled; and (D) does not use oil as a coolant. "Low-voltage dry-type transformer" does not include such transformers excluded from the low-voltage dry-type distribution transformer definition contained in the California Code of Regulations, Title 20: Division 2, Chapter 4, Article 4: Appliance Efficiency Regulations;

(13) "Pass-through cabinet" means a refrigerator or freezer with hinged or sliding doors on both the front and rear of the refrigerator or freezer;

(14) "Reach-in cabinet" means a refrigerator, freezer, or combination thereof, with hinged or sliding doors or lids;

(15) "Roll-in" or "roll-through cabinet" means a refrigerator or freezer with hinged or sliding doors that allows wheeled racks of product to be rolled into or through the refrigerator or freezer;

(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] which are designed for the refrigerated or frozen storage of food and food products;

(17) "Traffic signal module" means a standard eight-inch or twelve-inch round traffic signal indicator consisting of a light source, lens and all parts necessary for operation and communication of movement messages to drivers through red, amber and green colors;

(18) "Illuminated exit sign" means an internally illuminated sign that is designed to be permanently fixed in place and used to identify an exit by means of a light source that illuminates the sign or letters from within where the background of the exit sign is not transparent;

(19) "Packaged air-conditioning equipment" means air-conditioning equipment that is built as a package and shipped as a whole to end-user sites;

(20) "Large packaged air-conditioning equipment" means air-cooled packaged air-conditioning equipment having not less than 240,000 BTUs per hour of capacity;

(21) "Commercial clothes washer" means a soft mount front-loading or soft mount top-loading clothes washer that is designed for use in (A) applications where the occupants of more than one household will be using it, such as in multifamily housing common areas and coin laundries; or (B) other commercial applications, if the clothes container compartment is no greater than 3.5 cubic feet for horizontal-axis clothes washers, or no greater than 4.0 cubic feet for vertical-axis clothes washers;

(22) "Energy efficiency ratio" means a measure of the relative efficiency of a heating or cooling appliance that is equal to the unit's output in BTUs per hour divided by its consumption of energy, measured in watts.

(b) The provisions of this section apply to the testing, certification and enforcement of efficiency standards for the following types of new products sold, offered for sale or installed in the state: (1) Commercial clothes washers; (2) commercial refrigerators and freezers; (3) illuminated exit signs; (4) large packaged air-conditioning equipment; (5) low voltage dry-type distribution transformers; (6) torchiere lighting fixtures; (7) traffic signal modules; (8) unit heaters; and (9) any other products as may be designated by the department in accordance with subdivision (3) of subsection (d) of this section.

(c) The provisions of this section do not apply to (1) new products manufactured in the state and sold outside the state, (2) new products manufactured outside the state and sold at wholesale inside the state for final retail sale and installation outside the state, (3) products installed in mobile manufactured homes at the time of construction, or (4) products designed expressly for installation and use in recreational vehicles.

(d) (1) Not later than July 1, 2005, the [department] office, in consultation with the [secretary] Department of Public Utility Control, 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 refrigerators and freezers shall meet the August 1, 2004, requirements shown in Table A-6 of said California regulation; (C) 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 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 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 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 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 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 heaters shall not have pilot lights and shall have either power venting or an automatic flue damper.

(2) Such efficiency standards, where in conflict with the State Building Code, shall take precedence over the standards contained in the Building Code. Not later than July 1, 2007, and biennially thereafter, the [department] office, in consultation with the [secretary] Department of Public Utility Control, shall review and increase the level of such efficiency standards by adopting regulations in accordance with the provisions of chapter 54 upon a determination that increased efficiency standards would serve to promote energy conservation in the state and would be cost-effective for consumers who purchase and use such new products, provided no such increased efficiency standards shall become effective within one year following the adoption of any amended regulations providing for such increased efficiency standards.

(3) The [department] office, in consultation with the [secretary] Department of Public Utility Control, shall adopt regulations, in accordance with the provisions of chapter 54, to designate additional products to be subject to the provisions of this section and to establish efficiency standards for such products upon a determination that such efficiency standards (A) would serve to promote energy conservation in the state, (B) would be cost-effective for consumers who purchase and use such new products, and (C) that multiple products are available which meet such standards, provided no such efficiency standards shall become effective within one year following their adoption pursuant to this subdivision.

(e) On or after July 1, 2006, except for commercial clothes washers, for which the date shall be July 1, 2007, commercial refrigerators and freezers, for which the date shall be July 1, 2008, and large packaged air-conditioning equipment, for which the date shall be July 1, 2009, no new product of a type set forth in subsection (b) of this section or designated by the [department] office may be sold, offered for sale, or installed in the state unless the energy efficiency of the new product meets or exceeds the efficiency standards set forth in such regulations adopted pursuant to subsection (d) of this section.

(f) The [department] office, in consultation with the [secretary] Department of Public Utility Control, shall adopt procedures for testing the energy efficiency of the new products set forth in subsection (b) of this section or designated by the department if such procedures are not provided for in the State Building Code. The [department] office shall use United States Department of Energy approved test methods, or in the absence of such test methods, other appropriate nationally recognized test methods. The manufacturers of such products shall cause samples of such products to be tested in accordance with the test procedures adopted pursuant to this subsection or those specified in the State Building Code.

(g) Manufacturers of new products set forth in subsection (b) of this section or designated by the [department] office shall certify to the secretary that such products are in compliance with the provisions of this section. The [department] office, in consultation with the [secretary] Department of Public Utility Control, shall promulgate regulations governing the certification of such products. The secretary shall publish an annual list of such products.

(h) The Attorney General may institute proceedings to enforce the provisions of this section. Any person who violates any provision of this section shall be subject to a civil penalty of not more than two hundred fifty dollars. Each violation of this section shall constitute a separate offense, and each day that such violation continues shall constitute a separate offense.

Sec. 14. Subsection (a) of section 16a-48 of the general statutes is amended by adding subdivisions (23) to (42), inclusive, as follows (Effective October 1, 2007):

(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 34,500 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, impedance 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;

(NEW) (42) "Central air conditioner" means a central air conditioning model that consists of one or more factory-made assemblies, which normally include an evaporator or cooling coil, compressor and condenser. Central air conditioning models may provide the function of air cooling, air cleaning, dehumidifying or humidifying.

Sec. 15. Subsection (b) of section 16a-48 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(b) The provisions of this section apply to the testing, certification and enforcement of efficiency standards for the following types of new products sold, offered for sale or installed in the state: (1) Commercial clothes washers; (2) commercial refrigerators and freezers; (3) illuminated exit signs; (4) large packaged air-conditioning equipment; (5) low voltage dry-type distribution transformers; (6) torchiere lighting fixtures; (7) traffic signal modules; (8) unit heaters; (9) residential furnaces and boilers; (10) medium voltage dry-type transformers; (11) metal halide lamp fixtures; (12) single voltage external AC to DC power supplies; (13) state regulated incandescent reflector lamps; (14) bottle-type water dispensers; (15) commercial hot food holding cabinets; (16) portable electric spas; (17) walk-in refrigerators and walk-in freezers; (18) pool heaters; (19) central air conditioners; and [(9)] (20) any other products as may be designated by the department in accordance with subdivision (3) of subsection (d) of this section.

Sec. 16. 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, 2007):

(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, 2009, 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, (vi) for oil-fired steam boilers, eighty-two per cent annual fuel utilization efficiency, and (vii) for furnaces with furnace air handlers, 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;

(K) On or after January 1, 2009, medium voltage dry-type distribution transformers shall meet minimum efficiency levels three-tenths of a percentage point higher than the Class I 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 in 2002;

(L) On or after January 1, 2010, metal halide lamp fixtures designed to be operated 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;

(M) Single-voltage external AC to DC power supplies manufactured on or after January 1, 2008, shall meet the energy efficiency standards of table U-1 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. This standard shall not apply to single voltage external AC to DC power supplies sold with products subject to certification by the United States Food and Drug Administration. A single-voltage external AC to DC power supply that is made available by a manufacturer directly to a consumer or to a service or repair facility after and separate from the original sale of the product requiring the power supply as a service part or spare part shall not be required to meet the standards in said table U-1 until five years after the effective dates indicated in the table;

(N) On or after January 1, 2009, state regulated incandescent reflector lamps shall be manufactured to meet the minimum average lamp efficacy requirements for federally-regulated incandescent reflector lamps contained in 42 USC 6295 (i)(1)(A). Each lamp shall indicate the date of manufacture;

(O) On or after January 1, 2009, 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;

(P) On or after January 1, 2009, 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. 17. Subsection (g) of section 16a-48 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(g) Manufacturers of new products set forth in subsection (b) of this section or designated by the department shall certify to the secretary that such products are in compliance with the provisions of this section, except that certification is not required for single voltage external AC to DC power supplies and walk-in refrigerators and walk-in freezers. All single voltage external AC to DC power supplies shall be labeled as described in the January 2006 California Code of Regulations, Title 20, Section 1607 (9). The department, in consultation with the secretary, shall promulgate regulations governing the certification of such products. The secretary shall publish an annual list of such products.

Sec. 18. Section 4a-67c of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

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 or exceed 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. 19. (NEW) (Effective January 1, 2008) (a) On or before June 1, 2007, the Department of Public Utility Control shall conduct a contested case proceeding, in accordance with chapter 54 of the general statutes, to determine a municipal electric utility's pro rata share of the one-time awards made to customer-side distributed resources made pursuant to subsection (a) of section 16-243i of the general statutes, as amended by this act, in order for customers in its service area to qualify for such awards. Said pro rata share shall reflect an equitable method of cost allocation that reflects the benefits that accrue to electric distribution customers as a result of such customer-side distributed resources. The pro rata share that is not paid by the municipal electric utilities shall be recovered through federally mandated congestion charges in nonmunicipal electric utility service areas and shall be paid in equal semi-annual payments for a period of not more than five years.

(b) In order to qualify for such an award, any customer shall submit an application, in a form prescribed by the Department of Public Utility Control, to said department. The application shall contain a certification by an independent licensed engineer that the customer-side distributed resource is intended to operate for purposes of reducing customer peak electric loads and that the project is financially viable.

Sec. 20. Section 16-243r of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):

The provisions of sections 7-233y, 16-1, as amended by this act, 16-19ss, 16-32f, 16-50i, 16-50k, 16-50x, 16-243i to 16-243q, inclusive, 16-244c, as amended by this act, 16-244e, 16-245d, 16-245m, 16-245n, as amended by this act, 16-245z and 16-262i and section 21 of public act 05-1 of the June special session*, apply to new customer-side distributed resources and grid-side distributed resources developed in this state that add electric capacity on and after January 1, 2006, and shall also apply to customer-side distributed resources and grid-side distributed resources developed in this state prior to January 1, 2007, that (1) have undergone upgrades that increase the resource's thermal efficiency operating level no fewer than ten percentage points, (2) operate at a thermal efficiency level of at least fifty per cent, and (3) add electric capacity in this state on or after January 1, 2007, provided such measure is in accordance with the provisions of said sections 7-233y, 16-1, as amended by this act, 16-19ss, 16-32f, 16-50i, 16-50k, 16-50x, 16-243i to 16-243q, inclusive, 16-244c, as amended by this act, 16-244e, 16-245d, 16-245m, 16-245n, as amended by this act, 16-245z and 16-262i and section 21 of public act 05-1 of the June special session*.

Sec. 21. (NEW) (Effective January 1, 2008) Any municipality may, by vote of its legislative body or, in a municipality where the legislative body is a town meeting, by vote of the board of selectmen, provide a property tax exemption to any owner of a motor vehicle exempt from sales and use taxes under subdivision (110) or (115) of section 12-412 of the general statutes, as amended by this act.

Sec. 22. Subdivision (110) of section 12-412 of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2008):

(110) On and after July 1, 2000, and prior to July 1, [2002] 2010, the sale of any passenger car that has a United States Environmental Protection Agency estimated city or highway gasoline mileage rating of at least [fifty] forty miles per gallon.

Sec. 23. (NEW) (Effective from passage) As used in sections 24 to 38, inclusive, of this act:

(1) "Energy improvement district distributed resources" means one or more of the following owned, leased, or financed by an Energy Improvement District Board: (A) Customer-side distributed resources, as defined in section 16-1 of the general statutes, as amended by this act; (B) grid-side distributed resources, as defined in said section 16-1; (C) combined heat and power systems, as defined in said section 16-1; and (D) Class III sources, as defined in said section 16-1;

(2) "Project" means the acquisition, purchase, construction, reconstruction, improvement or extension of one or more of energy improvement district distributed resources.

Sec. 24. (NEW) (Effective from passage) (a) Any municipality may, by vote of its legislative body, establish an energy improvement district within such municipality. The affairs of any such district shall be administered by an Energy Improvement District Board. The members of any such board shall be appointed by the chief elected official of the municipality and shall serve for such term as the legislative body may prescribe and until their successors are appointed and have qualified. Vacancies shall be filed by the chief elected official for the unexpired portion of the term. The members of each such board shall serve without compensation, except for necessary expenses.

(b) After a vote by a municipality to establish an energy improvement district, the chief elected official of the municipality shall notify each property owner of record within said district by mail of said action. An owner may record on the land records in the municipality its decision to participate in the energy improvement district and the provisions of sections 24 to 38, inclusive, of this act. Any owner of record, including any new owner of record, may rescind said decision at any time.

Sec. 25. (NEW) (Effective from passage) (a) An Energy Improvement District Board shall fund energy improvement district distributed resources in its district and shall prepare a comprehensive plan, in consultation with the Connecticut Center for Advanced Technology, for the development and financing of such resources, except on state or federally owned properties, with a view to the increase and efficiency, reliability and the furtherance of commerce and industry in the energy improvement district. The board may lease or acquire office space and equip the same with suitable furniture and supplies for the performance of work of the board, and may employ such personnel as may be necessary for such performance. The board also shall have power to:

(1) Sue and be sued;

(2) Have a seal and alter the same;

(3) Confer with any body or official having to do with electric power distribution facilities within and without the district, and hold public hearings as to such facilities;

(4) Confer with electric distribution companies with reference to the development of electric distribution facilities in such district and the coordination of the same;

(5) Determine the location, type, size and construction of energy improvement district distributed resources, subject to the approval of any department, commission or official of the United States, the state or the municipality where federal, state or municipal statute or regulation requires it;

(6) Make surveys, maps and plans for, and estimates of the cost of, the development and operation of requisite energy improvement district distributed resources and for the coordination of such facilities with existing agencies, both public and private, with the view of increasing the efficiency of the electric distribution system in the district and in the furtherance of commerce and industry in the district;

(7) Make contracts and leases, loans and execute all instruments necessary or convenient to carry out their duties under the provision of this section, including the lending of proceeds of bonds issued in accordance with subdivision (9) of this section, to owners, lessees or occupants of facilities in the energy improvement district;

(8) Fix fees, rates, rentals or other charges for the purpose of all energy improvement district distributed resources owned by the Energy Improvements District Board and collect such fees, rates, rentals and other charges for such facilities owned by the board, which fees, rates, rentals or other charges shall be sufficient to comply with all covenants and agreements with the holders of any bonds issued pursuant to section 26 of this act;

(9) Operate and maintain all energy improvement district distributed resources owned or leased by the board and use the revenues from such resources for the corporate purposes of the board in accordance with any covenants or agreements contained in the proceedings authorizing the issuance of bonds pursuant to section 26 of this act;

(10) Accept gifts, grants, loans or contributions from the United States, the state or any agency or instrumentality of either of them, or a person or corporation, by conveyance, bequest or otherwise, and expend the proceeds for any purpose of the board and, as necessary, contract with the United States, the state or any agency or instrumentality of either of them, to accept gifts, grants, loans or contributions on such terms and conditions as may be provided by the law authorizing the same;

(11) Maintain staff to promote and develop the movement of commerce through the energy improvement district; and

(12) Use the officers, employees, facilities and equipment of the municipality, with the consent of the municipality, and pay a proper portion of the compensation or cost.

(b) Nothing in the provisions of sections 24 to 38, inclusive, of this act shall be construed to authorize an Energy Improvement District to:

(1) Be an electric distribution company, as defined in section 16-1 of the general statutes, as amended by this act, or provide electric distribution or electric transmission services, as defined in said section 16-1, or own or operate assets to provide such services;

(2) Be a municipal electric utility, as defined in section 7-233 of the general statutes, or provide the services of a municipal electric utility;

(3) Sell electricity to persons or entities in its municipality outside of the Energy Improvement District;

(4) Undertake any authority or jurisdiction granted by the general statutes to the Connecticut Siting Council, the Department of Public Utility Control, or any other state agency, or to undertake any actions under the jurisdiction of any federal agency; or

(5) Acquire property by eminent domain.

Sec. 26. (NEW) (Effective from passage) (a) An Energy Improvement District Board may, from time to time, issue bonds subject to the approval of the legislative body in the municipality in which the energy improvement district is located, for the purpose of paying all or any part of the cost of acquiring, purchasing, constructing, reconstructing, improving or extending any energy improvement district distributed resources project and acquiring necessary land and equipment thereof, or for any other authorized purpose of the board. The board may issue such types of bonds as it may determine, including, but not limited to, bonds payable as to principal and interest: (1) From its revenues generally; (2) exclusively from the income and revenues of a particular project; or (3) exclusively from the income and revenues of certain designated projects, whether or not they are financed in whole or in part from the proceeds of such bonds. Any such bonds may be additionally secured by a pledge of any grant or contribution from a participating municipality, the state or any political subdivision, agency or instrumentality thereof, any federal agency or any private corporation, copartnership, association or individual, or a pledge of any income or revenues of the board, or a mortgage on any project or other property of the board, provided such pledge shall not create any liability on the entity making such grant or contribution beyond the amount of such grant or contribution. Whenever and for so long as any board has issued and has outstanding bonds, the board shall fix, charge and collect rates, rents, fees and other charges in accordance with section 28 of this act. Neither the members of the board nor any person executing the bonds shall be liable personally on the bonds by reason of the issuance thereof. The bonds and other obligations shall so state on the face, shall not be a debt of the state or any political subdivision thereof, except when the board or a participating municipality which, in accordance with section 35 of this act, has guaranteed payment of principal and of interest on the same, and no person other than the board or such a public body shall be liable thereon, nor shall such bonds or obligations be payable out of any funds or properties other than those of the board or such a participating municipality. Such bonds shall not constitute an indebtedness within the meaning of any statutory limitation on the indebtedness of any participating municipality. Bonds of the board are declared to be issued for an essential public and governmental purpose. In anticipation of the sale of such revenue bonds the board may issue negotiable bond anticipation notes and may renew the same from time to time, but the maximum maturity of any such note, including renewals thereof, shall not exceed five years from the date of issue of the original note. Such notes shall be paid from any revenues of the board available therefor and not otherwise pledged, or from the proceeds of sale of the revenue bonds of the Energy Improvement District Board in anticipation of which they were issued. The notes shall be issued in the same manner as the revenue bonds. Such notes and the resolution or resolutions authorizing the same may contain any provisions, conditions or limitations which a bond resolution of the board may contain.

(b) An Energy Improvement District Board may issue bonds as serial bonds or as term bonds, or both. Bonds shall be authorized by resolution of the members of the authority and shall bear such date or dates, mature at such time or times, not exceeding twenty years from their respective dates, bear interest at such rate or rates, or have provisions for the manner of determining such rate or rates, payable at such time or times, be in such denominations, be in such form, either coupon or registered, carry such registration privileges, be executed in such manner, be payable in lawful money of the United States of America at such place or places, and be subject to such terms of redemption, as such resolution or resolutions may provide. The revenue bonds or notes may be sold at public or private sale for such price or prices as the Energy Improvement District Board shall determine. Pending preparation of the definitive bonds, the Energy Improvement District Board may issue interim receipts or certificates which shall be exchanged for such definitive bonds.

(c) Any resolution or resolutions authorizing any revenue bonds or any issue of revenue bonds may contain provisions, which shall be part of the contract with the holders of the revenue bonds to be authorized, as to: (1) Pledging all or any part of the revenues of a project or any revenue-producing contract or contracts made by the Energy Improvement District Board with any individual, partnership, corporation or association or other body, public or private, to secure the payment of the revenue bonds or of any particular issue of revenue bonds, subject to such agreements with bondholders as may then exist; (2) the rentals, fees and other charges to be charged, and the amounts to be raised in each year thereby, and the use and disposition of the revenues; (3) the setting aside of reserves or sinking funds or other funds or accounts as the board may establish and the regulation and disposition thereof, including requirements that any such funds and accounts be held separate from or not be commingled with other funds of the board; (4) limitations on the right of the board or its agent to restrict and regulate the use of the project; (5) limitations on the purpose to which the proceeds of sale of any issue of revenue bonds then or thereafter to be issued may be applied and pledging such proceeds to secure the payment of the revenue bonds or any issue of the revenue bonds; (6) limitations on the issuance of additional bonds, the terms upon which additional bonds may be issued and secured, the refunding of outstanding bonds; (7) the procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent thereto, and the manner in which such consent may be given; (8) limitations on the amount of moneys derived from the project to be expended for operating, administrative or other expenses of the board; (9) defining the acts or omissions to act that shall constitute a default in the duties of the board to holders of its obligations and providing the rights and remedies of such holders in the event of a default; (10) the mortgaging of a project and the site thereof for the purpose of securing the bondholder; and (11) provisions for the execution of reimbursement agreements or similar agreements in connection with credit facilities, including, but not limited to, letters of credit or policies of bond insurance, remarketing agreements and agreements for the purpose of moderating interest rate fluctuations.

(d) If any member whose signature or a facsimile of whose signature appears on any bonds or coupons ceases to be such member before delivery of such bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes the same as if he had remained in office until such delivery. Notwithstanding the provisions of sections 24 to 38, inclusive, of this act, or any recitals in any bonds issued under the provisions of this section, all such bonds shall be deemed to be negotiable instruments under the provisions of the general statutes.

(e) Unless otherwise provided by the ordinance creating the Energy Improvement District Board, bonds may be issued under the provisions of this section, without obtaining the consent of the state or of any political subdivision thereof, and without any other proceedings or the happening of other conditions or things than those proceedings, conditions or things which are specifically required by sections 23 to 38, inclusive, of this act.

(f) An Energy Improvement District Board may, out of any of any funds available to it, purchase its bonds or notes. The Energy Improvement District Board may hold, pledge, cancel or resell such bonds, subject to and in accordance with agreements with bondholders.

(g) An Energy Improvement District Board shall cause a copy of any bond resolutions adopted by it to be filed for public inspection in its office and in the office of the clerk of each participating municipality and may thereupon cause to be published at least once, in a newspaper published or circulating in each participating municipality, a notice stating the fact and date of such adoption and the places where such bond resolution has been so filed for public inspection and the date of the first publication of such notice and also stating that any action or proceeding of any kind or nature in any court questioning the validity or proper authorization of bonds provided for by the bond resolution, or the validity of any covenants, agreements or contracts provided for by the bond resolution, shall be commenced not later than twenty days after the first publication of such notice. If any such notice is published and if no action or proceeding question the validity or proper authorization of bonds provided for by the bond resolution referred to in such notice, or the validity of any covenants, agreements, contracts provided for by the bond resolution is commenced or instituted not later than twenty days after the first publication of said notice, then all residents and taxpayers and owners of property in each participating municipality and all other persons shall be forever barred and foreclosed from instituting or commencing any action or proceeding in any court, or from pleading any defense to any action or proceeding, questioning the validity or proper authorization of such bonds, or the validity of such covenants, agreements or contracts, and said bonds, covenants, agreements and contracts shall be conclusively deemed to be valid and binding obligations in accordance with their terms and tenor.

(h) Notwithstanding any provision of the general statutes, (1) the state shall not have any liability or responsibility with regard to any obligation issued by the board, and (2) no political subdivision of the state shall have any liability or responsibility with regard to any obligation issued by the board except as expressly provided by sections 24 to 38, inclusive, of this act.

Sec. 27. (NEW) (Effective from passage) An Energy Improvement District Board may secure any bonds issued under the provisions of section 26 of this act by a trust indenture by way of conveyance, deed of trust or mortgage of any project or any other property of the board, whether or not financed in whole or in part from the proceeds of such bonds, or by a trust agreement by and between the board and a corporate trustee, which may be any trust company or bank having the powers of a trust company within or without the state or by both such conveyance, deed of trust or mortgage and indenture or trust agreement. Such trust indenture or agreement may pledge or assign any or all fees, rents and other charges to be received or proceeds of any contract or contracts pledged, and may convey or mortgage any property of the board. Such trust indenture or agreement may contain such provisions for protecting and enforcing the right and remedies of the bondholders as may be reasonable and proper and not in violation of law, including provisions that have been specifically authorized to be included in any resolution or resolutions of the board authorizing the issue of bonds. Any bank or trust company incorporated under the laws of the state may act as depository of the proceeds of such bonds or of revenues or other moneys and may furnish such indemnifying bonds or pledge such securities as may be required by the board. Such trust indenture may set forth rights and remedies of the bondholders and of the trustee, and may restrict the individual right of action by bondholders. In addition to the foregoing, such trust indenture or agreement may contain such other provisions as the board may deem reasonable and proper for the security of the bondholders. All expenses incurred in carrying out the provisions of such trust indenture or agreement may be treated as part of the cost of a project.

Sec. 28. (NEW) (Effective from passage) (a) An Energy Improvement District Board may fix, revise, charge and collect rates, rents, fees and charges for the use of and for the services furnished or to be furnished by each project and to contract with any person, partnership, association or corporation, or other body, public or private, in respect thereof. Such rates, rents, fees and charges shall be fixed and adjusted in respect of the aggregate of rates, rents, fees and charges from such project so as to provide funds sufficient with other revenues, if any, (1) to pay the cost of maintaining, repairing and operating the project and each and every portion thereof, to the extent that the payment of such cost has not otherwise been adequately provided for, (2) to pay the principal of and the interest on outstanding revenue bonds of the board issued in respect of such project as the same shall become due and payable, and (3) to create and maintain reserves required or provided for in any resolution authorizing, or trust agreement securing, such revenue bonds of the board. Such rates, rents, fees and charges shall not be subject to supervision or regulation by any department, commission, board, body, bureau or agency of this state other than the board. A sufficient amount of the revenues derived in respect of a project, except such part of such revenues as may be necessary to pay the cost of maintenance, repair and operation and to provide reserves and for renewals, replacements, extensions, enlargements and improvements as may be provided for in the resolution authorizing the issuance of any revenue bonds of the board or in the trust agreement securing the same, shall be set aside at such regular intervals as may be provided in such resolution or trust agreement in a sinking or other similar fund which is hereby pledged to, and charged with, the payment of the principal of and the interest on such revenue bonds as the same shall become due, and the redemption price or the purchase price of bonds retired by call or purchase as therein provided. Such pledge shall be valid and binding from the time when the pledge is made; the rates, rents, fees and charges and other revenues or other moneys so pledged and thereafter received by the board shall immediately be subject to the lien of any such pledge, without any physical delivery thereof or further act, and the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the board, irrespective of whether such parties have notice thereof. Neither the resolution nor any trust indenture or agreement by which a pledge is created need be filed or recorded except in the records of the board. The use and disposition of moneys to the credit of such sinking or other similar fund shall be subject to the provisions of the resolution authorizing the issuance of such bonds or of such trust agreement. Except as may otherwise be provided in such resolution or such trust indenture or agreement, such sinking or other similar fund shall be a fund for all revenue bonds issued to finance a project of such board without distinction or priority of one over another.

(b) All moneys received by the board pursuant to sections 24 to 38, inclusive, of this act, whether as proceeds from the sale of bonds or as revenues, shall be deemed to be trust funds to be held and applied solely as provided pursuant to this section.

Sec. 29. (NEW) (Effective from passage) Any holder of bonds, notes, certificates or other evidences of borrowing issued under the provisions of section 26 of this act, or of any of the coupons appertaining thereto, and the trustee under any trust indenture or agreement, except to the extent the right may be restricted by such trust indenture or agreement, may, either at law or in equity, by suit, action, injunction, mandamus or other proceedings, protect and enforce any and all rights under the provisions of the general statutes or granted by sections 24 to 38, inclusive, of this act, or under such trust indenture or agreement or the resolution authorizing the issuance of such bonds, notes or certificates, and may enforce and compel the performance of all duties required by said section or by such trust indenture or agreement or solution to be performed by the Energy Improvement District Board or by any officer or agent thereof, including the fixing, charging and collection of fees, rents and other charges.

Sec. 30. (NEW) (Effective from passage) An Energy Improvement District Board, in the exercise of its powers granted pursuant to sections 24 to 38, inclusive, of this act, shall be for the benefit of the inhabitants of the state, for the increase of their commerce and for the promotion of their safety, health, welfare, convenience and prosperity, and as the operation and maintenance of any project which the board is authorized to undertake constitute the performance of an essential governmental function, no board shall be required to pay any taxes or assessments upon any project acquired and constructed by it under the provisions of said sections. The bonds, notes, certificates or other evidences of debt issued under the provisions of section 26 of this act, their transfer and the income therefrom, including any profit made on the sale thereof, shall at all times be free and exempt from taxation by the state and by any political subdivision thereof.

Sec. 31. (NEW) (Effective from passage) Bonds issued by an Energy Improvement District Board pursuant to section 26 of this act, shall be securities in which all public officers and public bodies of the state and its political subdivisions, all insurance companies, trust companies, banking associations, investment companies and executors, administrators, trustees and other fiduciaries may properly and legally invest funds, including capital in their control or belonging to them. Such bonds shall be securities that may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the state for any purpose for which the deposit of bonds or obligations is now or may hereafter be authorized by law.

Sec. 32. (NEW) (Effective from passage) A municipality may, by ordinance, and any other governmental unit may, without any referendum or public or competitive bidding, and any person may sell, lease, lend, grant or convey to an Energy Improvement District Board, or to permit a board to use, maintain or operate as part of any distributed resource facility, any real or personal property that may be necessary or useful and convenient for the purposes of the board and accepted by the board. Any such sale, lease, loan, grant, conveyance or permit may be made or given with or without consideration and for a specified or an unlimited period of time and under any agreement and on any terms and conditions that may be approved by such municipality, governmental unit or person and that may be agreed to by the board in conformity with its contract with the holders of any bonds. Subject to any such contracts with the holders of bonds, the board may enter into and perform any and all agreements with respect to property so purchased, leased, borrowed, received or accepted by it, including agreements for the assumption of principal or interest or both of indebtedness of such municipality, governmental unit or person or of any mortgage or lien existing with respect to such property or for the operation and maintenance of such property as part of any energy improvement district distributed resources facility.

Sec. 33. (NEW) (Effective from passage) A municipality, governmental unit or person may enter into and perform any lease or other agreement with any Energy Improvement District Board for the lease or other agreement with any municipality, governmental unit or person of all or any part of any energy improvement district distributed resource facility or facilities. Any such lease or other agreement may provide for the payment to the board by such municipality, governmental unit or person, annually or otherwise, of such sum or sums of money, computed at fixed amount or by any formula or in any other manner, as may be so fixed or computed. Any such lease or other agreement may be made and entered into for a term beginning currently or at some future or contingent date and with or without consideration and for a specified or unlimited time and on any terms and conditions which may be approved by such municipality, governmental unit or person and which may be agreed to by the board in conformity with its contract with the holders of any bonds, and shall be valid and binding on such municipality, governmental unit or person whether or not an appropriation is made thereby prior to authorization or execution of such lease or other agreement. Such municipality, governmental unit or person shall do all acts and things necessary, convenient or desirable to carry out and perform any such lease or other agreement entered into by it and to provide for the payment or discharge of any obligation thereunder in the same manner as other obligations of such municipality, governmental unit or person.

Sec. 34. (NEW) (Effective from passage) For the purpose of aiding an Energy Improvement District Board, a municipality, by ordinance or by resolution of its legislative body, shall have power from time to time and for such period and upon such terms, with or without consideration, as may be provided by such resolution or ordinance and accepted by the board, (1) to appropriate moneys for the purposes of the board, and to loan or donate such money to the board in such installments and upon such terms as may be agreed upon with the board, (2) to covenant and agree with the board to pay to or on the order of the board annually or at shorter intervals as a subsidy for the promotion of its purposes not more than such sums of money as may be stated in such resolution or ordinance or computed in accordance therewith, (3) upon authorization by it in accordance with law of the performance of any act or thing which it is empowered by law to authorize and perform and after appropriation of the moneys, if any, necessary for such performance, to covenant and agree with the board to do and perform such act or thing and as to the time, manner and other details of its doing and performance, and (4) to appropriate money for all or any part of the cost of acquisition or construction of such facility, and, in accordance with the limitations and any exceptions thereto and in accordance with procedure prescribed by law, to incur indebtedness, borrow money and issue its negotiable bonds for the purpose of financing such distributed resource facility and appropriation, and to pay the proceeds of such bonds to the board.

Sec. 35. (NEW) (Effective from passage) For the purpose of aiding an Energy Improvement District Board in the planning, undertaking, acquisition, construction or operation of any distributed resource facility, a participating municipality may, pursuant to resolution adopted by its legislative body in the manner provided for adoption of a resolution authorizing bonds of such municipality and with or without consideration and upon such terms and conditions as may be agreed to by and between the municipality and the board, unconditionally guarantee the punctual payment of the principal of and interest on any bonds of the board and pledge the full faith and credit of the municipality to the payment thereof. Any guarantee of bonds of the board made pursuant to this section shall be evidenced by endorsement thereof on such bonds, executed in the name of the municipality and on its behalf by such officer thereof as may be designated in the resolution authorizing such guaranty, and such municipality shall thereupon and thereafter be obligated to pay the principal of and interest on said bonds in the same manner and to the same extent as in the case of bonds issued by it. As part of the guarantee of the municipality for payment of principal and interest on the bonds, the municipality may pledge to and agree with the owners of bonds issued under this chapter and with those persons who may enter into contracts with the municipality or the board or any successor agency pursuant to the provisions of this chapter that it will not limit or alter the rights thereby vested in the bond owners, the board or any contracting party until such bonds, together with the interest thereon, are fully met and discharged and such contracts are fully performed on the part of the municipality or the board, provided nothing in this subsection shall preclude such limitation or alteration if and when adequate provisions shall be made by law for the protection of the owners of such bonds of the municipality or the board or those entering into such contracts with the municipality or the board. The board is authorized to include this pledge and undertaking for the municipality in such bonds or contracts. To the extent provided in such agreement or agreements, the obligations of the municipality thereunder shall be obligatory upon the municipality and the inhabitants and property thereof, and thereafter the municipality shall appropriate in each year during the term of such agreement, and there shall be available on or before the date when the same are payable, an amount of money that, together with other revenue available for such purpose, shall be sufficient to pay such principal and interest guaranteed by it and payable thereunder in that year, and there shall be included in the tax levy for each such year in an amount that, together with other revenues available for such purpose, shall be sufficient to meet such appropriation. Any such agreement shall be valid, binding and enforceable against the municipality if approved by action of the legislative body of such municipality. Any such guaranty of bonds of the board may be made, and any resolution authorizing such guaranty may be adopted, notwithstanding any statutory debt or other limitations, but the principal amount of bonds so guaranteed shall, after their issuance, be included in the gross debt of such municipality for the purpose of determining the indebtedness of such municipality under subsection (b) of section 7-374 of the general statutes. The principal amount of bonds so guaranteed and included in gross debt shall be deducted and is declared to be and to constitute a deduction from such gross debt under and for all the purposes of subsection (b) of said section 7-374, (1) from and after the time of issuance of said bonds until the end of the fiscal year beginning next after the completion of acquisition and construction of the distributed resource facility to be financed from the proceeds of such bonds, and (2) during any subsequent fiscal year if the revenues of the board in the preceding fiscal year are sufficient to pay its expenses of operation and maintenance in such year and all amounts payable in such year on account of the principal and interest on all such guaranteed bonds, all bonds of the municipality issued as provided in this section and all bonds of the Energy Improvement District Board issued under section 26 of this act.

Sec. 36. (NEW) (Effective from passage) Any lease or other agreement, and any instruments making or evidencing the same, may be pledged or assigned by the board established pursuant to section 24 of this act to secure its bonds and thereafter may not be modified except as provided by the terms of such instrument or by the terms of such pledge or assignment.

Sec. 37. (NEW) (Effective from passage) All property of an Energy Improvement District Board shall be exempt from levy and sale by virtue of an execution and no execution or other judicial process shall issue against the same nor shall any judgment against the board be a charge or lien upon its property, provided nothing in this section shall apply to or limit the rights of the holder of any bonds to pursue any remedy for the enforcement of any pledge or lien given by the board on its facility revenues or other moneys.

Sec. 38. (NEW) (Effective from passage) An Energy Improvement District Board and the municipality in which any property of the board is located may enter into agreements with respect to the payment by the board to such municipality of annual sums of money in lieu of taxes on such property in such amount as may be agreed upon between the board and the municipality. The board may make, and the municipality may accept, such payments and apply them in the manner in which taxes may be applied in such municipality, provided no such annual payment with respect to any parcel of such property shall exceed the amount of taxes paid thereon for the taxable year immediately prior to the time of its acquisition by the board.

Sec. 39. Subsection (b) of section 16-243a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(b) Each electric public service company, municipal electric energy cooperative and municipal electric utility shall: (1) Purchase any electrical energy and capacity made available, directly by a private power producer or indirectly under subdivision (4) of this subsection; (2) sell backup electricity to any private power producer in its service territory; (3) make such interconnections in accordance with the regulations adopted pursuant to subsection (h) of this section necessary to accomplish such purchases and sales; (4) upon approval by the Department of Public Utility Control of an application filed by a willing private power producer, transmit energy or capacity from the private power producer to any other such company, cooperative or utility or to another facility operated by the private power producer; and (5) offer to operate in parallel with a private power producer. In making a decision on an application filed under subdivision (4) of this subsection, the department shall consider whether such transmission would (A) adversely impact the customers of the company, cooperative or utility which would transmit energy or capacity to the private power producer, (B) result in an uncompensated loss for, or unduly burden, such company, cooperative, utility or private power producer, (C) impair the reliability of service of such company, cooperative or utility, or (D) impair the ability of the company, cooperative or utility to provide adequate service to its customers. The department shall issue a decision on such an application not later than one hundred twenty days after the application is filed, provided, the department may, before the end of such period and upon notifying all parties and intervenors to the proceeding, extend the period by thirty days. If the department does not issue a decision within one hundred twenty days after receiving such an application, or within one hundred fifty days if the department extends the period in accordance with the provisions of this subsection, the application shall be deemed to have been approved. The requirements under subdivisions (3), (4) and (5) of this subsection shall be subject to reasonable standards for operating safety and reliability and the nondiscriminatory assessment of costs against private power producers, approved by the Department of Public Utility Control with respect to electric public service companies or determined by municipal electric energy cooperatives and municipal electric utilities.

Sec. 40. Section 16-243a of the general statutes is amended by adding subsection (h) as follows (Effective October 1, 2007):

(NEW) (h) Not later than January 1, 2008, the Department of Public Utility Control shall issue a final decision regarding interconnection standards that promote the policies of this section and meet or exceed national standards of interconnectivity. If the department does not issue a final decision by October 1, 2008, each electric distribution company, municipal electric energy cooperative and municipal electric utility shall meet the standards set forth in Title 4, Chapter 4, Subchapter 9, "Net Metering and Interconnection Standards for Class I Renewable Energy Systems" of the New Jersey Administrative Code.

Sec. 41. Subsection (a) of section 16-245n of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) For purposes of this section, "renewable energy" means solar photovoltaic energy, solar thermal energy, wind, ocean thermal energy, wave or tidal energy, fuel cells, landfill gas, hydropower that will meet the low-impact standards of the Low-Impact Hydropower Institute, hydrogen production and hydrogen conversion technologies, low emission advanced biomass conversion technologies, alternative fuel, including ethanol, biodiesel, or other fuel produced in Connecticut and derived from agricultural produce, food waste or waste vegetable oil, usable electricity from combined heat and power systems with waste heat recovery systems, thermal storage systems and other energy resources and emerging technologies which have significant potential for commercialization and which do not involve the combustion of coal, petroleum or petroleum products, municipal solid waste or nuclear fission.

Sec. 42. Section 16-243h of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

On and after January 1, 2000, each electric supplier or any electric distribution company providing standard offer, transitional standard offer, standard service or back-up electric generation service, pursuant to section 16-244c, as amended by this act, shall give a credit for any electricity generated by a [residential] customer from a Class I renewable energy source or a hydropower facility that has a nameplate capacity rating of two megawatts or less. The electric distribution company providing electric distribution services to such a customer shall make such interconnections necessary to accomplish such purpose. An electric distribution company, at the request of any residential customer served by such company and if necessary to implement the provisions of this section, shall provide for the installation of metering equipment that (1) measures electricity consumed by such customer from the facilities of the electric distribution company, (2) deducts from the measurement the amount of electricity produced by the customer and not consumed by the customer, and (3) registers, for each billing period, the net amount of electricity either (A) consumed and produced by the customer, or (B) the net amount of electricity produced by the customer. If, in a given monthly billing period, a customer-generator supplies more electricity to the electric distribution system than the electric distribution company or electric supplier delivers to the customer-generator, the electric distribution company and electric supplier shall credit the customer-generator for the excess by reducing the customer-generator's bill for the next monthly billing period to compensate for the excess electricity from the customer-generator in the previous billing period. The electric distribution company and electric supplier shall carry over credit earned from monthly billing period to monthly billing period, and the credit shall accumulate until the end of the annualized period. At the end of each annualized period, the electric distribution company and electric supplier shall compensate the customer-generator for any excess kilowatt-hours generated, at the avoided cost of wholesale power. A [residential] customer who generates electricity from a generating unit with a name plate capacity of more than ten kilowatts of electricity pursuant to the provisions of this section shall be assessed for the competitive transition assessment, pursuant to section 16-245g and the systems benefits charge, pursuant to section 16-245l based on the amount of electricity consumed by the customer from the facilities of the electric distribution company without netting any electricity produced by the customer. For purposes of this section, "residential customer" means a customer of a single-family dwelling or multifamily dwelling consisting of two to four units.

Sec. 43. Section 16-245a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) [On and after January 1, 2006, an] An electric supplier and an electric distribution company providing standard service or supplier of last resort service, pursuant to section 16-244c, as amended by this act, shall demonstrate:

(1) On and after January 1, 2006, that not less than two per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources; [.]

(2) On and after January 1, 2007, not less than three and one-half per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources; [.]

(3) On and after January 1, 2008, not less than five per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources; [.]

(4) On and after January 1, 2009, not less than six per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources; [.]

(5) On and after January 1, 2010, not less than seven per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(6) On and after January 1, 2011, not less than eight per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(7) On and after January 1, 2012, not less than nine per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(8) On and after January 1, 2013, not less than ten per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(9) On and after January 1, 2014, not less than eleven per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(10) On and after January 1, 2015, not less than twelve and one-half per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(11) On and after January 1, 2016, not less than fourteen per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(12) On and after January 1, 2017, not less than fifteen and one-half per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(13) On and after January 1, 2018, not less than seventeen per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(14) On and after January 1, 2019, not less than nineteen and one-half per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(15) On and after January 1, 2020, not less than twenty per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources.

(b) An electric supplier or electric distribution company may satisfy the requirements of this section (1) by purchasing certificates issued by the New England Power Pool Generation Information System, provided the certificates are for (A) energy produced by a generating unit using Class I or Class II renewable energy sources and the generating unit is located in the jurisdiction of the regional independent system operator, or (B) energy imported into the control area of the regional independent system operator pursuant to New England Power Pool Generation Information System Rule 2.7(c), as in effect on January 1, 2006; [or] (2) for those renewable energy certificates under contract to serve end-use customers in the state on or before October 1, 2006, by participating in a renewable energy trading program within said jurisdictions as approved by the Department of Public Utility Control; or (3) by purchasing electricity from residential customers who are net producers.

(c) Any supplier who provides electric generation services solely from a Class II renewable energy source shall not be required to comply with the provisions of this section.

(d) An electric supplier or an electric distribution company shall base its demonstration of generation sources, as required under subsection (a) of this section on historical data, which may consist of data filed with the regional independent system operator.

(e) (1) A supplier or an electric distribution company may make up any deficiency within its renewable energy portfolio within the first three months of the succeeding calendar year or as otherwise provided by generation information system operating rules approved by New England Power Pool or its successor to meet the generation source requirements of subsection (a) of this section for the previous year.

(2) No such supplier or electric distribution company shall receive credit for the current calendar year for generation from Class I or Class II renewable energy sources pursuant to this section where such supplier or distribution company receives credit for the preceding calendar year pursuant to subdivision (1) of this subsection.

(f) The department shall adopt regulations, in accordance with the provisions of chapter 54, to implement the provisions of this section.

Sec. 44. (NEW) (Effective July 1, 2007) (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 general statutes, as amended by this act, 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, 2008, and annually thereafter, such cooperative shall submit such standards to the Renewable Energy Investment Advisory Committee.

Sec. 45. (NEW) (Effective from passage) (a) Notwithstanding the provisions of title 16 of the general statutes, a customer who implements energy conservation or customer-side distributed resources, as defined in section 16-1 of the general statutes, as amended by this act, on or after January 1, 2008, shall be eligible for Class III credits, pursuant to section 16-243q of the general statutes, as amended by this act. The Class III credit shall be not less than one cent per kilowatt hour. For projects receiving conservation and load management funding, twenty-five per cent of the credits earned pursuant to this section shall be aggregated and directed to the customer who implements energy conservation or customer-side distribution resources pursuant to this section with the remainder directed to the Conservation and Load Management Funds. For applications for projects not receiving conservation and load management funding submitted on or after March 9, 2007, seventy-five per cent of the credits earned pursuant to this section shall be aggregated and directed to the customer who implements energy conservation or customer-side distribution resources pursuant to this section with the remainder directed to the Conservation and Load Management Funds. Not later than July 1, 2007, the Department of Public Utility Control shall conduct a contested case proceeding in accordance with the provisions of chapter 54 of the general statutes, to develop a procedure for awarding and aggregating credits pursuant to this section.

(b) In order to be eligible for ongoing Class III credits, the customer shall, annually, submit an application, in a form prescribed by the Department of Public Utility Control, to said department. The application shall require (1) certification by an independent licensed engineer, and (2) (A) the number of kilowatt hours generated from the customer-side distributed resource system for the annual period, or (B) the number of kilowatt hours reduced by the energy conservation investments for the annual period.

(c) For projects that serve residential customers, seventy-five per cent of the credits shall be directed to the Conservation and Load Management Funds.

Sec. 46. Section 16-243q of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) On and after January 1, 2007, each electric distribution company providing standard service pursuant to section 16-244c, as amended by this act, and each electric supplier as defined in section 16-1, as amended by this act, shall demonstrate to the satisfaction of the Department of Public Utility Control that not less than one per cent of the total output of such supplier or such standard service of an electric distribution company shall be obtained from Class III [resources] sources. On and after January 1, 2008, not less than two per cent of the total output of any such supplier or such standard service of an electric distribution company shall, on demonstration satisfactory to the Department of Public Utility Control, be obtained from Class III [resources] sources. On or after January 1, 2009, not less than three per cent of the total output of any such supplier or such standard service of an electric distribution company shall, on demonstration satisfactory to the Department of Public Utility Control, be obtained from Class III [resources] sources. On and after January 1, 2010, not less than four per cent of the total output of any such supplier or such standard service of an electric distribution company shall, on demonstration satisfactory to the Department of Public Utility Control, be obtained from Class III [resources] sources. Electric power obtained from customer-side distributed resources that does not meet air and water quality standards of the Department of Environmental Protection is not eligible for purposes of meeting the percentage standards in this section.

(b) Except as provided in subsection (d) of this section, the Department of Public Utility Control shall assess each electric supplier and each electric distribution company that fails to meet the percentage standards of subsection (a) of this section a charge of up to five and five-tenths cents for each kilowatt hour of electricity that such supplier or company is deficient in meeting such percentage standards. Seventy-five per cent of such assessed charges shall be deposited in the Energy Conservation and Load Management Fund established in section 16-245m, and twenty-five per cent shall be deposited in the Renewable Energy Investment Fund established in section 16-245n, as amended by this act, except that such seventy-five per cent of assessed charges with respect to an electric supplier shall be divided among the Energy Conservation and Load Management Funds of electric distribution companies in proportion to the amount of electricity such electric supplier provides to end use customers in the state using the facilities of each electric distribution company.

(c) An electric supplier or electric distribution company may satisfy the requirements of this section by participating in a conservation and distributed resources trading program approved by the Department of Public Utility Control. Credits created by conservation and customer-side distributed resources shall be allocated to the person that conserved the electricity or installed the project for customer-side distributed resources to which the credit is attributable and to the Energy Conservation and Load Management Fund. Such credits shall be made in the following manner: A minimum of twenty-five per cent of the credits shall be allocated to the person that conserved the electricity or installed the project for customer-side distributed resources to which the energy credit is attributable and the remainder of the credits shall be allocated to the Energy Conservation and Load Management Fund, based on a schedule created by the department no later than January 1, 2007, and reviewed annually thereafter. The department may, in a proceeding and for good cause shown, allocate a larger proportion of such credits to the person who conserved the electricity or installed the customer-side distributed resources. The department shall consider the proportion of investment made by a ratepayer through various ratepayer-funded incentive programs and the resulting reduction in federally mandated congestion charges. The portion allocated to the Energy Conservation and Load Management Fund shall be used for measures that respond to energy demand and for peak reduction programs.

(d) An electric distribution company providing standard service may contract with its wholesale suppliers to comply with the conservation and customer-side distributed resources standards set forth in subsection (a) of this section. The Department of Public Utility Control shall annually conduct a contested case, in accordance with the provisions of chapter 54, to determine whether the electric distribution company's wholesale suppliers met the conservation and distributed resources standards during the preceding year. Any such contract shall include a provision that requires such supplier to pay the electric distribution company in an amount of up to five and one-half cents per kilowatt hour if the wholesale supplier fails to comply with the conservation and distributed resources standards during the subject annual period. The electric distribution company shall immediately transfer seventy-five per cent of any payment received from the wholesale supplier for the failure to meet the conservation and distributed resources standards to the Energy Conservation and Load Management Fund and twenty-five per cent to the Renewable Energy Investment Fund. Any payment made pursuant to this section shall not be considered revenue or income to the electric distribution company.

(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 sources 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] 2008.

Sec. 47. Subdivision (44) of subsection (a) of section 16-1 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(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, a waste heat recovery system installed on or after April 1, 2007, that produces electrical or thermal energy by capturing preexisting waste heat or pressure from industrial or commercial processes, or the electricity savings created at commercial and industrial facilities and residences in this state from conservation and load management programs begun on or after January 1, 2006.

Sec. 48. Subsection (a) of section 22a-6 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) The commissioner may: (1) Adopt, amend or repeal, in accordance with the provisions of chapter 54, such environmental standards, criteria and regulations, and such procedural regulations as are necessary and proper to carry out his functions, powers and duties; (2) enter into contracts with any person, firm, corporation or association to do all things necessary or convenient to carry out the functions, powers and duties of the department; (3) initiate and receive complaints as to any actual or suspected violation of any statute, regulation, permit or order administered, adopted or issued by him. The commissioner shall have the power to hold hearings, administer oaths, take testimony and subpoena witnesses and evidence, enter orders and institute legal proceedings including, but not limited to, suits for injunctions, for the enforcement of any statute, regulation, order or permit administered, adopted or issued by him; (4) in accordance with regulations adopted by him, require, issue, renew, revoke, modify or deny permits, under such conditions as he may prescribe, governing all sources of pollution in Connecticut within his jurisdiction; (5) in accordance with constitutional limitations, enter at all reasonable times, without liability, upon any public or private property, except a private residence, for the purpose of inspection and investigation to ascertain possible violations of any statute, regulation, order or permit administered, adopted or issued by him and the owner, managing agent or occupant of any such property shall permit such entry, and no action for trespass shall lie against the commissioner for such entry, or he may apply to any court having criminal jurisdiction for a warrant to inspect such premises to determine compliance with any statute, regulation, order or permit administered, adopted or enforced by him, provided any information relating to secret processes or methods of manufacture or production ascertained by the commissioner during, or as a result of, any inspection, investigation, hearing or otherwise shall be kept confidential and shall not be disclosed except that, notwithstanding the provisions of subdivision (5) of subsection (b) of section 1-210, such information may be disclosed by the commissioner to the United States Environmental Protection Agency pursuant to the federal Freedom of Information Act of 1976, (5 USC 552) and regulations adopted thereunder or, if such information is submitted after June 4, 1986, to any person pursuant to the federal Clean Water Act (33 USC 1251 et seq.); (6) undertake any studies, inquiries, surveys or analyses he may deem relevant, through the personnel of the department or in cooperation with any public or private agency, to accomplish the functions, powers and duties of the commissioner; (7) require the posting of sufficient performance bond or other security to assure compliance with any permit or order; (8) provide by notice printed on any form that any false statement made thereon or pursuant thereto is punishable as a criminal offense under section 53a-157b; (9) construct or repair or contract for the construction or repair of any dam or flood and erosion control system under his control and management, make or contract for the making of any alteration, repair or addition to any other real asset under his control and management, including rented or leased premises, involving an expenditure of five hundred thousand dollars or less, and, with prior approval of the Commissioner of Public Works, make or contract for the making of any alteration, repair or addition to such other real asset under his control and management involving an expenditure of more than five hundred thousand dollars but not more than one million dollars; (10) in consultation with affected town and watershed organizations, enter into a lease agreement with a private entity to allow the private entity to generate hydroelectricity; (11) by regulations adopted in accordance with the provisions of chapter 54, require the payment of a fee sufficient to cover the reasonable cost of the search, duplication and review of records requested under the Freedom of Information Act, as defined in section 1-200, and the reasonable cost of reviewing and acting upon an application for and monitoring compliance with the terms and conditions of any state or federal permit, license, registration, order, certificate or approval required pursuant to subsection (i) of section 22a-39, subsections (c) and (d) of section 22a-96, subsections (h), (i) and (k) of section 22a-424, and sections 22a-6d, 22a-32, 22a-134a, 22a-134e, 22a-135, 22a-148, 22a-150, 22a-174, 22a-208, 22a-208a, 22a-209, 22a-342, 22a-345, 22a-354i, 22a-361, 22a-363c, 22a-368, 22a-372, 22a-379, 22a-403, 22a-409, 22a-416, 22a-428 to 22a-432, inclusive, 22a-449 and 22a-454 to 22a-454c, inclusive, and Section 401 of the federal Clean Water Act, (33 USC 1341). Such costs may include, but are not limited to the costs of (A) public notice, (B) reviews, inspections and testing incidental to the issuance of and monitoring of compliance with such permits, licenses, orders, certificates and approvals, and (C) surveying and staking boundary lines. The applicant shall pay the fee established in accordance with the provisions of this section prior to the final decision of the commissioner on the application. The commissioner may postpone review of an application until receipt of the payment. Payment of a fee for monitoring compliance with the terms or conditions of a permit shall be at such time as the commissioner deems necessary and is required for an approval to remain valid; and [(11)] (12) by regulations adopted in accordance with the provisions of chapter 54, require the payment of a fee sufficient to cover the reasonable cost of responding to requests for information concerning the status of real estate with regard to compliance with environmental statutes, regulations, permits or orders. Such fee shall be paid by the person requesting such information at the time of the request. Funds not exceeding two hundred thousand dollars received by the commissioner pursuant to subsection (g) of section 22a-174, during the fiscal year ending June 30, 1985, shall be deposited in the General Fund and credited to the appropriations of the Department of Environmental Protection in accordance with the provisions of section 4-86, and such funds shall not lapse until June 30, 1986. In any action brought against any employee of the department acting within his scope of delegated authority in performing any of the above-listed duties, the employee shall be represented by the Attorney General.

Sec. 49. Subsection (a) of section 16-243i 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, not later than January 1, 2006, establish a program to grant awards to retail end use customers of electric distribution companies to fund the capital costs of obtaining projects of customer-side distributed resources, as defined in section 16-1. Any project shall receive a one-time, nonrecurring award in an amount of not less than two hundred dollars and not more than five hundred dollars per kilowatt of capacity for such customer-side distributed resources, recoverable from federally mandated congestion charges, as defined in section 16-1. No such award may be made unless the projected reduction in federally mandated congestion charges attributed to the project for such distributed resources is greater than the amount of the award. The amount of an award shall depend on the impact that the customer-side distributed resources project has on reducing federally mandated congestion charges, as defined in section 16-1, as amended by this act. On and after January 1, 2008, the department shall only grant an award for capacity that exceeds a customer's peak demand during the thirty-six months prior to its application if it finds that an award for such additional capacity provides sufficient net benefits to other customers of the electric distribution company to justify making such additional award. In making its determination, the department shall consider the cost of the award and the projected reduction in the company's costs for energy, installed capacity, forward reserve capacity, locational forward reserve capacity and other factors the department deems relevant. Not later than October 1, 2005, the department shall conduct a contested case proceeding, in accordance with chapter 54, to establish additional standards for the amount of such awards and additional criteria and the process for making such awards.

Sec. 50. Subdivision (57) of section 12-81 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007, and applicable to assessment years commencing on or after October 1, 2007):

(57) (a) [Subject to authorization of the exemption by ordinance in any municipality, any] Any Class I renewable energy source, as defined in section 16-1, or any hydropower facility described in subdivision (27) of said section 16-1, as amended by this act, installed for the generation of electricity for private residential use, provided such installation occurs on or after October 1, 1977, and further provided such installation is for a single family dwelling or multifamily dwelling consisting of two to four units, or any passive or active solar water or space heating system or geothermal energy resource;

(b) Any person claiming the exemption provided in this subdivision for any assessment year shall, on or before the first day of November in such assessment year, file with the assessor or board of assessors in the town in which such hydropower facility, Class I renewable energy source, or passive or active solar water or space heating system or geothermal energy resource is located, written application claiming such exemption. Failure to file such application in the manner and form as provided by such assessor or board within the time limit prescribed shall constitute a waiver of the right to such exemption for such assessment year. Such application shall not be required for any assessment year following that for which the initial application is filed, provided if such hydropower facility, Class I renewable energy source, or passive or active solar water or space heating system or geothermal energy resource is altered in a manner which would require a building permit, such alteration shall be deemed a waiver of the right to such exemption until a new application, applicable with respect to such altered source, is filed and the right to such exemption is established as required initially.

Sec. 51. Subdivision (63) of section 12-81 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007, and applicable to assessment years commencing on or after October 1, 2007):

(63) (a) Subject to authorization of the exemption by ordinance in any municipality and to the provisions of subparagraph (b) of this subdivision, [any solar energy electricity generating system which is not eligible for exemption under subdivision (57) of this section,] any cogeneration system [, or both,] installed on or after July 1, 1981. [,and before October 1, 2006.] The ordinance shall establish the number of years that a system will be exempt from taxation, except that it may not provide for an exemption beyond the first fifteen assessment years following the installation of a system. The ordinance shall prohibit the exemption from applying to additions to resources recovery facilities operating on October 1, 1994, or to resources recovery facilities constructed on and after that date and may prohibit the exemption from applying to property acquired by eminent domain for the purpose of qualifying for the exemption;

(b) As used in this subdivision, [(A) "solar energy electricity generating system" means equipment which is designed, operated and installed as a system which utilizes solar energy as the energy source for at least seventy-five per cent of the electricity produced by the system and meets the standards established by regulation, in accordance with the provisions of chapter 54, by the Secretary of the Office of Policy and Management, and (B)] "cogeneration system" means equipment which is designed, operated and installed as a system which produces, in the same process, electricity and exhaust steam, waste steam, heat or other resultant thermal energy which is used for space or water heating or cooling, industrial, commercial, manufacturing or other useful purposes and which meets standards established by regulation, in accordance with the provisions of chapter 54, by the Secretary of the Office of Policy and Management;

(c) Any municipality which adopts an ordinance authorizing an exemption provided by this subdivision may enter into a written agreement with an applicant for the exemption, which may require the applicant to make payments to the municipality in lieu of taxes. The agreement may vary the amount of the payments in lieu of taxes in each assessment year of the agreement, provided the payment in any assessment year is not greater than the taxes which would otherwise be due in the absence of the exemption. Any agreement negotiated under this subdivision shall be submitted to the legislative body of the municipality for its approval or rejection;

(d) Any person claiming the exemption provided in this subdivision for any assessment year and whose application has been approved in accordance with subparagraph (c) of this subdivision shall, on or before the first day of November in such assessment year, file with the assessor or board of assessors in the town in which the system is located written application claiming the exemption. Failure to file the application in the manner and form as provided by such assessor or board within the time limit prescribed shall constitute a waiver of the right to the exemption for such assessment year. Such application shall not be required for any assessment year following that for which the initial application is filed, provided if such [solar energy electricity generating system or] cogeneration system is altered in a manner which would require a building permit, such alteration shall be deemed a waiver of the right to such exemption until a new application, applicable with respect to such altered system, is filed and the right to such exemption is established as required initially.

Sec. 52. Section 20-340 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

The provisions of this chapter shall not apply to: (1) Persons employed by any federal, state or municipal agency; (2) employees of any public service company regulated by the Department of Public Utility Control or of any corporate affiliate of any such company when the work performed by such affiliate is on behalf of a public service company, but in either case only if the work performed is in connection with the rendition of public utility service, including the installation or maintenance of wire for community antenna television service, or is in connection with the installation or maintenance of wire or telephone sets for single-line telephone service located inside the premises of a consumer; (3) employees of any municipal corporation specially chartered by this state; (4) employees of any contractor while such contractor is performing electrical-line or emergency work for any public service company; (5) persons engaged in the installation, maintenance, repair and service of electrical or other appliances of a size customarily used for domestic use where such installation commences at an outlet receptacle or connection previously installed by persons licensed to do the same and maintenance, repair and service is confined to the appliance itself and its internal operation; (6) employees of industrial firms whose main duties concern the maintenance of the electrical work, plumbing and piping work, solar thermal work, heating, piping, cooling work, sheet metal work, elevator installation, repair and maintenance work, automotive glass work or flat glass work of such firm on its own premises or on premises leased by it for its own use; (7) employees of industrial firms when such employees' main duties concern the fabrication of glass products or electrical, plumbing and piping, fire protection sprinkler systems, solar, heating, piping, cooling, chemical piping, sheet metal or elevator installation, repair and maintenance equipment used in the production of goods sold by industrial firms, except for products, electrical, plumbing and piping systems and repair and maintenance equipment used directly in the production of a product for human consumption; (8) persons performing work necessary to the manufacture or repair of any apparatus, appliances, fixtures, equipment or devices produced by it for sale or lease; (9) employees of stage and theatrical companies performing the operation, installation and maintenance of electrical equipment if such installation commences at an outlet receptacle or connection previously installed by persons licensed to make such installation; (10) employees of carnivals, circuses or similar transient amusement shows who install electrical work, provided such installation shall be subject to the approval of the State Fire Marshal prior to use as otherwise provided by law and shall comply with applicable municipal ordinances and regulations; (11) persons engaged in the installation, maintenance, repair and service of glass or electrical, plumbing, fire protection sprinkler systems, solar, heating, piping, cooling and sheet metal equipment in and about single-family residences owned and occupied or to be occupied by such persons; provided any such installation, maintenance and repair shall be subject to inspection and approval by the building official of the municipality in which such residence is located and shall conform to the requirements of the State Building Code; (12) persons who install, maintain or repair glass in a motor vehicle owned or leased by such persons; (13) persons or entities holding themselves out to be retail sellers of glass products, but not such persons or entities that also engage in automotive glass work or flat glass work; (14) persons who install preglazed or preassembled windows or doors in residential or commercial buildings; (15) persons registered under chapter 400 who install safety-backed mirror products or repair or replace flat glass in sizes not greater than thirty square feet in residential buildings; [and] (16) sheet metal work performed in residential buildings consisting of six units or less by new home construction contractors registered pursuant to chapter 399a, by home improvement contractors registered pursuant to chapter 400 or by persons licensed pursuant to this chapter, when such work is limited to exhaust systems installed for hoods and fans in kitchens and baths, clothes dryer exhaust systems, radon vent systems, fireplaces, fireplace flues, masonry chimneys or prefabricated metal chimneys rated by the Underwriter's Laboratory or installation of stand-alone appliances including wood, pellet or other stand-alone stoves that are installed in residential buildings by such contractors or persons; and (17) employees of or any contractor employed by and under the direction of a properly licensed solar contractor, performing work limited to the hoisting, placement and anchoring of solar collectors, photovoltaic panels, towers or turbines.

Sec. 53. Section 16-244c of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) (1) On and after January 1, 2000, each electric distribution company shall make available to all customers in its service area, the provision of electric generation and distribution services through a standard offer. Under the standard offer, a customer shall receive electric services at a rate established by the Department of Public Utility Control pursuant to subdivision (2) of this subsection. Each electric distribution company shall provide electric generation services in accordance with such option to any customer who affirmatively chooses to receive electric generation services pursuant to the standard offer or does not or is unable to arrange for or maintain electric generation services with an electric supplier. The standard offer shall automatically terminate on January 1, 2004. While providing electric generation services under the standard offer, an electric distribution company may provide electric generation services through any of its generation entities or affiliates, provided such entities or affiliates are licensed pursuant to section 16-245.

(2) Not later than October 1, 1999, the Department of Public Utility Control shall establish the standard offer for each electric distribution company, effective January 1, 2000, which shall allocate the costs of such company among electric transmission and distribution services, electric generation services, the competitive transition assessment and the systems benefits charge. The department shall hold a hearing that shall be conducted as a contested case in accordance with chapter 54 to establish the standard offer. The standard offer shall provide that the total rate charged under the standard offer, including electric transmission and distribution services, the conservation and load management program charge described in section 16-245m, the renewable energy investment charge described in section 16-245n, electric generation services, the competitive transition assessment and the systems benefits charge shall be at least ten per cent less than the base rates, as defined in section 16-244a, in effect on December 31, 1996. The standard offer shall be adjusted to the extent of any increase or decrease in state taxes attributable to sections 12-264 and 12-265 and any other increase or decrease in state or federal taxes resulting from a change in state or federal law and shall continue to be adjusted during such period pursuant to section 16-19b. Notwithstanding the provisions of section 16-19b, the provisions of said section 16-19b shall apply to electric distribution companies. The standard offer may be adjusted, by an increase or decrease, to the extent approved by the department, in the event that (A) the revenue requirements of the company are affected as the result of changes in (i) legislative enactments other than public act 98-28*, (ii) administrative requirements, or (iii) accounting standards occurring after July 1, 1998, provided such accounting standards are adopted by entities independent of the company that have authority to issue such standards, or (B) an electric distribution company incurs extraordinary and unanticipated expenses required for the provision of safe and reliable electric service to the extent necessary to provide such service. Savings attributable to a reduction in taxes shall not be shifted between customer classes.

(3) The price reduction provided in subdivision (2) of this subsection shall not apply to customers who, on or after July 1, 1998, are purchasing electric services from an electric company or electric distribution company, as the case may be, under a special contract or flexible rate tariff, and the company's filed standard offer tariffs shall reflect that such customers shall not receive the standard offer price reduction.

(b) (1) (A) On and after January 1, 2004, each electric distribution company shall make available to all customers in its service area, the provision of electric generation and distribution services through a transitional standard offer. Under the transitional standard offer, a customer shall receive electric services at a rate established by the Department of Public Utility Control pursuant to subdivision (2) of this subsection. Each electric distribution company shall provide electric generation services in accordance with such option to any customer who affirmatively chooses to receive electric generation services pursuant to the transitional standard offer or does not or is unable to arrange for or maintain electric generation services with an electric supplier. The transitional standard offer shall terminate on December 31, 2006. While providing electric generation services under the transitional standard offer, an electric distribution company may provide electric generation services through any of its generation entities or affiliates, provided such entities or affiliates are licensed pursuant to section 16-245.

(B) The department shall conduct a proceeding to determine whether a practical, effective, and cost-effective process exists under which an electric customer, when initiating electric service, may receive information regarding selecting electric generating services from a qualified entity. The department shall complete such proceeding on or before December 1, 2005, and shall implement the resulting decision on or before March 1, 2006, or on such later date that the department considers appropriate. An electric distribution company's costs of participating in the proceeding and implementing the results of the department's decision shall be recoverable by the company as generation services costs through an adjustment mechanism as approved by the department.

(2) (A) Not later than December 15, 2003, the Department of Public Utility Control shall establish the transitional standard offer for each electric distribution company, effective January 1, 2004.

(B) The department shall hold a hearing that shall be conducted as a contested case in accordance with chapter 54 to establish the transitional standard offer. The transitional standard offer shall provide that the total rate charged under the transitional standard offer, including electric transmission and distribution services, the conservation and load management program charge described in section 16-245m, the renewable energy investment charge described in section 16-245n, electric generation services, the competitive transition assessment and the systems benefits charge, and excluding federally mandated congestion costs, shall not exceed the base rates, as defined in section 16-244a, in effect on December 31, 1996, excluding any rate reduction ordered by the department on September 26, 2002.

(C) (i) Each electric distribution company shall, on or before January 1, 2004, file with the department an application for an amendment of rates pursuant to section 16-19, which application shall include a four-year plan for the provision of electric transmission and distribution services. The department shall conduct a contested case proceeding pursuant to sections 16-19 and 16-19e, as amended by this act, to approve, reject or modify the application and plan. Upon the approval of such plan, as filed or as modified by the department, the department shall order that such plan shall establish the electric transmission and distribution services component of the transitional standard offer.

(ii) Notwithstanding the provisions of this subparagraph, an electric distribution company that, on or after September 1, 2002, completed a proceeding pursuant to sections 16-19 and 16-19e, shall not be required to file an application for an amendment of rates as required by this subparagraph. The department shall establish the electric transmission and distribution services component of the transitional standard offer for any such company equal to the electric transmission and distribution services component of the standard offer established pursuant to subsection (a) of this section in effect on July 1, 2003, for such company. If such electric distribution company applies to the department, pursuant to section 16-19, for an amendment of its rates on or before December 31, 2006, the application of the electric distribution company shall include a four-year plan.

(D) The transitional standard offer (i) shall be adjusted to the extent of any increase or decrease in state taxes attributable to sections 12-264 and 12-265 and any other increase or decrease in state or federal taxes resulting from a change in state or federal law, (ii) shall be adjusted to provide for the cost of contracts under subdivision (2) of subsection (j) of this section and the administrative costs for the procurement of such contracts, and (iii) shall continue to be adjusted during such period pursuant to section 16-19b. Savings attributable to a reduction in taxes shall not be shifted between customer classes. Notwithstanding the provisions of section 16-19b, the provisions of section 16-19b shall apply to electric distribution companies.

(E) The transitional standard offer may be adjusted, by an increase or decrease, to the extent approved by the department, in the event that (i) the revenue requirements of the company are affected as the result of changes in (I) legislative enactments other than public act 03-135* or public act 98-28*, (II) administrative requirements, or (III) accounting standards adopted after July 1, 2003, provided such accounting standards are adopted by entities that are independent of the company and have authority to issue such standards, or (ii) an electric distribution company incurs extraordinary and unanticipated expenses required for the provision of safe and reliable electric service to the extent necessary to provide such service.

(3) The price provided in subdivision (2) of this subsection shall not apply to customers who, on or after July 1, 2003, purchase electric services from an electric company or electric distribution company, as the case may be, under a special contract or flexible rate tariff, provided the company's filed transitional standard offer tariffs shall reflect that such customers shall not receive the transitional standard offer price during the term of said contract or tariff.

(4) (A) In addition to its costs received pursuant to subsection (h) of this section, as compensation for providing transitional standard offer service, each electric distribution company shall receive an amount equal to five-tenths of one mill per kilowatt hour. Revenues from such compensation shall not be included in calculating the electric distribution company's earnings for purposes of, or in determining whether its rates are just and reasonable under, sections 16-19, 16-19a and 16-19e, including an earnings sharing mechanism. In addition, each electric distribution company may earn compensation for mitigating the prices of the contracts for the provision of electric generation services, as provided in subdivision (2) of this subsection.

(B) The department shall conduct a contested case proceeding pursuant to the provisions of chapter 54 to establish an incentive plan for the procurement of long-term contracts for transitional standard offer service by an electric distribution company. The incentive plan shall be based upon a comparison of the actual average firm full requirements service contract price for electricity obtained by the electric distribution company compared to the regional average firm full requirements service contract price for electricity, adjusted for such variables as the department deems appropriate, including, but not limited to, differences in locational marginal pricing. If the actual average firm full requirements service contract price obtained by the electric distribution company is less than the actual regional average firm full requirements service contract price for the previous year, the department shall split five-tenths of one mill per kilowatt hour equally between ratepayers and the company. Revenues from such incentive plan shall not be included in calculating the electric distribution company's earnings for purposes of, or in determining whether its rates are just and reasonable under sections 16-19, 16-19a and 16-19e. The department may, as it deems necessary, retain a third party entity with expertise in energy procurement to assist with the development of such incentive plan.

(c) (1) On and after January 1, 2007, each electric distribution company shall provide electric generation services through standard service to any customer who (A) does not arrange for or is not receiving electric generation services from an electric supplier [,] and [(B) does not use a demand meter or] has a maximum demand of less than five hundred kilowatts, and (B) school districts or municipalities.

(2) Not later than October 1, 2006, and [periodically as required by subdivision (3) of this subsection, but not more often than every calendar quarter] annually thereafter, the Department of Public Utility Control shall establish the standard service price for such customers pursuant to [subdivision (3) of] this subsection, except the department may adjust the price more frequently if it determines that such adjustment would be in the best interest of ratepayers, but not more than once per calendar quarter. Each electric distribution company shall recover the actual net costs of procuring and providing electric generation services pursuant to this subsection, provided such company mitigates the costs it incurs for the procurement of electric generation services for customers who are no longer receiving service pursuant to this subsection.

(3) An electric distribution company providing electric generation services pursuant to this subsection shall mitigate the variation of the price of the service offered to its customers by procuring electric generation services contracts in the manner prescribed in a plan approved by the department. Such plan shall require the procurement of a portfolio of service contracts sufficient to meet the projected load of the electric distribution company. Such plan shall require that the portfolio of service contracts be procured in an overlapping pattern of fixed periods at such times and in such manner and duration as the department determines to be most likely to produce just, reasonable and reasonably stable retail rates while reflecting underlying wholesale market prices over time. The portfolio of contracts shall be assembled in such manner as to invite competition; guard against favoritism, improvidence, extravagance, fraud and corruption; and secure a reliable electricity supply while avoiding unusual, anomalous or excessive pricing. The portfolio of contracts procured under such plan shall be for terms of not less than six months, provided contracts for shorter periods may be procured under such conditions as the department shall prescribe to (A) ensure for end-use customers the lowest rates possible, [for end-use customers] giving due consideration to risk and amount of volatility in the overall ratio; (B) ensure reliable service under extraordinary circumstances; and (C) ensure the prudent management of the contract portfolio. An electric distribution company may receive a bid for an electric generation services contract from any of its generation entities or affiliates, provided such generation entity or affiliate submits its bid the business day preceding the first day on which an unaffiliated electric supplier may submit its bid and further provided the electric distribution company and the generation entity or affiliate are in compliance with the code of conduct established in section 16-244h.

(4) The department, in consultation with the Office of Consumer Counsel, shall retain the services of a third-party entity with expertise in the area of energy procurement to oversee the initial development of the request for proposals and the procurement of contracts by an electric distribution company for the provision of electric generation services offered pursuant to this subsection. Costs associated with the retention of such third-party entity shall be included in the cost of electric generation services that is included in such price.

(5) Each bidder for a standard service contract shall submit its bid to the electric distribution company and the third-party entity who shall jointly review the bids, conduct a cost-based analysis of such bids and submit an overview of all bids together with a joint recommendation to the department as to the preferred bidders. The department shall make available to the Office of Consumer Counsel and the Attorney General all bids and any cost-based analysis of such bids it receives pursuant to this subsection, provided the bids and any cost-based analysis of such bids shall not be subject to disclosure under the Freedom of Information Act for a period of three months. The department may, within ten business days of submission of the overview, reject the recommendation regarding preferred bidders if the bids are not in the best interest of the customer. In analyzing the bids, the department shall determine if they are consistent with the plan approved pursuant to section 55 of this act. In the event that the department rejects the preferred bids, the electric distribution company and the third-party entity shall rebid the service pursuant to this subdivision.

(6) Upon approval of the preferred bids by the department, the respective electric distribution company shall enter into contracts with approved bidders. All bids received by the department during the procurement process shall be available for public review three months after department approval or rejection and shall include written reasons for rejection and findings of fact, as applicable.

(7) Not later than October 1, 2009, and biennially thereafter, the department shall conduct a contested case proceeding in accordance with chapter 54 to review the efficacy of the process of procuring contracts pursuant to this subsection including as assessment of the extent to which the standards set forth in sections 55 and 58 of this act are met.

(d) (1) [Notwithstanding] Not later than January 1, 2008, and on a continuing basis, notwithstanding the provisions of this section regarding the electric generation services component of the transitional standard offer or the procurement of electric generation services under standard service, section 16-244h or 16-245o, the Department of Public Utility Control [may, from time to time, direct an electric distribution company] shall direct the electric distribution companies to offer, through an electric supplier or electric suppliers, [before January 1, 2007, one or more alternative transitional standard offer options or, on or after January 1, 2007,] one or more [alternative standard] renewable service options. Such [alternative] renewable service options shall include, but not be limited to, an option that consists of the provision of electric generation services that exceed the renewable portfolio standards established in section 16-245a and an option that allows consumers to purchase renewable energy directly and may include an option that utilizes strategies or technologies that reduce the overall consumption of electricity of the customer.

(2) (A) The department shall develop such [alternative] renewable service option or options in [a contested case] contested cases, as necessary, conducted in accordance with the provisions of chapter 54. The department shall determine the terms and conditions of such [alternative] renewable service option or options, including, but not limited to, (i) the minimum contract terms, including pricing, length and termination of the contract, and (ii) the minimum percentage of electricity derived from Class I or Class II renewable energy sources, if applicable. The electric distribution [company] companies shall, under the supervision of the department, subsequently conduct a bidding process in order to solicit electric suppliers to provide such [alternative] renewable service option or options.

(B) The department may reject some or all of the bids received pursuant to the bidding process.

(3) The department may require an electric supplier to provide forms of assurance to satisfy the department that the contracts resulting from the bidding process will be fulfilled.

(4) An electric supplier who fails to fulfill its contractual obligations resulting from this subdivision shall be subject to civil penalties, in accordance with the provisions of section 16-41, or the suspension or revocation of such supplier's license or a prohibition on the acceptance of new customers, following a hearing that is conducted as a contested case, in accordance with the provisions of chapter 54.

(e) (1) On and after January 1, 2007, an electric distribution company shall serve customers that are not eligible to receive standard service pursuant to subsection (c) of this section as the supplier of last resort. This subsection shall not apply to customers purchasing power under contracts entered into pursuant to section 16-19hh. Any customer previously receiving electric generation services from an electric supplier shall not be eligible to receive supplier of last resort service pursuant to this subsection unless such customer agrees to receive supplier of last resort service for a period of not less than one year.

(2) An electric distribution company shall procure electricity annually to provide electric generation services to customers pursuant to this subsection. The Department of Public Utility Control shall determine a price for such customers that reflects the full cost of providing the electricity on a monthly basis and that is consistent with the approved integrated resource plan pursuant to sections 55 and 58 of this act or, on a alternative basis as determined pursuant to subdivision (3) of this subsection. Each electric distribution company shall recover the actual net costs of procuring and providing electric generation services pursuant to this subsection, provided such company mitigates the costs it incurs for the procurement of electric generation services for customers that are no longer receiving service pursuant to this subsection.

(3) On or after July 1, 2008, the Department of Public Utility Control may conduct a contested case proceeding, in accordance with the provisions of chapter 54, to study the frequency with which it should determine the price for supplier of last resort service. All bids received by the department pursuant to this section shall be available for public review six months after department approval or rejection.

(f) On and after January 1, 2000, and until such time the regional independent system operator implements procedures for the provision of back-up power to the satisfaction of the Department of Public Utility Control, each electric distribution company shall provide electric generation services to any customer who has entered into a service contract with an electric supplier that fails to provide electric generation services for reasons other than the customer's failure to pay for such services. Between January 1, 2000, and December 31, 2006, an electric distribution company may procure electric generation services through a competitive bidding process or through any of its generation entities or affiliates. On and after January 1, 2007, such company shall procure electric generation services through a competitive bidding process pursuant to a plan submitted by the electric distribution company and approved by the department. Such company may procure electric generation services through any of its generation entities or affiliates, provided such entity or affiliate is the lowest qualified bidder and provided further any such entity or affiliate is licensed pursuant to section 16-245.

(g) An electric distribution company is not required to be licensed pursuant to section 16-245 to provide standard offer electric generation services in accordance with subsection (a) of this section, transitional standard offer service pursuant to subsection (b) of this section, standard service pursuant to subsection (c) of this section, supplier of last resort service pursuant to subsection (e) of this section or back-up electric generation service pursuant to subsection (f) of this section.

(h) The electric distribution company shall be entitled to recover reasonable costs incurred as a result of providing standard offer electric generation services pursuant to the provisions of subsection (a) of this section, transitional standard offer service pursuant to subsection (b) of this section, standard service pursuant to subsection (c) of this section or back-up electric generation service pursuant to subsection (f) of this section. The provisions of this section and section 16-244a shall satisfy the requirements of section 16-19a until January 1, 2007.

(i) The Department of Public Utility Control shall establish, by regulations adopted pursuant to chapter 54, procedures for when and how a customer is notified that his electric supplier has defaulted and of the need for the customer to choose a new electric supplier within a reasonable period of time.

(j) (1) Notwithstanding the provisions of subsection (d) of this section regarding an alternative transitional standard offer option or an alternative standard service option, an electric distribution company providing transitional standard offer service, standard service, supplier of last resort service or back-up electric generation service in accordance with this section shall contract with its wholesale suppliers to comply with the renewable portfolio standards. The Department of Public Utility Control shall annually conduct a contested case, in accordance with the provisions of chapter 54, in order to determine whether the electric distribution company's wholesale suppliers met the renewable portfolio standards during the preceding year. An electric distribution company shall include a provision in its contract with each wholesale supplier that requires the wholesale supplier to pay the electric distribution company an amount of five and one-half cents per kilowatt hour if the wholesale supplier fails to comply with the renewable portfolio standards during the subject annual period. The electric distribution company shall promptly transfer any payment received from the wholesale supplier for the failure to meet the renewable portfolio standards to the Renewable Energy Investment Fund for the development of Class I renewable energy sources. Any payment made pursuant to this section shall not be considered revenue or income to the electric distribution company.

(2) Notwithstanding the provisions of subsection (d) of this section regarding an alternative transitional standard offer option or an alternative standard service option, an electric distribution company providing transitional standard offer service, standard service, supplier of last resort service or back-up electric generation service in accordance with this section shall, not later than July 1, 2008, file with the Department of Public Utility Control for its approval one or more long-term power purchase contracts from Class I renewable energy source projects that receive funding from the Renewable Energy Investment Fund and that are not less than one megawatt in size, at a price that is either, at the determination of the project owner, (A) not more than the total of the comparable wholesale market price for generation plus five and one-half cents per kilowatt hour, or (B) fifty per cent of the wholesale market electricity cost at the point at which transmission lines intersect with each other or interface with the distribution system, plus the project cost of fuel indexed to natural gas futures contracts on the New York Mercantile Exchange at the natural gas pipeline interchange located in Vermillion Parish, Louisiana that serves as the delivery point for such futures contracts, plus the fuel delivery charge for transporting fuel to the project, plus five and one-half cents per kilowatt hour. In its approval of such contracts, the department shall give preference to purchase contracts from those projects that would provide a financial benefit to ratepayers or would enhance the reliability of the electric transmission system of the state. Such projects shall be located in this state. The owner of a fuel cell project principally manufactured in this state shall be allocated all available air emissions credits and tax credits attributable to the project and no less than fifty per cent of the energy credits in the Class I renewable energy credits program established in section 16-245a attributable to the project. [Such] On and after October 1, 2007, and until September 30, 2008, such contracts shall be comprised of not less than a total, apportioned among each electric distribution company, of one hundred twenty-five megawatts; and on and after October 1, 2008, such contracts shall be comprised of not less than a total, apportioned among each electrical distribution company, of one hundred fifty megawatts. The cost of such contracts and the administrative costs for the procurement of such contracts directly incurred shall be eligible for inclusion in the adjustment to the transitional standard offer as provided in this section and any subsequent rates for standard service, provided such contracts are for a period of time sufficient to provide financing for such projects, but not less than ten years, and are for projects which began operation on or after July 1, 2003. Except as provided in this subdivision, the amount from Class I renewable energy sources contracted under such contracts shall be applied to reduce the applicable Class I renewable energy source portfolio standards. For purposes of this subdivision, the department's determination of the comparable wholesale market price for generation shall be based upon a reasonable estimate. On or before September 1, 2007, the department, in consultation with the Office of Consumer Counsel and the Renewable Energy Investments Advisory Council, shall study the operation of such renewable energy contracts and report its findings and recommendations to the joint standing committee of the General Assembly having cognizance of matters relating to energy.

(k) On or before June 30, 2009, notwithstanding the process in subsection (c) of this section, any electric distribution company may enter into a tentative proposed contract for standard service or last resort service. Such tentative contract shall be subject to the approval of the Department of Public Utility Control, pursuant to sections 16-19 and 16-19e, as amended by this act.

Sec. 54. (NEW) (Effective from passage) If, based on the proposals requested pursuant to section 16-243m of the general statutes, the Department of Public Utility Control determines that the state needs peaking generation, the department shall, for every megawatt of peaking generation awarded to a nonutility generator, direct the distribution companies to submit bids for an at least equal amount of megawatts of peaking generation. Each distribution company may submit proposals in proportion to their relative share of customer load in the state. An electric distribution company submitting a proposal pursuant to this subsection shall (1) include its full projected costs, such that any project costs recovered from or defrayed by ratepayers are included in the projected costs, and (2) demonstrate to the department that its proposal is not supported in any form of cross subsidization by affiliated entities. The department may request that the electric distribution company submitting a proposal submit further information that the department determines to be in the public interest, which the department may use in evaluating the proposal. The department shall reject proposals that it determines will cost more than the median cost of the proposals approved pursuant to this section. The department may, pursuant to section 16-19e of the general statutes, as amended by this act, reject proposals that are not in the best interests of customers. An electric distribution company, in an annual retail generation rate contested case, shall be entitled to recover its prudently incurred costs of such project, including, but not limited to, capital costs, operation and maintenance expenses, depreciation, fuel costs, taxes and other governmental charges and a reasonable rate of return on equity. The department shall review such recovery of costs consistent with the principles set forth in sections 16-19, 16-19b and 16-19e of the general statutes, as amended by this act, provided the return on equity associated with such project shall be established in the initial annual contested case proceeding under this subsection and updated at least once every four years.

Sec. 55. (NEW) (Effective from passage) (a) The electric distribution companies shall conduct an energy and capacity resource assessment and develop a comprehensive plan for the procurement of energy resources, including, but not limited to, conventional and renewable generating facilities, energy efficiency, load management, demand response, combined heat and power facilities and distributed generation to meet the projected requirements of their customers in a manner that minimizes the cost of such resources to customers over time and maximizes consumer benefits consistent with the state's environmental goals and standards. On or before January 1, 2008, and every three years thereafter, the companies shall submit to the Connecticut Energy Advisory Board, established pursuant to section 16a-3 of the general statutes, as amended by this act, an assessment of (1) the energy and capacity requirements of customers for the next three, five and ten years, (2) the impact of current and projected environmental standards, including, but not limited to, those related to greenhouse gas emissions and the federal Clean Air Act goals and how different resources could help achieve those standards and goals, (3) energy security and economic risks associated with potential energy resources, and (4) the estimated lifetime cost and availability of potential energy resources.

(b) Resource needs shall first be met through all available energy efficiency and demand reduction resources that are cost effective, reliable and feasible. The plan shall specify (1) the total amount of energy and capacity resources needed to meet the requirements of all customers, (2) the extent to which demand side measures, including efficiency, conservation, demand response and load management can cost-effectively meet these needs, (3) needs for generating capacity and transmission and distribution improvements, (4) how the development of such resources will reduce and stabilize the costs of electricity to consumers, and (5) the manner in which each of the proposed resources should be procured, including the optimal contract periods for various resources.

(c) The procurement plan shall consider: (1) Approaches to maximizing the impact of demand side measures; (2) the extent to which generation needs can be met by renewable and combined heat and power facilities and by the impact of regional market incentives; (3) types and locations for generation that would optimize the generation portfolio within the state; (4) fuel types, diversity, availability, firmness of supply and security and environmental impacts thereof, including impacts on meeting the state's greenhouse gas emission goals; (5) reliability, peak load and energy forecasts, system contingencies and existing resource availabilities; (6) import limitations and the appropriate reliance on such imports; (7) the costs and benefits of options for the ownership of energy resources, including ownership by an electric distribution company; (8) if it is in the best interest of customers, how new resources could be integrated into the standard service and last-resort service provided pursuant to section 16-244c of the general statutes, as amended by this act; and (9) the impact of the plan on the costs of electric customers, including, but not limited to, effects on capacity and energy costs, rate stability and affordability for low-income customers.

(d) The board, in consultation with the regional independent system operator and in-state generators, shall review and approve the proposed procurement plan as submitted not later than one hundred twenty days after receipt. For the purpose of reviewing the plan, the Commissioners of Transportation and Agriculture, or their respective designees, shall not participate. The companies shall provide any additional information requested by the board that is relevant to the consideration of the procurement plan. In the course of conducting such review, the board may retain the services of a third-party entity with experience in the area of energy procurement and may consult with the regional independent system operator. The board shall submit the reviewed plan, together with a statement of any unresolved issues, to the Department of Public Utility Control. The department shall consider the plan in an uncontested proceeding and shall provide an opportunity for interested parties to submit comments regarding the plan. Not later than one hundred twenty days after submission of the plan, the department shall approve, or modify and approve, the plan.

Sec. 56. (NEW) (Effective from passage) (a) The Department of Public Utility Control shall implement the procurement plan established in section 55 of this act by (1) issuing requests for proposals pursuant to section 58 of this act to meet specified energy resource needs set forth in the plan or by directing the electric distribution companies to issue such requests for proposals, (2) directing the electric distribution companies to incorporate additional demand-side measures set forth in the plan into the comprehensive conservation and load management plan prepared pursuant to section 16-245m of the general statutes for review by the Energy Conservation Management Board, (3) directing the distribution companies to submit proposals for specific transmission or distribution improvements or projects set forth in the plan, or (4) taking other actions within its authority to implement the plan.

(b) Effective January 1, 2008, until the comprehensive plan is implemented by the department, the electric distribution companies shall include all available energy efficiency and demand reduction resources that are cost effective, reliable and feasible in the comprehensive conservation and load management plan prepared pursuant to section 16-245m of the general statutes for review by the Energy Conservation Management Board.

Sec. 57. Section 16a-3 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) There is established a Connecticut Energy Advisory Board consisting of [nine] sixteen members, including the Commissioner of Environmental Protection, [the chairperson of the Public Utilities Control Authority,] the Commissioner of Transportation, the Consumer Counsel, the Commissioner of Agriculture, and the Secretary of the Office of Policy and Management or their respective designees. The Governor shall appoint [one member] a representative of an environmental organization knowledgeable in energy efficiency programs, a representative of in-state generators, a representative of a consumer advocacy organization, a representative of a state-wide business association, a representative of a chamber of commerce, a representative of a state-wide manufacturing association, a representative of low-income ratepayers and a representative of state residents, in general, with expertise in energy issues. The Governor, the president pro tempore of the Senate [shall appoint one member,] and the speaker of the House of Representatives shall each appoint one member [, all] of the public, each of whom shall be considered an expert in electricity, generation, procurement or conservation programs and shall serve in accordance with section 4-1a. No appointee may be employed by, or a consultant of, a public service company, as defined in section 16-1, as amended by this act, or an electric supplier, as defined in section 16-1, as amended by this act, or an affiliate or subsidiary of such company or supplier.

(b) The board shall, (1) prepare an annual report pursuant to section 16a-7a; (2) represent the state in regional energy system planning processes conducted by the regional independent system operator, as defined in section 16-1, as amended by this act; (3) encourage representatives from the municipalities that are affected by a proposed project of regional significance to participate in regional energy system planning processes conducted by the regional independent system operator; (4) issue a request-for-proposal in accordance with subsections (b) and (c) of section 16a-7c; (5) evaluate the proposals received pursuant to the request-for-proposal in accordance with subsection (f) of section 16a-7c; (6) participate in a forecast proceeding conducted pursuant to subsection (a) of section 16-50r; [and] (7) participate in a life-cycle proceeding conducted pursuant to subsection (b) of section 16-50r; and (8) review the procurement plan submitted by the electric distribution companies pursuant to section 55 of this act.

(c) The board shall elect a chairman and a vice-chairman from among its members and shall adopt such rules of procedure as are necessary to carry out its functions.

(d) The board shall convene its first meeting not later than September 1, 2003. A quorum of the board shall consist of two-thirds of the members currently serving on the board.

(e) The board shall employ such staff as is required for the proper discharge of its duties. The board shall also retain any third-party consultants it deems necessary to accomplish the goals set forth in subsection (b) of this section. The board shall annually submit to the Department of Public Utility Control a proposal regarding the level of funding required for the discharge of its duties, which proposal shall be approved by the department either as submitted or as modified by the department.

(f) The Connecticut Energy Advisory Board shall be within the Office of Policy and Management for administrative purposes only.

Sec. 58. (NEW) (Effective from passage) (a) Pursuant to the assessment conducted under section 55 of this act, the Department of Public Utility Control may, from time to time, conduct a contested case proceeding to develop and issue a request for proposals to solicit the development of demand response, efficiency and load management and new, expanded or repowered cost-of-service generation. A person that is not an electric distribution company submitting a proposal pursuant to this subsection shall include draft contracts containing information required by subsection (d) of this section in its submission, with compensation based on cost-of-service. The department may request that a person submitting a proposal submit further information that the department determines to be in the public interest, which the department may use in evaluating the proposal. The department shall approve contracts consistent with the principles set forth in sections 16-19, 16-19b and 16-19e of the general statutes, as amended by this act. The department shall reject proposals that are not in the best interests of customers.

(b) The Department of Public Utility Control shall evaluate proposals received pursuant to subsection (a) of this section and may approve one or more of such proposals. The department shall evaluate the proposals based on consistency with environmental sustainability, reduction and stabilization of electric rates, the promotion of fuel diversity and the reduction or overall minimization of increases in greenhouse gas emissions. The department shall only approve such proposals that are in the best long-term interest of the customers of the state. All bids received by the department pursuant to this section shall be available for public review six months after department approval or rejection.

(c) The Department of Public Utility Control shall publish requests for proposals under this section in one or more newspapers or periodicals, as selected by the department, and shall post such request for proposals on its web site. The department may retain the services of a third-party entity with expertise in the area of energy procurement to oversee the development of the requests for proposals and to assist the department in its approval of proposals pursuant to this section. The reasonable and proper expenses for retaining such third-party entity shall be recoverable through federally mandated congestion charges, as defined in section 16-1 of the general statutes, as amended by this act, which charges the department shall allocate to electric distribution companies in proportion to their revenue.

(d) Any person, other than an electric distribution company, submitting a proposal pursuant to this section shall include with its proposal a draft of a contract that includes the transfer to the electric distribution company of all the capacity rights related to the facility under contract, and for baseload and intermediate proposals all rights related to the facility, including, but not limited to, energy, installed capacity, forward reserve capacity, locational forward reserve capacity, environmental credits and all other similar or ancillary products associated with such proposal. The draft contract shall also include compensation based on cost-of-service and security for ensuring performance of the contractual obligations. No such draft of a contract shall have a term exceeding fifteen years. Such draft contract shall include such provisions as the Department of Public Utility Control directs.

(e) An electric distribution company shall enter into contracts to implement those proposals approved pursuant to this section, and shall apply to the Department of Public Utility Control for approval of each such contract. After thirty days, either party may request the assistance of the department to resolve any outstanding issues. No such contract may become effective without approval of the department. The department shall hold a hearing that shall be conducted as a contested case, in accordance with the provisions of chapter 54 of the general statutes, to approve, reject or modify an application for approval of such contracts. Such a contract shall contain terms that mitigate the long-term risk assumed by customers. No contract approved by the department shall have a term exceeding fifteen years.

(f) Projects approved pursuant to this section are eligible for expedited siting through a petition for declaratory ruling pursuant to subsection (a) of section 16-50k of the general statutes, as amended by this act. The provisions of section 16a-7c of the general statutes shall not apply to projects approved pursuant to this section.

Sec. 59. (Effective July 1, 2007) On and after July 1, 2009, if the Department of Public Utility Control does not receive and approve proposals pursuant to the requests for proposal processes pursuant to section 58 of this act, sufficient to reach the goal set by the plan approved pursuant to section 55 of this act, the department shall conduct a contested case proceeding, in accordance with chapter 54 of the general statutes, to perform a needs assessment to determine the total amount and type of energy resource needs, if any, that remain unaddressed. If the department determines that said needs have been unaddressed, the department shall conduct a contested case proceeding to determine the costs and benefits of the state serving as the builder of last resort for the shortfall of megawatts from said request for proposal process, and may issue a request for proposal, in accordance with the provisions of subdivision (1) of subsection (a) of section 58 of this act to electric distribution companies to address the shortfall of new, expanded or repowered eligible generation, including baseload, intermediate, peaking, renewable and demand response. The department may request that the electric distribution company submitting a proposal submit further information that the department determines to be in the public interest, which the department may use in evaluating the proposal. Each electric distribution company shall be entitled to recover its prudently incurred costs of such project, including, but not limited to, capital costs, operation and maintenance expenses, depreciation, fuel costs, taxes and other governmental charges, and a reasonable rate or return on equity. The department shall review such recovery of costs consistent with the principles set forth in sections 16-19, 16-19b and 16-19e of the general statutes, as amended by this act, provided the return on equity associated with such project shall be established in the initial annual contested case proceeding under this subsection and updated at least once every four years.

Sec. 60. Section 16-32f of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):

(a) On or before October first of each even-numbered year, a gas company, as defined in section 16-1, as amended by this act, shall furnish a report to the Department of Public Utility Control containing a five-year forecast of loads and resources. The report shall describe the facilities and supply sources that, in the judgment of such gas company, will be required to meet gas demands during the forecast period. The report shall be made available to the public and shall be furnished to the chief executive officer of each municipality in the service area of such gas company, the regional planning agency which encompasses each such municipality, the Attorney General, the president pro tempore of the Senate, the speaker of the House of Representatives, the joint standing committee of the General Assembly having cognizance of matters relating to public utilities, any other member of the General Assembly making a request to the department for the report and such other state and municipal entities as the department may designate by regulation. The report shall include: (1) A tabulation of estimated peak loads and resources for each year; (2) data on gas use and peak loads for the five preceding calendar years; (3) a list of present and projected gas supply sources; (4) specific measures to control load growth and promote conservation; and (5) such other information as the department may require by regulation. A full description of the methodology used to arrive at the forecast of loads and resources shall also be furnished to the department. The department shall hold a public hearing on such reports upon the request of any person. On or before August first of each odd-numbered year, the department may request a gas company to furnish to the department an updated report. A gas company shall furnish any such updated report not later than sixty days following the request of the department.

(b) Not later than October 1, 2005, and annually thereafter, a gas company, as defined in section 16-1, as amended by this act, shall submit to the Department of Public Utility Control a gas conservation plan, in accordance with the provisions of this section, to implement cost-effective energy conservation programs and market transformation initiatives. All supply and conservation and load management options shall be evaluated and selected within an integrated supply and demand planning framework. Such plan shall be funded during each state fiscal year by the revenue from the tax imposed by section 12-264 on the gross receipts of sales of all public services companies that is in excess of the revenue estimate for said tax that is approved by the General Assembly in the appropriations act for such fiscal year, provided the amount of such excess revenue that shall be allocated to fund such plan in any state fiscal year shall not exceed ten million dollars. Such excess revenue shall be deposited in an account held by the Energy Conservation Management Board, established pursuant to section 16-245m. Services provided under the plan shall be available to all gas company customers. Each gas company shall apply to the Energy Conservation Management Board for reimbursement for expenditures pursuant to the plan. The department shall, in an uncontested proceeding during which the department may hold a public hearing, approve, modify or reject the plan.

(c) (1) The Energy Conservation Management Board [, established pursuant to section 16-245m,] shall advise and assist each such gas company in the development and implementation of the plan submitted under subsection (b) of this section. Each program contained in the plan shall be reviewed by each such gas company and shall be either accepted, modified or rejected by the Energy Conservation Management Board before submission of the plan to the department for approval. The Energy Conservation Management Board shall, as part of its review, examine opportunities to offer joint programs providing similar efficiency measures that save more than one fuel resource or to otherwise coordinate programs targeted at saving more than one fuel resource. Any costs for joint programs shall be allocated equitably among the conservation programs.

(2) Programs included in the plan shall be screened through cost-effectiveness testing that compares the value and payback period of program benefits to program costs to ensure that the programs are designed to obtain gas savings whose value is greater than the costs of the program. Program cost-effectiveness shall be reviewed annually by the department, or otherwise as is practicable. If the department determines that a program fails the cost-effectiveness test as part of the review process, the program shall either be modified to meet the test or be terminated. On or before January 1, 2007, and annually thereafter, the board shall provide a report, in accordance with the provisions of section 11-4a, to the joint standing committees of the General Assembly having cognizance of matters relating to energy and the environment, that documents expenditures and funding for such programs and evaluates the cost-effectiveness of such programs conducted in the preceding year, including any increased cost-effectiveness owing to offering programs that save more than one fuel resource.

(3) Programs included in the plan may include, but are not limited to: (A) Conservation and load management programs, including programs that benefit low-income individuals; (B) research, development and commercialization of products or processes that are more energy-efficient than those generally available; (C) development of markets for such products and processes; (D) support for energy use assessment, engineering studies and services related to new construction or major building renovations; (E) the design, manufacture, commercialization and purchase of energy-efficient appliances, air conditioning and heating devices; (F) program planning and evaluation; (G) joint fuel conservation initiatives and programs targeted at saving more than one fuel resource; and (H) public education regarding conservation. Such support may be by direct funding, manufacturers' rebates, sale price and loan subsidies, leases and promotional and educational activities. The plan shall also provide for expenditures by the Energy Conservation Management Board for the retention of expert consultants and reasonable administrative costs, provided such consultants shall not be employed by, or have any contractual relationship with, a gas company. Such costs shall not exceed five per cent of the total cost of the plan.

[(d) Nothing in this section shall be construed to require the Department of Public Utility Control to establish a conservation charge to support the programs in this section.]

Sec. 61. Section 16a-7c of the general statutes is amended by adding subsection (g) as follows (Effective July 1, 2007):

(NEW) (g) When evaluating submissions pursuant to subsection (f) of this section for a facility described in subdivision (3) of subsection (a) of section 16-50i that are in excess of sixty-five megawatts, the board shall perform a net energy analysis for each proposal. Such analysis shall include calculations of all embodied energy requirements used in the materials for initial construction of the facility over its projected useful lifetime. The analysis shall be expressed in a dimensionless unit as an energy profit ratio of energy generated by the facility to the calculated net energy expended in plant construction, maintenance and total fuel cycle energy requirements over the projected useful lifetime of the facility. The boundary for both the net energy calculations of the fuel cycle and materials for the facility construction and maintenance shall both be at the point of primary material extraction and include the energy consumed through the entire supply chain to final, but not be limited to, such subsequent steps as transportation, refinement and energy for delivery to the end consumer. The results of said net energy analysis shall be included in the results forwarded to the Connecticut Siting Council pursuant to subsection (f) of this section. For purposes of this subsection, "facility net energy" means the heat energy delivered by the facility contained in a fuel minus the life cycle energy used to produce the facility. "Fuel net energy" means the heat energy contained in a fuel minus the energy used to extract the fuel from the environment, refine it to a socially useful state and deliver it to consumers, and "embodied energy" means the total energy used to build and maintain a process, expressed in calorie equivalents of one type of energy.

Sec. 62. Subsection (b) of section 16a-7c of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):

(b) On or after December 1, 2004, not later than fifteen days after the filing of an application pursuant to subdivision (1) of subsection (a) of section 16-50i, except for an application for a facility described in subdivision (5) or (6) of subsection (a) of section 16-50i, the Connecticut Energy Advisory Board shall issue a request-for-proposal to seek alternative solutions to the need that will be addressed by the proposed facility in such application. Such request-for-proposal shall, where relevant, solicit proposals that include distributed generation or energy efficiency measures. The board shall publish such request-for-proposal in one or more newspapers or periodicals, as selected by the board. Any facility generating not more than five megawatts shall be exempt from the request for proposal process described in this subsection. Notwithstanding the provisions of this subsection, the board, by a vote of two-thirds of the members present and voting, may determine that a request-for-proposal is unnecessary for a specific application because the process is not likely to result in a reasonable alternative to the proposed facility. On or before December 1, 2007, after seeking public comment, the board shall approve additional criteria for considering whether a request-for-proposal process should not be required for a specific application. Any determination that a request-for-proposal is not required shall include the board's reasons for such determination.

Sec. 63. Subdivision (2) of subsection (a) of section 16-50l of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):

(2) On or after December 1, 2004, the filing of an application pursuant to subdivision (1) of this subsection shall initiate the request-for-proposal process, except for an application for a facility described in subdivision (4), (5) or (6) of subsection (a) of section 16-50i.

Sec. 64. (Effective from passage) Notwithstanding the provisions of title 22a of the general statutes, the Department of Environmental Protection shall review any permit applications filed on or after July 1, 2007, and not later than January 1, 2010, that are necessary for the installation of distributed resources, as defined in section 16-1 of the general statutes, as amended by this act, including cogeneration systems that utilize fossil fuels as the primary fuel source and issue a final decision not later than one hundred twenty days after the application has been submitted and has satisfied all administrative requirements.

Sec. 65. (NEW) (Effective from passage) On or before September 1, 2007, the Commissioner of Public Utility Control and the Commissioner of Environmental Protection shall establish coordinating protocols within a memorandum of understanding for air emission permit provisions related to operating emergency generation dispatch. Not later than February 1, 2008, and upon any modification to such memorandum of understanding, said commissioners shall report the details of such memorandum of understanding to the joint standing committees of the General Assembly having cognizance of matters relating to energy and the environment.

Sec. 66. Section 13a-126 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

As used in this section, "public service facility" includes all privately, publicly or cooperatively owned lines, facilities and systems for producing, transmitting or distributing communications, cable television, power, electricity, light, heat, gas, oil, crude products, water, steam, waste, storm water not connected with highway drainage and any other similar commodities, including fire and police signal systems and street lighting systems which directly or indirectly serve the public. Whenever the commissioner determines that any public service facility located within, on, along, over or under any land comprising the right-of-way of a state highway or any other public highway when necessitated by the construction or reconstruction of a state highway shall be readjusted or relocated in or removed from such right-of-way, the commissioner shall issue an appropriate order to the company, corporation or municipality owning or operating such facility, and such company, corporation or municipality shall readjust, relocate or remove the same promptly in accordance with such order; provided an equitable share of the cost of such readjustment, relocation or removal, including the cost of installing and constructing a facility of equal capacity in a new location, shall be borne by the state, except that the state shall not bear any share of the cost of a project of an electric distribution company, as defined in section 16-1, as amended by this act, to readjust, relocate or remove any facility, as defined in subsection (a) of section 16-50i, used for transmitting electricity or as an electric transmission trunkline. The Department of Transportation shall evaluate the total costs of such a project, including department costs for construction or reconstruction and electric distribution company costs for readjusting, relocating or removing such facility, so as to minimize the overall costs incurred by the state and the electric distribution company. The electric distribution company may provide the department with proposed alternatives to the relocation, readjustment or removal proposed by the department and shall be responsible for any changes to project costs attributable to adoption of the company's proposed alternative designs for such project, including changes to the area of the relocation, readjustment or removal and any incremental costs incurred by the department to evaluate such alternatives. If such electric distribution company and the department cannot agree on a plan for such project, the Commissioner of Transportation and the chairperson of the Department of Public Utility Control shall, on request of the company, jointly determine the alternative for the project. Such equitable share, in the case of or in connection with the construction or reconstruction of any limited access highway, shall be the entire cost, less the deductions provided in this section, and, in the case of or in connection with the construction or reconstruction of any other state highway, shall be such portion or all of the entire cost, less the deductions provided in this section, as may be fair and just under all the circumstances, but shall not be less than fifty per cent of such cost after the deductions provided in this section. In establishing the equitable share of the cost to be borne by the state, there shall be deducted from the cost of the readjusted, relocated or removed facilities a sum based on a consideration of the value of materials salvaged from existing installations, the cost of the original installation, the life expectancy of the original facility and the unexpired term of such life use. When any facility is removed from the right-of-way of a public highway to a private right-of-way, the state shall not pay for such private right-of-way, provided, when a municipally-owned facility is thus removed from a municipally-owned highway, the state shall pay for the private right-of-way needed by the municipality for such relocation. If the commissioner and the company, corporation or municipality owning or operating such facility cannot agree upon the share of the cost to be borne by the state, either may apply to the superior court for the judicial district within which such highway is situated, or, if said court is not in session, to any judge thereof, for a determination of the cost to be borne by the state, and said court or such judge, after causing notice of the pendency of such application to be given to the other party, shall appoint a state referee to make such determination. Such referee, having given at least ten days' notice to the parties interested of the time and place of the hearing, shall hear both parties, shall view such highway, shall take such testimony as such referee deems material and shall thereupon determine the amount of the cost to be borne by the state and immediately report to the court. If the report is accepted by the court, such determination shall, subject to right of appeal as in civil actions, be conclusive upon both parties.

Sec. 67. (NEW) (Effective July 1, 2007) Notwithstanding any limitation imposed by its charter, each domestic electric company is authorized and empowered to generate and transmit electric energy, and to acquire utility facilities necessary or convenient for the purposes of its electric utility business or undivided interest therein and to operate the same, anywhere within or without this state, provided nothing in this section shall be construed to authorize such a company to sell electric energy in this state to any person, or any area, except as otherwise authorized by its charter or the general statutes. For purposes of this section, "domestic electric company" means an electric company or electric distribution company, as defined in section 16-1 of the general statutes, as amended by this act, any membership electric cooperative organized under chapter 597 of the general statutes and any municipal electric utility or municipal electric energy cooperative, as defined respectively in section 7-233b of the general statutes that has been chartered by or organized or constitute within or under the laws of this state.

Sec. 68. Subsection (e) of section 16-2 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(e) To insure the highest standard of public utility regulation, on and after July 1, 1997, at least three of the commissioners of the authority shall have education or training and three or more years of experience in one or more of the following fields: Economics, engineering, law, accounting, finance, utility regulation, public or government administration, consumer advocacy, business management, and environmental management. On and after July 1, 1997, at least three of these fields shall be represented on the authority by individual commissioners at all times. Any time a commissioner is newly appointed, at least one of the commissioners shall have experience in utility customer advocacy.

Sec. 69. (Effective July 1, 2007) Not later than January 1, 2008, the Connecticut Energy Advisory Board shall conduct a study to develop recommendations on how to (1) coordinate and integrate the state's energy entities; (2) achieve the goals of (A) the Regional Greenhouse Gas Initiative, and (B) the state, with regard to the reduction of emissions of greenhouse gas, as provided by section 22a-200a of the general statutes; and (3) promote indigenous alternative fuel resources. The board shall submit a report containing its recommendations, including recommendations for legislation, to the joint standing committee of the General Assembly having cognizance of matters relating to energy and technology not later than January 1, 2009.

Sec. 70. (Effective from passage) (a) Not later than July 1, 2007, the Connecticut Energy Advisory Board shall conduct a study on the efficacy, innovativeness and customer focus on electric conservation programs. The board shall hold a public hearing on such matters. In the study, the board shall investigate the options of (1) selecting a state-wide provider of conservation programs through a competitive process, which shall be open to electric distribution companies, the Connecticut Municipal Electrical Energy Cooperative and other entities; (2) retaining the current delivery system for conservation programs; and (3) having a nonprofit organization provide the conservation programs.

(b) Not later than October 1, 2007, the Connecticut Energy Advisory Board shall conduct a study of the effectiveness of the Renewable Energy Investment Fund. The board shall hold a public hearing on such matters. Such study shall include, but not be limited to, (1) the selection of clean energy production projects and rates of success, (2) the actual megawatts of renewable power in operation in this state funded by Renewable Energy Investment Fund programs, (3) the efficacy of Renewable Energy Investment Fund technology commercialization plans and strategies, (4) the cost and cost trends of procuring clean energy options, and (5) overall program cost-effectiveness.

(c) The board shall submit a report containing its findings to the joint standing committee of the General Assembly having cognizance of matters relating to energy and technology not later than February 1, 2008.

Sec. 71. (Effective October 1, 2007) Not later than January 1, 2009, the Department of Public Utility Control shall study (A) the efficacy and rate impact of last resort service provided pursuant to subsection (e) of section 16-244c of the general statutes, as amended by this act, including, but not limited to, the service's effect on the ability of this service to meet the needs of commercial and industrial customers and the development of a competitive electric supply marketplace with competitive suppliers and products, and (B) the efficacy and rate impact of standard service pursuant to subsection (c) of section 16-244c of the general statutes, as amended by this act, including, but not limited to, the service's success in meeting performance with respect to the standards set forth in section 53 of this act.

Sec. 72. (Effective from passage) Not later than September 1, 2007, the Department of Public Utility Control shall conduct a contested case proceeding to determine how and whether to bid competitively for the aggregation and procurement of contracts for the customers receiving standard service pursuant to section 16-244c of the general statutes, as amended by this act. The department's decision shall be based on the standards set forth in section 55 of this act.

Sec. 73. (NEW) (Effective July 1, 2007) (a) For purposes of this section, "fuel oil" means the product designated by the American Society for Testing and Materials as "Specifications for Heating Oil D396-69", commonly known as number 2 heating oil, and grade number 4, grade number 5 and grade number 6 fuel oil, provided such heating and fuel oil are used for purposes other than the generation of power to propel motor vehicles or for the generation of electricity.

(b) On or before November 1, 2007, the Fuel Oil Conservation Board shall, after issuing a request for proposals, select an entity qualified to administer and implement conservation and energy efficiency programs for fuel oil customers, as described in this section, to act as the program administrator for such programs and shall enter into a contract not to exceed three years in duration for such purpose. At the expiration of the contract, the board may renew the contract if it finds that the administrator's performance has been satisfactory, or the board may issue a new request for proposals.

(c) On or before March 1, 2008, and annually thereafter, the program administrator shall submit to the Energy Conservation Management Board a fuel oil conservation plan in accordance with the provisions of this section for the balance of 2008. On or before October 1, 2008, and annually thereafter, the program administrator shall submit to the Fuel Oil Conservation Board a fuel oil conservation plan for the next calendar year in accordance with the provisions of this section. The board shall hold a public hearing on each such plan.

(d) (1) The Fuel Oil Conservation Board shall advise and assist the program administrator in the development and implementation of a comprehensive plan, which shall be approved by the board, that implements cost-effective fuel oil energy conservation programs and market transformation initiatives for residential, commercial and industrial fuel oil customers. The board shall, as part of its review, examine opportunities to offer joint programs providing similar efficiency measures that save more than one fuel resource or to otherwise coordinate programs targeted at saving more than one fuel resource.

(2) Program cost-effectiveness shall be reviewed annually by the Fuel Oil Conservation Board, or otherwise as practicable. Programs included in the plan shall be evaluated as to cost-effectiveness by comparing the value and payback period of the program benefits to the program costs to ensure that the programs are designed to obtain fuel oil savings, the value of which are greater than the costs of the program. If the board determines that a program fails such cost-effectiveness test, the board shall modify the program to meet the test or terminate the program. On or before February 1, 2009, and annually thereafter, the Fuel Oil Conservation Board shall provide a report to the joint standing committees of the General Assembly having cognizance of matters relating to energy and the environment, in accordance with the provisions of section 11-4a of the general statutes, that documents expenditures and fund balances and evaluates the cost-effectiveness of such programs conducted in the preceding year, including any increased cost-effectiveness due to offering programs that save more than one fuel resource.

(3) Programs included in the plan may include, but not be limited to: (A) Conservation programs, including programs that benefit low-income persons; (B) research, development and commercialization of products or processes that are more energy-efficient than those generally available; (C) development of markets for such products and processes; (D) support for energy use assessment, engineering studies and services related to new construction or major building renovations; (E) the design, manufacture, commercialization and purchase of energy-efficient appliances and heating devices; (F) program planning and evaluation; (G) joint fuel conservation initiatives and programs targeted at saving more than one fuel resource; and (H) public education regarding conservation. Such support may be by direct funding, manufacturers' rebates, sale price and loan subsidies, leases and promotional and educational activities. The plan shall also provide for expenditures by the Fuel Oil Conservation Board for the retention of expert consultants and reasonable administrative costs, provided such consultants shall not be employed by, or have any contractual relationship with, a fuel oil company or the program administrator. Such costs shall not exceed five per cent of the total cost of the plan.

(e) (1) There is established a Fuel Oil Conservation Board consisting of fifteen members, including:

(A) One member representing dealers with retail oil heat sales in excess of fifteen million gallons in the state, appointed by the president pro tempore of the Senate;

(B) One member representing dealers with retail oil heat sales of less than fifteen million gallons in the state, appointed by the speaker of the House of Representatives;

(C) One member representing the heating, ventilation and air-conditioning trades licensed under chapter 393 of the general statutes, appointed by the majority leader of the Senate;

(D) One member representing wholesale heating distributors operating within the state, appointed by the majority leader of the House of Representatives;

(E) One member representing a state-wide environmental advocacy group, appointed by the minority leader of the Senate;

(F) The chairperson of the Heating, Piping, Cooling and Sheet Metal Work Board established under chapter 393 of the general statutes;

(G) One member from a state-wide retail oil dealer trade association, appointed by the minority leader of the House of Representatives;

(H) Six members of the public appointed by the Governor, of which one shall be a representative of an environmental organization knowledgeable in energy efficiency programs, one shall be a representative of in-state generators, one shall be a representative of a consumer advocacy organization, one shall be a representative of the business community, one shall be a representative of low-income ratepayers and one shall be a representative of state residents, in general, and all of whom shall have expertise in energy issues, and

(I) All appointed members of the board shall serve in accordance with section 4-1a of the general statutes.

(2) The Fuel Oil Conservation Board shall establish itself as a tax exempt organization in accordance with the provisions of Section 501(c)(3) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended. Not later than July 1, 2008, and biennially thereafter, a third party selected by the Attorney General shall audit the activities of the board. The results of such audit shall be submitted in a report to the joint standing committees of the General Assembly having cognizance of matters relating to energy and the environment, in accordance with the provisions of section 11-4a of the general statutes.

(3) The Fuel Oil Conservation Board shall establish a fuel oil conservation account. The account shall be a separate, nonlapsing accounting within the General Fund and shall be funded by annual revenue from the tax imposed by section 12-587 of the general statutes on the sale of petroleum products gross earnings that is in excess of said revenue collected during 2006, provided the amount of such revenue that shall be allocated to said account in any year shall not exceed ten million dollars. Said funds shall be deposited into the fuel oil conservation account.

(4) The Fuel Oil Conservation Board shall authorize specific amounts from the fuel oil conservation account established pursuant to subdivision (3) of this subsection to the program administrator selected to implement an approved plan under this section. Such amounts shall be in the form of grants, which the board shall award twice a year. Any moneys left in the account at the end of each fiscal year shall be transferred outright to the General Fund.

Sec. 74. Subsection (j) of section 16-19b of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):

(j) Any purchased gas adjustment clause or energy adjustment clause approved by the department may include a provision designed to allow the electric or gas company to charge or reimburse the customer for any under-recovery or over-recovery of overhead and fixed costs due solely to the deviation of actual retail sales of electricity or gas from projected retail sales of electricity or gas. The provision may be based on changes to either total retail sales or per customer retail sales. That specifically and directly result from new or ongoing energy efficiency, conservation, demand response or load management initiatives implemented by the company. The department shall include such provision in any energy adjustment clause approved for an electric company if it determines (1) that a significant cause of excess earnings by the electric company is an increase in actual retail sales of electricity over projected retail sales of electricity as determined at the time of the electric company's most recent rate amendment, and (2) that such provision is likely to benefit the customers of the electric company. The department may include such provision in any purchased gas adjustment clause or energy adjustment clause approved for a gas company or an electric company on or after the issuance of a final decision in a proceeding on amendments to rate schedules for such company.

Sec. 75. Subsection (a) of section 16-50k of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) Except as provided in subsection (b) of section 16-50z, no person shall exercise any right of eminent domain in contemplation of, commence the preparation of the site for, [or] commence the construction or supplying of a facility, or commence any modification of a facility, that may, as determined by the council, have a substantial adverse environmental effect in the state without having first obtained a certificate of environmental compatibility and public need, hereinafter referred to as a "certificate", issued with respect to such facility or modification by the council. [, except] Certificates shall not be required for (1) fuel cells built within the state with a generating capacity of two hundred fifty kilowatts or less, or (2) fuel cells built elsewhere with a generating capacity of ten kilowatts or less. [which shall not require such certificate.] Any facility with respect to which a certificate is required shall thereafter be built, maintained and operated in conformity with such certificate and any terms, limitations or conditions contained therein. Notwithstanding the provisions of this chapter or title 16a, the council shall, in the exercise of its jurisdiction over the siting of generating facilities, approve by declaratory ruling [(1)] (A) the construction of a facility solely for the purpose of generating electricity, other than an electric generating facility that uses nuclear materials or coal as fuel, at a site where an electric generating facility operated prior to July 1, 2004, [(2)] (B) the construction or location of any fuel cell, unless the council finds a substantial adverse environmental effect, or of any customer-side distributed resources project or facility or grid-side distributed resources project or facility with a capacity of not more than sixty-five megawatts, as long as such project meets air and water quality standards of the Department of Environmental Protection, and [(3)] (C) the siting of temporary generation solicited by the Department of Public Utility Control pursuant to section 16-19ss, as amended by this act.

Sec. 76. Subdivision (6) of subsection (a) of section 16-244e of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):

(6) Once unbundling is completed to the satisfaction of the department and consistent with the provisions of section 16-244, (A) any corporate affiliate or separate division that provides electric generation services as a result of unbundling pursuant to this subsection shall be considered a generation entity or affiliate of the electric company, and the division or corporate affiliate of the electric company that provides transmission and distribution services shall be considered an electric distribution company, and (B) an electric distribution company shall not own or operate generation assets, except as provided in this section, [and] section 16-243m, as amended by this act, and sections 54 and 59 of this act.

Sec. 77. Subsection (d) of section 16-19ss of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):

(d) Nothing in this section shall be construed to allow an electric distribution company to own, operate, lease or control any facility or asset that generates electricity, or retain any interest in such facility or asset as part of any transaction concluded pursuant to this section, except as provided in subsection (e) of section 16-244e [and] section 16-243m, as amended by this act, and sections 54, 58 and 59 of this act.

Sec. 78. Section 1 of public act 05-2 of the October 25 special session is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):

Notwithstanding the provisions of sections 4-28b and 16a-41a of the general statutes, the Commissioner of Social Services shall [amend the adopted] adopt a low income home energy assistance program block grant allocation plan for the [purpose of modifying the 2005/2006] 2007/2008 Connecticut energy assistance program state plan in the following manner: (1) To increase the basic benefit provided to all eligible households, including eligible households whose heat is included in their rent, over the benefit provided for the 2005/2006 plan, prior to the amendment of said plan, by two hundred dollars, (2) to fund, for the fiscal year ending June 30, 2008, the contingency heating assistance program under the Connecticut energy assistance program to provide a three hundred dollar basic benefit to eligible households, as defined in the Connecticut energy assistance program state plan, whose gross annual income is not more than sixty per cent of the median state income by household size, and an additional two hundred dollar crisis assistance benefit for such households who have exhausted their basic benefit and are unable to secure primary heat, causing a life threatening situation, (3) to increase the number of households weatherized pursuant to the Connecticut energy assistance program, and (4) to increase the number of households receiving home heating equipment tune-ups and home energy efficiency measures pursuant to the home energy assistance and reimbursements for tune-ups on heating equipment grant program as administered pursuant to subsection (c) of section 2 of [this act] public act 05-2 of the October 25 special session, as amended by section 1 of public act 05-4 of the October 25 special session.

Sec. 79. Section 16a-41a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):

(a) The Commissioner of Social Services shall submit to the joint standing committees of the General Assembly having cognizance of energy planning and activities, appropriations, and human services the following on the implementation of the block grant program authorized under the Low-Income Home Energy Assistance Act of 1981, as amended:

(1) Not later than August first, annually, a Connecticut energy assistance program annual plan which establishes guidelines for the use of funds authorized under the Low-Income Home Energy Assistance Act of 1981, as amended, and includes the following:

(A) Criteria for determining which households are to receive emergency and weatherization assistance;

(B) A description of systems used to ensure referrals to other energy assistance programs and the taking of simultaneous applications, as required under section 16a-41;

(C) A description of outreach efforts;

(D) Estimates of the total number of households eligible for assistance under the program and the number of households in which one or more elderly or physically disabled individuals eligible for assistance reside; and

(E) Design of a basic grant for eligible households that does not discriminate against such households based on the type of energy used for heating;

(2) Not later than January thirtieth, annually, a report covering the preceding months of the program year, including:

(A) In each community action agency geographic area and Department of Social Services region, the number of fuel assistance applications filed, approved and denied, the number of emergency assistance requests made, approved and denied and the number of households provided weatherization assistance;

(B) In each such area and district, the total amount of fuel, emergency and weatherization assistance, itemized by such type of assistance, and total expenditures to date; and

(C) For each state-wide office of each state agency administering the program, each community action agency and each Department of Social Services region, administrative expenses under the program, by line item, and an estimate of outreach expenditures; and

(3) Not later than November first, annually, a report covering the preceding twelve calendar months, including:

(A) In each community action agency geographic area and Department of Social Services region, (i) seasonal totals for the categories of data submitted under subdivision (1) of this subsection, (ii) the number of households receiving fuel assistance in which elderly or physically disabled individuals reside, and (iii) the average combined benefit level of fuel, emergency and renter assistance;

(B) Types of weatherization assistance provided;

(C) Percentage of weatherization assistance provided to tenants;

(D) The number of homeowners and tenants whose heat or total energy costs are not included in their rent receiving fuel and emergency assistance under the program by benefit level;

(E) The number of homeowners and tenants whose heat is included in their rent and who are receiving assistance, by benefit level; and

(F) The number of households receiving assistance, by energy type and total expenditures for each energy type.

(b) The Commissioner of Social Services shall implement a program to purchase [number two home heating oil at a reduced rate for low-income households participating in the Connecticut energy assistance program and the state-appropriated fuel assistance program. Each agency administering a fuel assistance program shall submit reports, as requested by the commissioner, concerning pricing information from vendors of number two home heating oil participating in the program. Such information shall include, but not be limited to, a vendor's regular retail price per gallon of number two home heating oil, the reduced price per gallon paid by the state for the heating oil, the number of gallons delivered to the state under the program and the total savings under the program due to the purchase of number two home heating oil at a reduced rate] deliverable fuel for low-income households participating in the Connecticut energy assistance program and the state-appropriated fuel assistance program. The commissioner shall ensure that all fuel assistance recipients are treated the same as any other similarly situated customer and that no fuel vendor discriminates against fuel assistance program recipients who are under the vendor's standard payment, delivery, service or other similar plans. The commissioner shall take advantage of programs offered by fuel vendors that reduce the cost of the fuel purchased, including, but not limited to, fixed price, capped price, prepurchase or summer-fill programs that reduce program cost and that make the maximum use of program revenues. The commissioner shall ensure that all agencies administering the fuel assistance program shall make payments to program fuel vendors in advance of the delivery of energy where vendor provided price-management strategies require payments in advance.

(c) Each community action agency administering a fuel assistance program shall submit reports, as requested by the Commissioner of Social Services, concerning pricing information from vendors of deliverable fuel participating in the program. Such information shall include, but not be limited to, the state-wide or regional retail price per unit of deliverable fuel, the reduced price per unit paid by the state for the deliverable fuel in utilizing price management strategies offered by program vendors for all consumers, the number of units delivered to the state under the program and the total savings under the program due to the purchase of deliverable fuel utilizing price-management strategies offered by program vendors for all consumers.

(d) Each community action agency administering a fuel assistance program shall begin accepting applications for the program not later than September first of each year.

Sec. 80. Section 16-262c of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) Notwithstanding any other provision of the general statutes no electric, electric distribution, gas, telephone or water company, no electric supplier or certified telecommunications provider, and no municipal utility furnishing electric, gas, telephone or water service shall cause cessation of any such service by reason of delinquency in payment for such service (1) on any Friday, Saturday, Sunday, legal holiday or day before any legal holiday, provided such a company, electric supplier, certified telecommunications provider or municipal utility may cause cessation of such service to a nonresidential account on a Friday which is not a legal holiday or the day before a legal holiday when the business offices of the company, electric supplier, certified telecommunications provider or municipal utility are open to the public the succeeding Saturday, (2) at any time during which the business offices of said company, electric supplier, certified telecommunications provider or municipal utility are not open to the public, or (3) within one hour before the closing of the business offices of said company, electric supplier or municipal utility.

(b) (1) From November first to [April fifteenth] May first, inclusive, no electric or electric distribution company, as defined in section 16-1, as amended by this act, no electric supplier and no municipal utility furnishing electricity shall terminate or refuse to reinstate residential electric service in hardship cases where the customer lacks the financial resources to pay his or her entire account. From November first to [April fifteenth] May first, inclusive, no gas company and no municipal utility furnishing gas shall terminate or refuse to reinstate residential gas service in hardship cases where the customer uses such gas for heat and lacks the financial resources to pay his or her entire account, except a gas company that, between [April sixteenth] May second and October thirty-first, terminated gas service to a residential customer who uses gas for heat and who, during the previous period of November first to [April fifteenth] May first, had gas service maintained because of hardship status, may refuse to reinstate the gas service from November first to [April fifteenth] May first, inclusive, only if the customer has failed to pay, since the preceding November first, the lesser of: (A) Twenty per cent of the outstanding principal balance owed the gas company as of the date of termination, (B) one hundred dollars, or (C) the minimum payments due under the customer's amortization agreement. Notwithstanding any other provision of the general statutes to the contrary, no electric, electric distribution or gas company, no electric supplier and no municipal utility furnishing electricity or gas shall terminate or refuse to reinstate residential electric or gas service where the customer lacks the financial resources to pay his or her entire account and for which customer or a member of the customer's household the termination or failure to reinstate such service would create a life-threatening situation.

(2) During any period in which a residential customer is subject to termination, an electric, electric distribution or gas company, an electric supplier or a municipal utility furnishing electricity or gas shall provide such residential customer whose account is delinquent an opportunity to enter into a reasonable amortization agreement with such company, electric supplier or utility to pay such delinquent account and to avoid termination of service. Such amortization agreement shall allow such customer adequate opportunity to apply for and receive the benefits of any available energy assistance program. An amortization agreement shall be subject to amendment on customer request if there is a change in the customer's financial circumstances.

(3) As used in this section, (A) "household income" means the combined income over a twelve-month period of the customer and all adults, except children of the customer, who are and have been members of the household for six months or more, and (B) "hardship case" includes, but is not limited to: (i) A customer receiving local, state or federal public assistance; (ii) a customer whose sole source of financial support is Social Security, Veterans' Administration or unemployment compensation benefits; (iii) a customer who is head of the household and is unemployed, and the household income is less than three hundred per cent of the poverty level determined by the federal government; (iv) a customer who is seriously ill or who has a household member who is seriously ill; (v) a customer whose income falls below one hundred twenty-five per cent of the poverty level determined by the federal government; and (vi) a customer whose circumstances threaten a deprivation of food and the necessities of life for himself or dependent children if payment of a delinquent bill is required.

(4) In order for a residential customer of a gas or electric distribution company using gas or electricity for heat to be eligible to have any moneys due and owing deducted from the customer's delinquent account pursuant to this subdivision, the company furnishing gas or electricity shall require that the customer (A) apply and be eligible for benefits available under the Connecticut energy assistance program or state appropriated fuel assistance program; (B) authorize the company to send a copy of the customer's monthly bill directly to any energy assistance agency for payment; (C) enter into and comply with an amortization agreement, which agreement is consistent with decisions and policies of the Department of Public Utility Control. Such an amortization agreement shall reduce a customer's payment by the amount of the benefits reasonably anticipated from the Connecticut energy assistance program, state appropriated fuel assistance program or other energy assistance sources. Unless the customer requests otherwise, the company shall budget a customer's payments over a twelve-month period with an affordable increment to be applied to any arrearage, provided such payment plan will not result in loss of any energy assistance benefits to the customer. If a customer authorizes the company to send a copy of his monthly bill directly to any energy assistance agency for payment, the energy assistance agency shall make payments directly to the company. If, on April thirtieth, a customer has been in compliance with the requirements of subparagraphs (A) to (C), inclusive, of this subdivision, during the period starting on the preceding November first, or from such time as the customer's account becomes delinquent, the company shall deduct from such customer's delinquent account an additional amount equal to the amount of money paid by the customer between the preceding November first and April thirtieth and paid on behalf of the customer through the Connecticut energy assistance program and state appropriated fuel assistance program. Any customer in compliance with the requirements of subparagraphs (A) to (C), inclusive, of this subdivision, on April thirtieth who continues to comply with an amortization agreement through the succeeding October thirty-first, shall also have an amount equal to the amount paid pursuant to such agreement and any amount paid on behalf of such customer between May first and the succeeding October thirty-first deducted from the customer's delinquent account. In no event shall the deduction of any amounts pursuant to this subdivision result in a credit balance to the customer's account. No customer shall be denied the benefits of this subdivision due to an error by the company. The Department of Public Utility Control shall allow the amounts deducted from the customer's account pursuant to the implementation plan, described in subdivision (5) of this subsection, to be recovered by the company in its rates as an operating expense, pursuant to said implementation plan. If the customer fails to comply with the terms of the amortization agreement or any decision of the department rendered in lieu of such agreement and the requirements of subparagraphs (A) to (C), inclusive, of this subdivision, the company may terminate service to the customer, pursuant to all applicable regulations, provided such termination shall not occur between November first and April fifteenth.

(5) Each gas and electric distribution company shall submit to the Department of Public Utility Control annually, on or before July first, an implementation plan which shall include information concerning amortization agreements, counseling, reinstatement of eligibility, rate impacts and any other information deemed relevant by the department. The Department of Public Utility Control may, in consultation with the Office of Policy and Management, approve or modify such plan within ninety days of receipt of the plan. If the department does not take any action on such plan within ninety days of its receipt, the plan shall automatically take effect at the end of the ninety-day period, provided the department may extend such period for an additional thirty days by notifying the company before the end of the ninety-day period. Any amount recovered by a company in its rates pursuant to this subsection shall not include any amount approved by the Department of Public Utility Control as an uncollectible expense. The department may deny all or part of the recovery required by this subsection if it determines that the company seeking recovery has been imprudent, inefficient or acting in violation of statutes or regulations regarding amortization agreements.

(6) On or after January 1, 1993, the Department of Public Utility Control may require gas companies to expand the provisions of subdivisions (4) and (5) of this subsection to all hardship customers. Any such requirement shall not be effective until November 1, 1993.

(7) (A) All electric, electric distribution and gas companies, electric suppliers and municipal utilities furnishing electricity or gas shall collaborate in developing, subject to approval by the Department of Public Utility Control, standard provisions for the notice of delinquency and impending termination under subsection (a) of section 16-262d. Each such company and utility shall place on the front of such notice a provision that the company, electric supplier or utility shall not effect termination of service to a residential dwelling for nonpayment of disputed bills during the pendency of any complaint. In addition, the notice shall state that the customer must pay current and undisputed bill amounts during the pendency of the complaint. (B) At the beginning of any discussion with a customer concerning a reasonable amortization agreement, any such company or utility shall inform the customer (i) of the availability of a process for resolving disputes over what constitutes a reasonable amortization agreement, (ii) that the company, electric supplier or utility will refer such a dispute to one of its review officers as the first step in attempting to resolve the dispute, and (iii) that the company, electric supplier or utility shall not effect termination of service to a residential dwelling for nonpayment of a delinquent account during the pendency of any complaint, investigation, hearing or appeal initiated by the customer, unless the customer fails to pay undisputed bills, or undisputed portions of bills, for service received during such period. (C) Each such company, electric supplier and utility shall inform and counsel all customers who are hardship cases as to the availability of all public and private energy conservation programs, including programs sponsored or subsidized by such companies and utilities, eligibility criteria, where to apply, and the circumstances under which such programs are available without cost.

(8) The Department of Public Utility Control shall adopt regulations in accordance with chapter 54 to carry out the provisions of this subsection. Such regulations shall include, but not be limited to, criteria for determining hardship cases and for reasonable amortization agreements, including appeal of such agreements, for categories of customers. Such regulations may include the establishment of a reasonable rate of interest which a company may charge on the unpaid balance of a customer's delinquent bill and a description of the relationship and responsibilities of electric suppliers to customers.

(c) Each electric, electric distribution and gas company, electric supplier and municipal utility shall, not later than December first, annually, submit a report to the department and the General Assembly indicating (1) the number of customers in each of the following categories and the total delinquent balances for such customers as of the preceding April fifteenth: (A) Customers who are hardship cases and (i) who made arrangements for reasonable amortization agreements, (ii) who did not make such arrangements, and (B) customers who are nonhardship cases and who made arrangements for reasonable amortization, (2) (A) the number of heating customers receiving energy assistance during the preceding heating season and the total amount of such assistance, and (B) the total balance of the accounts of such customers after all energy assistance is applied to the accounts, (3) the number of hardship cases reinstated between November first of the preceding year and [April fifteenth] May first of the same year, the number of hardship cases terminated between [April fifteenth] May first of the same year and November first and the number of hardship cases reinstated during each month from [April] May to November, inclusive, of the same year, (4) the number of reasonable amortization agreements executed and the number breached during the same year by (A) hardship cases, and (B) nonhardship cases, and (5) the number of accounts of (A) hardship cases, and (B) nonhardship cases for which part or all of the outstanding balance is written off as uncollectible during the preceding year and the total amount of such uncollectibles.

(d) Nothing in this section shall (1) prohibit a public service company, electric supplier or municipal utility from terminating residential utility service upon request of the customer or in accordance with section 16-262d upon default by the customer on an amortization agreement or collecting delinquent accounts through legal processes, including the processes authorized by section 16-262f, or (2) relieve such company, electric supplier or municipal utility of its responsibilities set forth in sections 16-262d and 16-262e to occupants of residential dwellings or, with respect to a public service company or electric supplier, the responsibilities set forth in section 19a-109.

(e) No provision of the Freedom of Information Act, as defined in section 1-200, shall be construed to require or permit a municipal utility furnishing electric, gas or water service, a municipality furnishing water or sewer service, a district established by special act or pursuant to chapter 105 and furnishing water or sewer service or a regional authority established by special act to furnish water or sewer service to disclose records under the Freedom of Information Act, as defined in section 1-200, which identify or could lead to identification of the utility usage or billing information of individual customers, to the extent such disclosure would constitute an invasion of privacy.

(f) If an electric supplier suffers a loss of revenue by operation of this section, the supplier may make a claim for such revenue to the department. The electric distribution company shall reimburse the electric supplier for such losses found to be reasonable by the department at the lower of (1) the price of the contract between the supplier and the customer, or (2) the electric distribution company's price to customers for default service, as determined by the department. The electric distribution company may recover such reimbursement, along with transaction costs, through the systems benefits charge.

Sec. 81. Section 12-412 of the general statutes is amended by adding subdivisions (117) and (118) as follows (Effective July 1, 2007, and applicable to sales occurring on or after July 1, 2007):

(NEW) (117) Sales of solar energy electricity generating systems and passive or active solar water or space heating systems and geo-thermal resource systems, including equipment related to such systems, and sales of services relating to the installation of such systems.

(NEW) (118) Sales of ice storage systems used for cooling, including equipment related to such systems, and sales of services relating to the installation of such systems by a utility ratepayer who is billed by such utility on a time-of-service metering basis.

Sec. 82. Section 12-412k of the general statutes is repealed and the following is substituted in lieu thereof (Effective June 1, 2007):

(a) For purposes of this section, "residential weatherization products" means programmable thermostats, window film, caulking, window and door weather strips, insulation, water heater blankets, water heaters, natural gas and propane furnaces and boilers that meet the federal Energy Star standard, windows and doors that meet the federal Energy Star standard, oil furnaces and boilers that are not less than [eighty-five] eighty-four per cent efficient and [ground-based] ground-source heat pumps that meet the minimum federal energy efficiency rating.

(b) Notwithstanding the provisions of the general statutes, [from November 25, 2005, to April 1, 2006, and from June 1, 2006, to June 30, 2007,] the provisions of this chapter shall not apply to sales of any residential weatherization products or compact fluorescent light bulbs.

Sec. 83. (NEW) (Effective from passage) Notwithstanding the provisions of the general statutes, from the effective date of this section to June 30, 2008, the provisions of chapter 219 of the general statutes shall not apply to sales of any household appliance that meets the federal Energy Star standard.

Sec. 84. Section 16-245a of the general statutes is amended by adding subsection (g) as follows (Effective from passage):

(NEW) (g) (1) Notwithstanding the provisions of this section and section 16-244c, as amended by this act, for periods beginning on and after January 1, 2008, each electric distribution company may procure renewable energy certificates from Class I, Class II and Class III renewable energy sources that represent generation in amounts equal to or greater than fifty per cent of the procurement from Class I, Class II and Class III renewable energy sources. The electric distribution companies may enter into long-term contracts for not more than fifteen years to procure such renewable energy certificates associated with output and services delivered over the term of the contract. The generation associated with the renewable energy certificates purchased pursuant to this section shall be credited against the required amounts of output and standard service or supplier of last resort service, pursuant to subsection (a) of this section, for the periods which the output and services to which such renewable energy certificates apply is produced.

(2) The department shall conduct a contested case proceeding to establish the procedures for the procurement of renewable energy certificates pursuant to this subsection and the recovery of the costs of such program from customers of the electric distribution companies. The department's procedures shall include: (A) The method and timing of crediting of the procurement of renewable energy certificates against the renewable portfolio standard purchase obligations of electric suppliers and the electric distribution companies pursuant to subsection (a) of this section; (B) the terms and conditions, including reasonable performance assurance commitments, to be imposed on entities seeking to supply renewable energy certificates; and (C) compensation, not to exceed one mill per kilowatt hour of output and services associated with the renewable energy certificates purchased pursuant to this subsection, which shall be payable to the electric distribution companies for administering the procurement provided for under this subsection. Revenues from such compensation shall not be included in calculating the electric distribution companies' earnings to determine if rates are just and reasonable, for earnings sharing mechanisms or for purposes of sections 16-19, 16-19a and 16-19e, as amended by this act.

Sec. 85. Section 12-635 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):

The Commissioner of Revenue Services shall grant a credit against any tax due under the provisions of chapter 207, 208, 209, 210, 211 or 212 (1) in an amount not to exceed [sixty] one hundred per cent of the total cash amount invested during the taxable year by the business firm in programs operated or created pursuant to proposals approved pursuant to section 12-632 for energy conservation projects directed toward properties occupied by persons, at least seventy-five per cent of whom are at an income level not exceeding one hundred fifty per cent of the poverty level for the year next preceding the year during which such tax credit is to be granted; [, or] (2) in an amount equal to one hundred per cent of the total cash amount invested during the taxable year by the business firm in programs operated or created pursuant to proposals approved pursuant to section 12-632 for energy conservation projects at properties owned or occupied by charitable corporations, foundations, trusts or other entities as determined under regulations adopted pursuant to this chapter; or (3) in an amount not to exceed sixty per cent of the total cash amount invested during the taxable year by the business firm in employment and training programs directed at youths, at least seventy-five per cent of whom are at an income level not exceeding one hundred fifty per cent of the poverty level for the year next preceding the year during which such tax credit is to be granted; in employment and training programs directed at handicapped persons as determined under regulations adopted pursuant to this chapter; in employment and training programs for unemployed workers who are fifty years of age or older; in education and employment training programs for recipients in the temporary family assistance program; or in child care services. Any other program which serves persons at least seventy-five per cent of whom are at an income level not exceeding one hundred fifty per cent of the poverty level for the year next preceding the year during which such tax credit is to be granted and which meets the standards for eligibility under this chapter shall be eligible for tax credit under this section.

Sec. 86. (NEW) (Effective July 1, 2007) (a) For the purposes described in subsection (b) of this section, the State Bond Commission shall have the power, from time to time, to authorize the issuance of bonds of the state in one or more series and in principal amounts not exceeding in the aggregate thirty million dollars.

(b) The proceeds of the sale of said bonds, to the extent of the amount stated in subsection (a) of this section, shall be used by the Department of Public Works for the purpose of funding the net project costs, or the balance of any projects after applying any public or private financial incentives available, for any energy services project that results in increased efficiency measures in state buildings.

(c) All provisions of section 3-20 of the general statutes, or the exercise of any right or power granted thereby, which are not inconsistent with the provisions of this section are hereby adopted and shall apply to all bonds authorized by the State Bond Commission pursuant to this section, and temporary notes in anticipation of the money to be derived from the sale of any such bonds so authorized may be issued in accordance with said section 3-20 and from time to time renewed. Such bonds shall mature at such time or times not exceeding twenty years from their respective dates as may be provided in or pursuant to the resolution or resolutions of the State Bond Commission authorizing such bonds. None of said bonds shall be authorized except upon a finding by the State Bond Commission that there has been filed with it a request for such authorization which is signed by or on behalf of the Secretary of the Office of Policy and Management and states such terms and conditions as said commission, in its discretion, may require. Said bonds issued pursuant to this section shall be general obligations of the state and the full faith and credit of the state of Connecticut are pledged for the payment of the principal of and interest on said bonds as the same become due, and accordingly and as part of the contract of the state with the holders of said bonds, appropriation of all amounts necessary for punctual payment of such principal and interest is hereby made, and the State Treasurer shall pay such principal and interest as the same become due.

Sec. 87. Section 10a-180 of the general statutes is amended by adding subsection (w) as follows (Effective October 1, 2007):

(NEW) (w) To make grants or provide other forms of financial assistance to any institution of higher education, to any health care institution, to any nursing home, to any child care or child development facility and to any qualified nonprofit organization in such amounts, for energy efficient construction or renovation projects or renewable energy construction or renovation projects subject to such eligibility and other requirements the board establishes pursuant to written procedures adopted by the board of directors pursuant to subsection (h) of section 10a-179.

Sec. 88. Section 5 of public act 05-2 of the October 25 special session is repealed and the following is substituted in lieu thereof (Effective from passage):

Notwithstanding the provisions of section 16a-40b of the general statutes, as amended by section 5 of public act 05-191, for the fiscal year ending June 30, [2006] 2008, the range of rates of interest payable on all loans pursuant to subsection (b) of said section 16a-40b for purchases set forth in subsection (a) of said section 16a-40b, except for goods or services relating to [aluminum or vinyl siding,] replacement central air conditioning, [replacement roofs,] heat pumps or solar systems and passive solar additions, shall be not less than zero per cent for any applicant in the lowest income class and not more than three per cent for any applicant for whom the adjusted gross income of the household member or members who contribute to the support of the household was at least one hundred fifteen per cent of the median area income by household size.

Sec. 89. Section 16a-2 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

As used in this chapter and sections 16a-45a, 16a-46, 16a-46a and 16a-46b:

(a) "Office" means the Office of Policy and Management;

(b) "Board" means the Connecticut Energy Advisory Board;

(c) "Secretary" means the Secretary of the Office of Policy and Management;

(d) "Energy" means work or heat that is, or may be, produced from any fuel or source whatsoever;

(e) "Energy emergency" means a situation where the health, safety or welfare of the citizens of the state is threatened by an actual or impending acute shortage in usable energy resources;

(f) "Energy resource" means natural gas, petroleum products, coal and coal products, wood fuels, geothermal sources, radioactive materials and any other resource yielding energy;

(g) "Person" means any individual, firm, partnership, association, syndicate, company, trust, corporation, limited liability company, municipality, agency or political or administrative subdivision of the state, or other legal entity of any kind;

(h) "Service area" means any geographic area serviced by the same energy-producing public service company, as defined in section 16-1;

(i) "Renewable resource" means solar, wind, water, wood or other biomass source of energy and geothermal energy;

(j) "Energy-related products" means (1) energy systems and equipment that utilize renewable resources to provide space heating or cooling, water heating, electricity or other useful energy, (2) insulation materials, and (3) equipment designed to conserve energy or increase the efficiency of its use, including that used for residential, commercial, industrial and transportation purposes;

(k) "Energy-related services" means (1) the design, construction, installation, inspection, maintenance, adjustment or repair of energy-related products, (2) inspection, adjustment, maintenance or repair of any conventional energy system, (3) the performance of energy audits or the provision of energy management consulting services, and (4) weatherization activities carried out under any federal, state or municipal program;

(l) "Conventional energy system" means any system for supplying space heating or cooling, ventilation or domestic or commercial hot water which is not included in subdivision (1) of subsection (j) of this section; [and]

(m) "Energy supply" means any energy resource capable of being used to perform useful work and any form of energy such as electricity produced or derived from energy resources which may be so used; and

(n) "Energy facility" means a structure that generates, transmits or stores electricity, natural gas, refined petroleum products, renewable fuels, coal and coal products, wood fuels, geothermal sources, radioactive material and other resources yielding energy.

Sec. 90. Section 16a-7b of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) Not later than December 1, 2004, the Connecticut Energy Advisory Board shall develop infrastructure criteria guidelines for the evaluation process under subsection (f) of section 16a-7c, which guidelines shall be consistent with state environmental policy, state economic development policy, the state's policy regarding the restructuring of the electric industry, as set forth in section 16-244, and the findings in the comprehensive energy plan prepared pursuant to section 16a-7a, and shall include, but not be limited to, the following: (1) Environmental preference standards; (2) efficiency standards, including, but not limited to, efficiency standards for transmission, generation and demand-side management; (3) generation preference standards; (4) electric capacity, use trends and forecasted resource needs; (5) natural gas capacity, use trends and forecasted resource needs; and (6) national and regional reliability criteria applicable to the regional bulk power grid, as determined in consultation with the regional independent system operator, as defined in section 16-1. In developing environmental preference standards, the board shall consider the recommendations and findings of the task force established pursuant to section 25-157a and Executive Order Number 26 of Governor John G. Rowland.

(b) No municipality other than a municipality operating a plant pursuant to chapter 101 or any special act and acting for purposes thereto may take an action to condemn, in whole or in part, or restrict the operation of any existing and currently operating energy facility, if such facility is first determined by the Department of Public Utility Control, following a contested case proceeding, held in accordance with the provisions of chapter 54, to comprise a critical, unique and unmovable component of the state's energy infrastructure, unless the municipality first receives written approval from the department, the Office of Policy and Management, the Connecticut Energy Advisory Board and the Connecticut Siting Council that such taking would not have a detrimental impact on the state's or region's ability to provide a particular energy resource to its citizens.

Sec. 91. Section 29-256a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) The State Building Inspector and the Codes and Standards Committee shall revise the State Building Code to require that buildings and building elements be designed to provide optimum cost-effective energy efficiency over the useful life of the building. Such revision shall [meet] exceed by not less than twenty per cent the American Society of Heating, Refrigerating and Air Conditioning Engineers Standard 90.1 for new construction.

(b) Notwithstanding subsection (a) of this section, the State Building Inspector and the Codes and Standards Committee shall revise the State Building Code to require that any (1) building, except a residential building with no more than four units, constructed after January 1, 2010, that is projected to cost not less than five million dollars, and (2) renovation to any building, except a residential building with no more than four units, started after January 1, 2010, that is projected to cost not less than two million dollars shall be built or renovated using building construction standards consistent with or exceeding 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. The inspector and the committee shall provide for an exemption for any building if the Institute for Sustainable Energy finds, in a written analysis, that the cost of such compliance significantly outweighs the benefits.

Sec. 92. Subsection (a) of section 16-245e of the general statutes is amended by adding subdivisions (14) to (18), inclusive, as follows (Effective from passage):

(NEW) (14) "State rate reduction bonds" means the rate reduction bonds issued on June 23, 2004, by the state to sustain funding of conservation and load management and renewable energy investment programs by substituting for disbursements to the General Fund from the Energy Conservation and Load Management Fund, established by section 16-245m, and from the Renewable Energy Investment Fund, established by section 16-245n, as amended by this act. The state rate reduction bonds for the purposes of section 4-30a shall be deemed to be outstanding indebtedness of the state;

(NEW) (15) "Operating expenses" in connection with the state rate reduction bonds, means (A) all expenses, costs and liabilities of the state or the trustee incurred in connection with the administration or payment of the state rate reduction bonds or in discharge of its obligations and duties under the state rate reduction bonds or bond documents, expenses and other costs and expenses arising in connection with the state rate reduction bonds or pursuant to the financing order providing for the issuance of such bonds including any arbitrage rebate and penalties payable under the code in connection with such bonds, and (B) all fees and expenses payable or disbursable to the servicers or others under the bond documents;

(NEW) (16) "Bond documents" means, in connection with the state rate reduction bonds, the following documents: The servicing agreements, the tax compliance agreement and certificate, and the continuing disclosure agreement entered into in connection with the state rate reduction bonds and the indenture;

(NEW) (17) "Indenture" means, in connection with the state rate reduction bonds, the RRB Indenture, dated as of June 23, 2004, by and between the state and the trustee, as amended from time to time; and

(NEW) (18) "Trustee" means in connection with the state rate reduction bonds the trustee appointed under the indenture.

Sec. 93. Section 16-245e of the general statutes is amended by adding subsection (l) as follows (Effective from passage):

(NEW) (l) The sum of ninety-five million dollars is appropriated to the Treasurer, from the General Fund, for the fiscal year ending June 30, 2007, for the purpose of (1) defeasing the state rate reduction bonds maturing after December 30, 2007, by irrevocably depositing with the bond trustee in trust such appropriation to be used for the scheduled payments of principal and interest on the said state rate reduction bonds and paying operating expenses, (2) if the Treasurer determines it to be in the state's best interest, purchasing state rate reduction bonds maturing after December 30, 2007, in the open market on such terms and conditions as the Treasurer determines to be in the best interest of the state for purposes of satisfying such bonds, or (3) defeasing or satisfying the state rate reduction bonds maturing after December 30, 2007, by a combination of the methods described in subdivisions (1) and (2) of this subsection. Such appropriation is for the purpose of paying debt service on bonds or other evidences of indebtedness and related costs and expenses provided for in the indenture. After the defeasance or satisfaction of all outstanding state rate reduction bonds, the trustee shall deliver to the Treasurer or apply in accordance with the instructions of the Treasurer all moneys held by it not necessary to defease or satisfy such bonds or allocated to pay operating expenses. Such funds shall be first applied to satisfy any unpaid operating expenses. After payment of the operating expenses, seventy-five per cent of any remaining amounts shall be paid to the Energy Conservation and Load Management Fund, established pursuant to section 16-245m, and twenty-five per cent of such remaining amount shall be paid to the Renewable Energy Investment Fund, established pursuant to section 16-245n, as amended by this act. The Treasurer and the finance authority have the authority to take any necessary and appropriate actions to implement the defeasance or satisfaction of the state rate reduction bonds and the payment of all operating expenses so that the amount of state rate reduction charges which before defeasance secured the state rate reduction bonds can be applied to the Energy Conservation and Load Management Fund and the Renewable Energy Investment Fund.

Sec. 94. Subsection (b) of section 32-317 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(b) Except as provided under subsection (c) of this section, any such loan or deferred loan shall be available only for a residential structure containing not more than four dwelling units, shall be not less than four hundred dollars and not more than [fifteen] twenty-five thousand dollars per structure and shall be made only to an applicant who submits evidence, satisfactory to the commissioner, that the adjusted gross income of the household member or members who contribute to the support of his household was not in excess of one hundred fifty per cent of the median area income by household size. Repayment of all loans or deferred loans made under this subsection shall be subject to a rate of interest to be determined in accordance with subsection (t) of section 3-20 and such terms and conditions as the commissioner may establish. The State Bond Commission shall establish a range of rates of interest payable on all loans or deferred loans under this subsection and shall apply the range to applicants in accordance with a formula which reflects their income. Such range shall be not less than zero per cent for any applicant in the lowest income class and not more than one per cent above the rate of interest borne by the general obligation bonds of the state last issued prior to the most recent date such range was established for any applicant for whom the adjusted gross income of the household member or members who contribute to the support of his household was at least one hundred fifteen per cent of the median area income by household size.

Sec. 95. (Effective July 1, 2007) (a) For the purposes described in subsection (b) of this section, the State Bond Commission shall have the power, from time to time, to authorize the issuance of bonds of the state in one or more series and in principal amounts not exceeding in the aggregate thirty million dollars.

(b) The proceeds of the sale of said bonds, to the extent of the amount stated in subsection (a) of this section, shall be used by Connecticut Innovations, Incorporated, for the purpose of funding the net project costs, or the balance of any projects after applying any public or private financial incentives available, for any renewable energy or combined heat and power projects in state buildings. The funds shall be made available through the Renewable Energy Investment Fund, established pursuant to section 16-245n of the general statutes, as amended by this act. Eligible state buildings shall be Leadership in Energy and Environmental Design (LEED) certified or in the process of becoming LEED certified.

(c) All provisions of section 3-20 of the general statutes, or the exercise of any right or power granted thereby, which are not inconsistent with the provisions of this section are hereby adopted and shall apply to all bonds authorized by the State Bond Commission pursuant to this section, and temporary notes in anticipation of the money to be derived from the sale of any such bonds so authorized may be issued in accordance with said section 3-20 and from time to time renewed. Such bonds shall mature at such time or times not exceeding twenty years from their respective dates as may be provided in or pursuant to the resolution or resolutions of the State Bond Commission authorizing such bonds. None of said bonds shall be authorized except upon a finding by the State Bond Commission that there has been filed with it a request for such authorization which is signed by or on behalf of the Secretary of the Office of Policy and Management and states such terms and conditions as said commission, in its discretion, may require. Said bonds issued pursuant to this section shall be general obligations of the state and the full faith and credit of the state of Connecticut are pledged for the payment of the principal of and interest on said bonds as the same become due, and accordingly and as part of the contract of the state with the holders of said bonds, appropriation of all amounts necessary for punctual payment of such principal and interest is hereby made, and the State Treasurer shall pay such principal and interest as the same become due.

Sec. 96. (Effective from passage) During the calendar year 2007, Operation Fuel, Incorporated, shall establish a one-time clean-slate program to target low-income persons with high arrearages. Said program shall constitute a one-time grant based on the recipient's income and arrearage amount. Grants shall only apply to arrearages no more than twenty-four months old and shall not exceed one thousand dollars. Said program shall also incorporate case management services, including, but not limited to, budget counseling and assistance with utility payment programs.

Sec. 97. Section 16a-41h of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) (1) Each electric [and] distribution company, gas company [, as defined in section 16-1, having at least seventy-five thousand customers] and municipal utility furnishing electric or gas service, shall include in its monthly bills a request to each customer to add a [one-dollar] donation in an amount designated by the customer to the bill payment. Such company shall provide to all of its customers the opportunity to donate one dollar, two dollars, three dollars or another amount on each bill provided to a customer either through the mail or electronically. Such designation shall be made available and included where customers are either electronically billed or bill payment is handled electronically. The opportunity to donate one dollar, two dollars, three dollars or another amount shall be included on the bill in such a way that facilitates such donations.

(2) Operation Fuel, Incorporated, a state-wide nonprofit organization designed to respond to people within the state who are in financial crisis and need emergency energy assistance, shall provide fundraising inserts and remittance envelopes to retail dealers of fuel oil that volunteer to include the inserts and envelopes in their customers' bills for one or more billing cycles each year. Such retail dealers of fuel oil shall inform Operation Fuel, Incorporated, as to the number of inserts and envelopes needed to conduct such a mailing.

(3) Each electric, gas or fuel oil company shall transmit all such donations received each month, as well as their own contributions, if any, to Operation Fuel, [Inc., a state-wide nonprofit organization designed to respond to people within the state who are in financial crisis and need emergency energy assistance. Donations] Incorporated. Operation Fuel, Incorporated shall [be distributed] distribute donations to nonprofit social services agencies and private fuel banks in accordance with guidelines established by the board of directors of Operation Fuel, Inc., provided such funds shall be distributed on a priority basis to low-income elderly and working poor households which are not eligible for public assistance or state-administered general assistance but are faced with a financial crisis and are unable to make timely payments on [winter] fuel, electricity or gas bills. Such companies shall coordinate their promotions of this program, holding promotions during the same month and using similar formats.

(b) If Operation Fuel, Inc. ceases to exist, such electric and gas companies shall jointly establish a nonprofit, tax-exempt corporation for the purpose of holding in trust and distributing such customer donations. The board of directors of such corporation shall consist of eleven members appointed as follows: Four by the companies, each of which shall appoint one member; one by the president pro tempore of the Senate; one by the minority leader of the Senate; one by the speaker of the House of Representatives; one by the minority leader of the House of Representatives; and three by the Governor. The board shall distribute such funds to nonprofit organizations and social service agencies which provide emergency energy or fuel assistance. The board shall target available funding on a priority basis to low-income elderly and working poor households which are not eligible for public assistance or state-administered general assistance but are faced with a financial crisis and are unable to make timely payments on [winter] fuel, electricity or gas bills.

(c) Not later than the first of September annually, Operation Fuel, Inc. shall submit to the General Assembly a report on the implementation of this section. Such report shall include, (1) a summary of the effectiveness of the program, (2) the total amount of the donations received by electric and gas companies and transmitted to Operation Fuel, Inc. under subsection (b) of this section, and (3) an accounting of the distribution of such funds by Operation Fuel, Inc. indicating the organizations and agencies receiving funds, the amounts received and distributed by each such organization and agency and the number of households each assisted. On and after October 1, 1996, the report shall be submitted to the joint standing committee of the General Assembly having cognizance of matters relating to energy and, upon request, to any member of the General Assembly. A summary of the report shall be submitted to each member of the General Assembly if the summary is two pages or less and a notification of the report shall be submitted to each member if the summary is more than two pages. Submission shall be by mailing the report, summary or notification to the legislative address of each member of the committee or the General Assembly, as applicable.

Sec. 98. Section 4a-67d of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) The fleet average for cars or light duty trucks purchased by the state shall: (1) On and after October 1, 2001, have a United States Environmental Protection Agency estimated highway gasoline mileage rating of at least thirty-five miles per gallon and on and after January 1, 2003, have a United States Environmental Protection Agency estimated highway gasoline mileage rating of at least forty miles per gallon, (2) comply with the requirements set forth in 10 CFR 490 concerning the percentage of alternative-fueled vehicles required in the state motor vehicle fleet, and (3) obtain the best achievable mileage per pound of carbon dioxide emitted in its class. The alternative-fueled vehicles purchased by the state to comply with said requirements shall be capable of operating on natural gas or electricity or any other system acceptable to the United States Department of Energy that operates on fuel that is available in the state.

(b) Notwithstanding any other provisions of this section, (1) on and after January 1, 2008, any car or light duty truck purchased by the state shall have an efficiency rating that is in the top third of all vehicles in such purchased vehicle's class and fifty per cent of such cars and light duty trucks shall be an alternative fueled, hybrid electric or plug-in electric vehicle, and (2) on and after January 1, 2010, any car or light duty truck purchased by the state shall have an efficiency rating that is in the top third of all vehicles in such purchased vehicle's class and one hundred per cent of such cars and light duty trucks shall be alternative fueled, hybrid electric or plug-in electric vehicles.

[(b)] (c) The provisions of [subsection (a)] subsections (a) and (b) of this section shall not apply to cars or light duty trucks purchased for law enforcement or other special use purposes as designated by the Department of Administrative Services.

[(c)] (d) As used in this section, the terms "car" and "light duty truck" shall be as defined in the United States Department of Energy Publication DOE/CE -0019/8, or any successor publication.

Sec. 99. (Effective from passage) (a) The sum of two million five hundred thousand dollars is appropriated to the Office of Policy and Management, from the General Fund, for the fiscal year ending June 30, 2007, for the purpose of implementing the clean slate program pursuant to section 96 of this act.

(b) The sum of one million seven hundred fifty thousand dollars is appropriated to the Office of Policy and Management, from the General Fund, for the fiscal year ending June 30, 2007, for the purpose of expanding Operation Fuel, Incorporated, pursuant to section 16a-41h of the general statutes, as amended by this act.

(c) The sum of seven hundred fifty thousand dollars is appropriated to the Office of Policy and Management, from the General Fund, for the fiscal year ending June 30, 2007, for Operation Fuel, Incorporated's infrastructure, technology support and case management services pursuant to section 16a-41h of the general statutes, as amended by this act.

Statement of Legislative Commissioners:

In section 94, new provisions were inserted into section 32-317 of the general statutes.

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 the electric industry structure and energy related programs that could affect rates paid by the state and municipalities, the extent of which cannot be determined at this time.

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

Section 1 establishes a $500 rebate for the purchase and installation of replacement residential gas and oil heating equipment in residential structures containing up to four dwelling units from July 1, 2007 through July 1, 2017. The bill allows the proceeds of bonds to fund the rebates; it is anticipated that the rebates will only be provided to the extent there are sufficient funds. There is no fiscal impact for the Office of Policy (OPM) and Management to administer this program.

Section 2 PA 05-2, An Act Concerning Emergency Home Heating Assistance, October Special Session (OSS), authorizes $5 million in General Obligation (GO) bond funds for Energy Conservation Loan Fund to provide low-cost loans for various energy efficiency and renewable energy measures in residential structures. This bill expands the use of these funds to include rebates of up to $500 for certain energy-related purchases. This provision will not result in an immediate fiscal impact to the General Fund because it does not authorize additional GO bonds. However, to the degree it causes bond funds to be expended more rapidly than they otherwise would have been, there will be an increase in debt service costs in future years. The unallocated bond balance for the Energy Conservation Loan fund is $5 million as of 3/27/07.

Sections 3 and 41 require the Energy Conservation Management Board (ECMB) to establish a rebate program to replace air conditioners that do not meet Energy Star efficiency standards with ones that do. ECMB estimates the cost of this program to be approximately $9.7 million. In calendar year (CY) 2006¹, the Conservation and Load Management (CL&M) Fund, now referred to as the Connecticut Energy Efficiency Fund (CEEF) has a budget of approximately $70.2 million and experienced inflows of approximately $68.6 million and outflows of approximately 71.0 million (see below):

Inflows were less than outflows, because collections are based on actual kilowatt sales, which were less than projected.

Section 9 requires the Connecticut Siting Council (CSC) to initiate a contested case to investigate energy security. It is anticipated that outside consultants could cost CSC $50,000-$100,000 for outside consultants.

Sections 11-12 requires that new state facilities costing $5 million or more must comply with energy efficiency building standards adopted by the Office of Policy and Management (OPM), per PA 06-187. This bill increases the standards and extends them to renovation projects at state facilities and state-funded school and housing projects costing $2.0 million or more. It also requires the Institute for Sustainable Energy rather than OPM to determine whether the cost of compliance significantly outweighs the benefits. It is anticipated that any additional construction costs associated with the energy efficiency building standards will only be incurred in cases where the operational savings exceed the cost, over the life of the building.

These provisions are expected to have potentially significant impacts on the operating budgets and debt service accounts of both the General Fund and Transportation Fund. Since building construction is financed with bond funds, any increase in construction costs would result in an increase in General Fund or Transportation Fund debt service costs. Under the provisions of PA 06-187, the up-front cost to design and construct a building to a "silver rating" was minimal and was not expected to significantly increase the cost and resulting debt service cost related to capital project bonding. This bill sets the state standard higher by requiring that the building additionally meet energy standards that surpass by 20% the standards set by the American Society of Heating, Ventilation and Air Conditioning Engineers (ASHRAE²), which may increase building costs significantly.

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.

The bill increases by 2% the grant-in-aid reimbursement rate³ for school construction projects subject to the green buildings requirements, which could significantly increase the state's costs for these projects. 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. It should be noted that the operating cost savings for these buildings would accrue to the municipalities.

Sections 13-18 make OPM, rather than DPUC, responsible for implementing and revising energy efficiency standards for a variety of equipment. It is anticipated that OPM will require two additional staff members with annual salaries totaling $120,000⁴ and associated other expenses of $2,500 annually.

Sections 16 and 18 require the Department of Administrative Services (DAS) and other purchasing agencies to buy appliances and equipment that meet or exceed federal Energy Star standards. Purchasing certain appliances and equipment that meet or exceed federal Energy Star standards will be more costly than appliances and equipment currently purchased by the state. The new requirement will result in increased costs to DAS and various state agencies.

Section 21 of the bill allows municipalities to exempt hybrid motor vehicles and vehicles that with fuel efficiencies of at least 40 miles per gallon from the property tax. Municipalities electing to exempt these vehicles from the property tax will experience a loss to their net grand list (assessed value less exemptions permitted under state law) and will likely necessitate an increase in a municipality's mill rate to offset the loss of taxable property.

Section 22 of this bill establishes a sales tax exemption for vehicles with fuel efficiencies of at least 40 miles per gallon from 1/1/08 to 7/1/10. This is anticipated to result in a General fund revenue loss of up to $1 million in FY 08 and up to $2 million⁵ in FY 09 and FY 10.

Sections 26-32 permit Energy Improvement District Boards to issue bonds. This has no state fiscal impact because the section specifies that these bonds are not obligations of the state.

The bonding provisions create a liability for any town that chooses to guarantee such bonds. If the revenues intended to pay debt service on the bonds are insufficient to cover the liability, the guarantee requires that the town appropriate sufficient funds to cover the shortfall. This would require the town to either reduce funding for its own budget or increase revenue collected from taxes. The language specifies that the guaranteed bonds would not count toward a municipality's debt cap so towns choosing to provide a guarantee for these bonds will not be limited in their ability to issue bonds for other purposes.

The bill increases energy efficiency standards and extends them to renovation projects at school construction and housing projects costing $2.0 million or more when state funds are used. The Institute for Sustainable Energy would be able to exempt any buildings when the cost of compliance significantly outweighs the benefits. Therefore, the increases in construction costs for towns would be offset by: (1) the 2% increase in the state reimbursement rate for school construction projects, and (2) 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.

Section 41 expands the potential use of the Renewable Energy Investment Fund (Fund). The approximate monthly rate payer contributions to the Fund are $1.9 million and the unrestricted net asset balance as of 2/28/7 is $81.7 million.

Section 48 results in a potential increase in the administrative workload of the Department of Environmental Protection (DEP) incurred from entering into a lease agreement with a private entity for hydroelectricity. This is anticipated to be minimal and can be handled within existing resources. Any potential revenue gain to the state would depend upon the parameters of the lease agreements and is anticipated to be minimal.

Section 50 of the bill requires, rather than allows, municipalities to exempt class I renewable resources and hydropower facilities from the property tax. It also requires them to exempt solar water or space heating systems and geothermal energy resources from the tax. Municipalities will experience a loss to their net grand list (assessed value less exemptions permitted under state law) as a result of having to exempt this property and will likely necessitate an increase in a municipality's mill rate to offset the loss of taxable property.

Section 55 requires electric companies to develop a triennial comprehensive plan for procurement of energy resources. In order for DPUC to perform energy resource planning required in this section, and review the proposed resource plan submitted by the utility companies, the agency would require additional staff resources totaling approximately $235,000 in FY 08 and $242,000 in FY 09, including fringe benefits. This funding is anticipated for an Engineer and two Energy Planners.

Sections 57-59 require DPUC to issue new RFP's based on results of the integrated resources plan, consider the plan in an uncontested docket, and implement the plan. If suitable proposals are not received by DPUC from utility companies, DPUC must conduct a needs assessment as a contested case and may issue a new RFP to electric companies. In order to accomplish these tasks, DPUC would require an additional Attorney, Utilities Examiner, a Lead Rate Specialist, and an Engineer totaling about $504,000 in FY 08, and $519,442 in FY 09, including fringe benefits. Outside consultants may also be required by DPUC to implement provisions in these sections. These consultants would total approximately $200,000-$300,000 annually, the cost of which would be borne by ratepayers. The extent to which this additional cost may affect the state and municipalities as ratepayers, cannot be determined at this time.

Section 60 funds natural gas conservation programs with up to $10 million in revenue from the public service companies' tax that is in excess of the amount approved by the Finance, Revenue, and Bonding Committee in support of the state budget. This could result in a General Fund revenue loss of up $10 million per year.

Sections 64 and 65 require the Department of Environmental Protection (DEP) to issue a final decision on certain permits no later than 120 days following submission of an application within air program resources and to the extent that a hearing is not requested, and enter into a memorandum of understanding. Both of these duties can be performed within existing agency resources.

Section 66 results in a cost to the Department of Transportation (DOT) and is anticipated to be in excess of $1 million. PA 05-210 eliminated DOT's cost sharing requirements when electric transmission and trunkline facilities had to be relocated in highway rights-of-way. This section of the bill limits these changes to facilities owned by an electric distribution company. Therefore, DOT will incur significant costs, in excess of $1 million, to relocate a transmission line that is not owned by electric distribution companies but rather owned by a power generator, municipality or other entity.

Currently, a portion of a 345-kilovolt transmission line is being constructed within the state right-of-way. Construction costs are in the range of $2 million to $4 million per 1,500 foot section. Any relocation required due to improvement of the transportation system in the future would cost at least the same amount. Relocation of one mile of the transmission line could potentially cost over $10 million.

Section 73 funds fuel oil conservation programs with the increase in revenue from the petroleum products gross receipts tax above 2006 revenue, subject to a $10 million annual cap. This is anticipated to result in a General Fund revenue loss of $10 million per year beginning in FY 08 because current projections for this tax far exceed 2006 collections.

Section 78 requires the Department of Social Services (DSS) to (a) maintain basic and contingency heating assistance program benefits under the Connecticut Energy Assistance Program (CEAP) at 2006/2007 levels during the 2007/2008 heating season; (b) increase the number of households weatherized pursuant to CEAP; and (c) increase the number of households receiving home heating equipment tune-ups and home energy efficiency measures pursuant to the HEARTH program⁶.

The ability of the agency to comply with Section 19's provisions without needing to expend state dollars during 2008 will depend upon (a) the amount of federal dollars received by Connecticut in FFY 08; (b) whether CEAP enrollment is restricted or open, and (c) the number of households weatherized, and receiving heating tune-ups/other home energy efficiency measures.

CEAP is funded with federal Low Income Home Energy Assistance Program (LIHEAP) dollars. To date, a total of approximately $60.1 million has been made available to support the state's 2006/2007 plan. Additional federal dollars may be received if the President releases previously authorized contingency funding, and/or if supplemental FFY 07 appropriations bills are passed.

Original estimates indicated that the 2006/2007 CEAP plan would result in program costs of approximately $64.3 million ($4.2 million more than currently available funding). If no additional federal funding is forthcoming, the DSS may incur unbudgeted state costs in 2007. (While the Commissioner of Social Services has the discretion to limit program enrollment to operate within available funding, he does not intend to close enrollment this year.) The President's FY 08 proposed LIHEAP budget includes an estimated $30.8 million for Connecticut. Final federal appropriations will likely not be known until Fall 2007.

The CEAP plan has traditionally included moneys (usually $0.5 or $1.0 million annually) for emergency heating system repairs/replacement for heating systems determined to be unsafe or inoperable. It is assumed that comparable funding would be proposed within the 2007/2008 plan, and would meet Section's 19 requirement that the agency increase the number of households receiving home heating equipment tune-ups and home energy efficiency measures. CEAP eligible households have also historically been allowed to use a portion of their basic or crisis benefits to cover the cost of a clean, tune and test of their deliverable fuel heating system.

However, the state has not historically utilized LIHEAP dollars for household weatherization activities. Estimated average costs per household of $3,000 would be incurred. The ability of the agency to support these costs within available LIHEAP funding will depend upon the number of households receiving these weatherization services (not specified in the bill), and overall available program funding, as discussed above.

Section 79 expands the types of fuel that can be purchased under CEAP to any deliverable fuel (currently number two home heating oil), and requires DSS to utilize fixed price, capped price, pre-purchase, summer-fill, or other programs that reduce the cost of fuel purchased. The extent of any resulting savings will depend upon the agency's success in utilizing these cost reduction strategies, which cannot be determined in advance.

Requiring community action agencies to accept CEAP applications no later than September 1^st annually, and report pricing information per Section 79 (c) will potentially result in significant administrative costs. Reimbursing these private agencies for their additional administrative efforts would reduce resources available for benefits and services to participating households.

Sections 81-83 exempt various energy related items from the sales tax, which is anticipated to result in a General Fund revenue loss of $21.0 million in FY 08 and $8.0 million in FY 09. The table below presents the loss associated with each item.

Section 85 increases the maximum credit under the Neighborhood Assistance tax credit program from 60% to 100% for a firm's investments in energy conservation projects in low income housing developments or properties occupied by charitable organizations and expands the program to include investments in energy conservation projects for other facilities owned by charitable organizations. These changes are anticipated to result in General Fund revenue loss of up $1 million beginning in FY 09.

About 90 to 100 corporations claim approximately $1.3 million per year (the program has a cap of $5 million/yr) under the Neighborhood Assistance program.

Section 86 authorizes the issuance of $30 million in General Obligation (GO) bonds for energy conservation projects in state-owned buildings. The General Fund debt service cost to bond this amount over 20 years at a 5.0% interest rate is $45.8 million.

Section 87 permits CHEFA to provide financial assistance to certain organizations for: (1) energy efficient construction or renovation projects or (2) renewable energy construction or renovation projects using bonds issued by CHEFA. This has no state fiscal impact because these bonds are not obligations of the state

Section 88 and 94 reinstates the reduction in the potential maximum interest rate for loans under the Energy Conservation Loan Program from provisions in PA 05-2 Special Session, but excludes siding and replacement roofs from these rates. In addition, the bill increases the maximum loan to owners of residential properties with no more than 4 units from $15,000 to $25,000. The change in the maximum loan is anticipated to have a very minimal impact on the number of loans closed in a year and have no impact on costs to the state. The Connecticut Housing Investment Fund Inc. (CHIF) has the contract to administer the Energy Conservation Loan (ECL) program for the Department of Economic and Community Development (DECD). The ECL revolving loan fund has an estimated balance of $4.9 million and the current unallocated General Obligation (GO) bond balance for the ECLF is $5 million as of 3/23/07. The administrative costs will be handled through program funds.

Sections 89-90 bar certain municipalities from condemning or restricting the operation of any existing energy facility that DPUC has determined to be a critical component of the state's power structure under certain circumstances. The extent to which any particular municipality and state electric rates could be affected by this change is unknown at this time.

Sections 92 and 93 provide $95 million from the General Fund in FY 07 to defease⁸ state rate reduction bonds that mature after 12/30/07. The $95 million will be deposited into an irrevocable trust account where it will be invested and accumulate interest. The funds in this account will be used to pay the debt service due on the bonds at their maturity date (column c in table below).

No fiscal impact to State Treasurer's Office to do bond defeasance.

Section 95 authorizes the issuance of $30 million in General Obligation (GO) bonds for renewable energy projects in state-owned buildings through the Renewable Energy Investment Fund. The General Fund debt service cost to bond this amount over 20 years at a 5.0% interest rate is $45.8 million. The Connecticut Innovations Inc. (CII) would need ½ of a full time employee plus fringe benefits and associated other expenses at a cost of approximately $100,000 in FY 2008 to administer the renewable energy projects in state building program. It is anticipated that these costs would come from CII's operating funds.

Sections 96 and 99 direct Operation Fuel to establishes a one-time clean slate program to target low income people with high arrearages of more than 24 months and less than $1,000, and provide grants based on income and arrearage amount. The bill appropriates $2.5 million in FY 07 to the Office of Policy and Management to implement the Clean Slate Program.

Sections 97 and 99 makes changes to the Operation Fuel program, and appropriates $1.75 million to the OPM to expand Operation Fuel, Incorporated and appropriates $750,000 to OPM for Operation Fuel, Incorporated's infrastructure, technology support, and case management services.

Section 98 requires that any car or light duty truck purchased by the state after January 1, 2008 have an efficiency rating in the top third of its class, and 50% of such cars and light duty trucks must be alternative fueled, hybrid electric or plug-in electric vehicles. As the state meets the federal requirement that 75% of cars and light duty trucks purchased must be alternative fueled, this provision has no fiscal impact.

Requiring that cars and light duty trucks purchased after January 1, 2008 must have an efficiency rating in the top third of all vehicles in its class could conflict with federal law requiring the purchase of alternative fueled vehicles (which are not always “efficient” as that term is defined in the industry). Non-compliance with federal law could subject the state to the risk of fines and penalties.

The bill also requires that cars and light duty trucks purchased by the state after January 1, 2010 must have an efficiency rating in the top third of its class, and 100% of such cars and light duty trucks must be alternative fueled, hybrid electric or plug-in electric vehicles. There will be increased costs in FY 10 for the state to purchase cars and light duty trucks that are 100% alternative fueled, hybrid electric or plug-in electric.

The Out Years

Except as otherwise described above, the annualized ongoing fiscal impact identified above would continue into the future subject to inflation. In addition, the future effect on the state and municipalities as electric ratepayers is uncertain and cannot be determined at this time.



OLR Bill Analysis

sHB 7098

AN ACT CONCERNING CONNECTICUT'S ENERGY FUTURE.

SUMMARY:

This bill establishes many energy initiatives, promoting energy efficiency, electric system reliability, renewable energy, and distributed generation (small on-site generators). It modifies the way that electric companies procure power for the standard service and last resort service they provide to customers who do not choose competitive suppliers. It allows electric companies to build, with the approval of the Department of Public Utility Control (DPUC), power plants that are used to meet peak demand.

Among other things, the bill:

1. replaces money transferred from the electric companies' conservation funds and the state's Clean Energy Fund to the General Fund;

2. expands “green building” requirements to many state-funded school projects and large private sector building projects;

3. increases, by two percentage points, the reimbursement rate under the school construction grant program for those projects subject to the green building standards;

4. establishes funding mechanisms for natural gas and heating oil conservation programs;

5. authorizes $30 million in bonds for energy efficiency projects in state buildings and $30 million in bonds for renewable energy projects in state buildings;

6. increases the renewable portfolio standard, under which electric companies and competitive suppliers must obtain part of their power from renewable resources;

7. requires the electric companies to develop integrated resources plans to meet their customers' needs, which would emphasize energy efficiency;

8. requires DPUC to approve and implement these plans;

9. requires the social services (DSS) commissioner to maintain the increases in benefits under the Connecticut Energy Assistance Program (CEAP) the legislature adopted in 2005;

10. extends the end date of the winter utility shut-off moratorium; and

11. restricts municipalities' use of their eminent domain powers with regard to existing energy facilities.

EFFECTIVE DATE: Various, see below.

ENERGY EFFICIENCY

§§ 1, 2: Energy Efficient Replacement Furnace Program

The bill requires, between July 1, 2007 and July 1, 2017, the Office of Policy and Management (OPM) secretary to provide a $500 rebate for the purchase and installation of replacement heating equipment that is at least 84% efficient. The rebate is available for equipment installed in residential structures containing up to four dwelling units.

The bill allows the proceeds of bonds issued under PA 05-2, October 25 special session, to be used for this program.

EFFECTIVE DATE: Upon passage for the bond authorization, July 1, 2007 for the program.

§ 3: Air Conditioning Replacement Program

The bill requires the Energy Conservation Management Board (ECMB), in consultation with the electric companies, to establish a rebate program for residential customers who replace air conditioning units that do not meet the federal Energy Star efficiency standards with ones that do. ECMB must implement the program by January 1, 2008 to September 1, 2008. The rebate ranges from at least $25 to at least $100 for room air conditioners, depending on the cost of the new air conditioner. The bill provides a rebate of at least $500 to residential customers who replace a central air conditioning unit that does not meet the Energy Star standards with one that does. The program must be funded from the existing electric company conservation funds.

The Department of Consumer Protection (DCP) may (1) allow retailers to participate in the program only if they certify that the grants go only to customers who replace their air conditioners and (2) may fine retailers up to $10,000 if they inappropriately provide grants.

DPUC must report to the Energy and Technology Committee by January 1, 2009 on the program's results.

EFFECTIVE DATE: Upon passage

§§ 11, 12, 91: Green Building Standards for State-Funded Projects and New Non-Residential Buildings

The bill broadens and increases the state's “green building” requirements. Under current law, state facilities costing $5 million or more, funded on or after January 1, 2007 (with limited exceptions), must meet specified energy and environmental standards. The current standards are a silver rating under the Leadership in Energy and Environmental Design (LEED) program or its equivalent. The OPM secretary, in consultation with the public works commissioner and the Institute for Sustainable Energy, must waive the requirements if he finds that the cost of compliance significantly outweighs the benefits.

The bill, as of January 1, 2008, increases the standards by requiring that buildings additionally meet energy standards that surpass by at least 20% the standards contained in the 2004 edition of the American Society of Heating, Ventilation and Air Conditioning Engineers (ASHRAE) standard 90.1. In addition, the completed building design and specifications and the completed commissioned building will receive an energy performance rating of at least 75 under the federal Energy Star rating system. (Commissioning, in this context, means verifying that the building systems actually will operate as designed.)

The bill extends the “green building” requirements to (1) state-funded school construction and housing projects and garages and certain other structures costing $5 million or more and (2) state-funded renovations of state facilities and state-funded school and housing projects costing $2 million or more. It requires the institute, rather than the OPM secretary, to determine whether the cost of compliance significantly outweighs the benefits.

The bill increases, by two percentage points, the reimbursement rate under the school construction grant program for those projects subject to the green building requirements. The school district must certify to the Education Department that the school will meet the standards.

In addition, the bill requires the state building inspector and the Codes and Standards Committee to amend the state building code, which applies to private as well as public sector buildings, to require all buildings and building elements exceed the ASHRAE 90.1 standard by 20% rather than merely meet this standard. It requires the building inspector and the committee to amend the code to require large construction projects built on or after January 1, 2010 to meet the LEED Silver standard or similar energy and environmental standard. The requirements apply to new buildings costing $5 million or more and renovations costing $2 million or more, other than residential buildings with up to four units. The bill requires the inspector and the committee to waive these requirements if the Institute for Sustainable Energy finds that the cost of compliance significantly outweighs the benefits.

EFFECTIVE DATE: October 1, 2007 for the increased grant level for school construction projects and the building code provisions; January 1, 2008 for the energy and environmental standards in state and state-funded buildings.

§§ 13-18: Equipment Energy Efficiency Standards

The bill establishes energy efficiency standards for various commercial products. These include, among others, certain incandescent lamps, medium voltage transformers, bottled water dispensers, commercial hot food holding cabinets, portable electric spas, walk-in refrigerators and freezers, and pool heaters. In most cases, the standards go into effect January 1, 2009.

The bill establishes efficiency standards for residential furnaces and boilers purchased by the state on or after January 1, 2009. It requires the Department of Administrative Services and other purchasing agencies to buy appliances and equipment that meet federal Energy Star standards.

Under current law, DPUC, in consultation with OPM, must take several steps in implementing and revising the standards. The bill instead assigns these responsibilities to OPM, in consultation with DPUC.

EFFECTIVE DATE: October 1, 2007

§§ 21, 22: Tax Exemptions for Efficient Vehicles

The bill establishes a local option property tax exemption for hybrid vehicles and vehicles with fuel efficiencies of at least 40 miles per gallon.

The bill creates a sales tax exemption until July 1, 2010 for vehicles with city or highway fuel efficiencies of at least 40 miles per gallon.

EFFECTIVE DATE: January 1, 2008

§ 60: Natural Gas Conservation Programs

By law, natural gas companies must develop annual conservation plans, but current law does not provide a funding mechanism. The bill requires that the plans be funded by the growth in the utilities gross receipts tax in each fiscal year over the amount contained in the revenue estimate in the adopted budget for that year, subject to a $10 million per year cap. The money goes into an ECMB account, which is used to reimburse gas companies for their conservation expenditures. By law, the gas conservation programs are subject to the same evaluation and approval processes as the current electric conservation, i.e., programs must be cost effective and reviewed by the ECMB. The bill also removes a prohibition on DPUC establishing a gas conservation charge to support the programs in the plan.

EFFECTIVE DATE: July 1, 2007

§ 73: Fuel Oil Conservation Programs

The bill establishes a 15-member Fuel Oil Conservation Board, consisting of six members of the public appointed by the governor, the chairperson of the board that licenses heating and related contactors, one member representing an environmental advocacy group appointed by the Senate minority leader, and five members, including fuel oil dealers and related industry representatives, appointed by other legislative leaders. The six members appointed by the governor must include representatives of (1) an environmental organization, who must be knowledgeable in energy efficiency programs, (2) in-state generators, (3) a consumer advocacy group, (4) the business community, (5) low-income ratepayers, and (6) state residents in general. All of these members must have expertise in energy issues.

The bill requires the board to establish itself as a non profit organization and to issue an RFP to choose an entity to administer oil conservation programs. By November 1, 2007, it must contract with this entity for up to three years and can renew the contract.

By March 1, 2008 the program administrator must submit a comprehensive oil conservation plan for the rest of 2008 to the ECMB for its approval. In subsequent years, the administrator must submit a plan for the next calendar year by October 1 to the Fuel Oil Conservation Board for its approval. The Fuel Oil Conservation Board must assist the administrator develop and implement the plan. The bill imposes cost-effectiveness and other requirements on programs in the plan that parallel those in existing law regarding electric and natural gas conservation plans.

Under the bill, funding for the oil conservation programs comes from the increase in revenue from the petroleum products gross receipts tax sales above the 2006 revenue, subject to a $10 million annual cap. The money goes into a separate General Fund account. By July 1 in even-numbered years, a third party selected by the attorney general must audit the board's activities and submit its report to the Energy and Technology and Environment committees. By February 1 annually, starting in 2009, the board must report to these committees, on the fund's expenditures, balances, and program cost-effectiveness.

EFFECTIVE DATE: July 1, 2007

§§ 81-83: Sales Tax Exemptions for Energy Efficiency Goods

The bill (1) makes permanent the sales tax exemption for energy efficiency goods such as insulation, programmable thermostats, and furnaces that meet Energy Star standards and (2) makes oil furnaces and boilers that are 84% or more efficient, rather than 85% or more, eligible for this exemption.

The bill also permanently exempts from the sales tax (1) compact fluorescent light bulbs, (2) solar electric and space and water heating systems and related equipment and installation services; and (3) ice storage systems used for cooling and related equipment and installation services for utility customers billed on time-of-use rates. Finally, it exempts from the tax, until June 30, 2008, household appliances that meet federal Energy Star standards.

Effective date: Upon passage for the Energy Star appliances; June 1, 2007 for the energy efficiency goods and compact fluorescent lamps; and July 1, 2007 for the solar and ice storage systems.

§ 85: Tax credits under Van Norstrand Neighborhood Assistance Act

Current law provides a credit against business taxes of up to 60% of a firm's investments in energy conservation projects in low-income housing developments or properties occupied by charitable organizations. The bill (1) increases the maximum credit to 100% and (2) establishes a 100% credit for energy conservation investments in other properties owned by these organizations.

EFFECTIVE DATE: July 1, 2007

§ 86: Bonding for Energy Efficiency Projects in State Buildings

The bill authorizes up to $30 million in bonds for the Department of Public Works to fund the net project costs of energy efficiency projects in state buildings.

EFFECTIVE DATE: July 1, 2007

§ 87: Grants for Energy Efficiency Projects in Colleges, Hospitals, etc.

The bill allows the Connecticut Health and Educational Facilities Authority to provide grants or other financial assistance to colleges, health care facilities, nursing homes, day care centers, and other nonprofit organizations for energy efficiency and renewable energy construction and renovation projects.

EFFECTIVE DATE: October 1, 2007

§§ 88, 94: Low-Interest Energy Efficiency Loans

The bill reinstates, until June 30, 2008, provisions of PA 05-2, October 25 Special Session, that lowered the interest rate for the Connecticut Housing Investment Fund's (CHIF) energy efficiency loan program. But it excludes siding and replacement roof projects from the interest rate reduction.

The bill increases, from $15,000 to $25,000, the maximum loan that CHIF can provide to owners of one to four unit residential properties under this program.

EFFECTIVE DATE: Upon passage

§§ 92, 93: Restoring Utility Conservation Funds and the Clean Energy Fund

In recent years, the legislature has diverted part of the revenue that would have otherwise gone into the electric companies' conservation funds and the state's Clean Energy Fund and transferred it into the General Fund. To reduce the impact of the transfer on the conservation and clean energy funds, it authorized the issuance of bonds backed by future revenue from the conservation and renewable energy charges on electric bills.

The bill appropriates $95 million from the FY 07 budget to defease or buy back the bonds that mature after December 30, 2007, or a combination of these measures. Seventy-five percent of the revenue freed up as a result of this measure (net of the state's administrative costs) would go back into the conservation funds and 25% would go back into the Clean Energy Fund.

EFFECTIVE DATE: Upon passage

ELECTRIC RELIABILITY

§ 5: Dual Fuel Capacity at Power Plants

The bill requires that, starting January 1, 2008, DPUC order that each intermediate or baseload electric generating facility with a rating of 65 megawatts or more have the capacity to burn either oil or gas on 48 hours notice if it is (1) currently fueled by one of these fuels and (2) owned by or under contract to an electric company.

EFFECTIVE DATE: Upon passage

§ 6: Electric Company Linemen Staffing Levels

The bill requires DPUC, by September 1, 2007, to conduct a contested case proceeding to study (1) the appropriate number of linemen needed for an electric company to maintain, repair, and extend its distribution lines under normal circumstances and under extraordinary circumstances, including storms; (2) whether the consolidation of repair facilities results in longer restoration times; (3) whether greater use of newer technology would reduce outages; and (4) the most effective ways of notifying the public of an outage and the status of the company's efforts to restore power. DPUC must report the proceeding results to the Energy and Technology Committee by January 1, 2008.

EFFECTIVE DATE: Upon passage

§ 7: Wire Maintenance Plans

The bill requires each electric company to submit a plan to DPUC, by January 1, 2008, for maintaining transmission and distribution systems along highways, in a format DPUC prescribes. The plan must include a summary of appropriate staffing levels.

EFFECTIVE DATE: October 1, 2007

§ 8: Staffing Levels and Rates

By law, utility rates must be just sufficient to allow the utility to cover its operating and capital costs and attract needed capital. The bill specifies that operating costs include appropriate staffing levels. It also includes energy security as one of the responsibilities of utilities.

EFFECTIVE DATE: October 1, 2007

§ 9: Energy Security

The bill requires the Siting Council, in conjunction with the Coordinating Council of the Department of Emergency Management and Homeland Security, to investigate energy security with regard to siting of power plants and transmission facilities. The investigation must address planning, preparedness, and response and recovery capabilities. The Siting Council must begin the proceeding by September 1, 2007 and may conduct proceedings in an executive session to protect sensitive information covered by a protective order.

EFFECTIVE DATE: Upon passage

§ 10: DPUC Study on Electric Reliability

The bill requires DPUC, in consultation with the Siting Council, to conduct a contested case proceeding to assess ways the state can ensure and enhance the reliability of generating facilities in the state during peak electric demand periods. The proceeding must address:

1. the current compliance of generation facilities with existing on-site dual fuel storage and operational requirements,

2. the existing inventory of fuel storage and fuel delivery resources available to supply generating facilities in the state,

3. the amount of fuel delivery and storage infrastructure that would be needed to ensure the reliable operation of these facilities during peak demand periods,

4. the value of firm delivery contracts and the appropriate level of such contracts, and

5. the types of incentives that can be offered to the electric and gas industry to enhance the reliability of electric service during peak periods.

DPUC must begin the proceeding by September 1, 2007 and consult with the electric and gas industries, the Office of Consumer Counsel, the attorney general, and the entity that operates the New England power grid. DPUC must submit its findings and recommendations to the Energy and Technology Committee by January 1, 2008.

EFFECTIVE DATE: July 1, 2007

RENEWABLE ENERGY AND DISTRIBUTED RESOURCES

§ 4: Charges for Fuel Cell Owners

The bill requires an electric company or competitive supplier to waive its demand charge for a fuel cell operator during (1) a loss of power caused by problems with the company's distribution infrastructure or (2) a scheduled or unscheduled shutdown of the fuel cell that occurs during off-peak hours. The amount waived is limited to the charge incurred during the shutdown or as a result of the problem.

EFFECTIVE DATE: October 1, 2007

§§ 19, 20, 49: Funding for Distributed Resources

PA 05-1, June Special Session, established incentives for new distributed generation (e.g., small power plants using technology such as microturbines and fuel cells). One of the incentives for such generation located on a customer's premises is a one-time capital award of between $200 and $500 per kilowatt of capacity. Currently, the awards are funded by a charge on the bills of electric company customers.

The bill extends the incentives to such generation installed before January 1, 2007 if the generation (1) underwent upgrades that increased its thermal efficiency operating level by at least 10 percentage points, (2) operates at a thermal efficiency level of at least 50%, and (3) added electric capacity in the state on or after January 1, 2007. On the other hand, it limits the award, starting January 1, 2008, to the capacity that equals the customer's peak demand over the preceding 36 months, unless DPUC finds that an award for additional capacity is justified by net benefits the generation provides to other customers. When DPUC must consider the electric company's cost of energy, several forms of generating capacity charges, and other factors DPUC considers relevant.

The bill requires municipal electric utilities to contribute a pro rata share of the awards in order for their customers to be eligible for them. DPUC must conduct a contested case, by June 1, 2007, to determine the utility's share, which must reflect an equitable way of allocating costs that reflects the benefits to electric company customers as a result of these payments. Funding for the remaining portion of the award continues to come from electric company customers, paid in semiannual payments over a period of up to five years.

The bill requires the municipal utility customer to apply to DPUC for the award. The application must contain a certification by an independent licensed engineer that the project is financially viable and intended to reduce the customer's peak demand. These provisions already apply to utility company customers.

EFFECTIVE DATE: Upon passage for the cap on awards; July 1, 2007 for the expansion of the incentives for distributed generation; and January 1, 2008 for the municipal utility provisions.

§§ 23-38: Energy Improvement Districts

The bill allows municipalities to establish “energy improvement districts” and prescribes how they can be formed. It specifies the powers of such districts, which include developing and operating small power plants and certain conservation programs. It requires the district to develop a plan, in consultation with the Connecticut Center for Advanced Technology, for financing and developing these resources.

The bill gives the districts a wide range of powers, including hiring staff, operating distributed resources, and charging fees for its projects. The district's board can issue revenue bonds, which are subject to standard provisions regarding the bond issuance, revenue quarantees to back the bonds, trust indentures, and other bondholder rights. Districts are tax-exempt but can make payments in lieu of property taxes.

The bill gives municipalities a wide range of powers to aid districts, including guaranteeing the district's bonds, issuing general obligation bonds to support the district, and appropriating funds for the district's use.

EFFECTIVE DATE: Upon passage

§§ 39, 40: Power Plant Interconnection Standards

By law, electric utilities (including municipal electric utilities) must interconnect with non-utility generators. The bill requires DPUC to adopt regulations on interconnection standards by January 1, 2008 that meet or exceed national standards. (Interconnection standards deal with such things as the transformers that connect generating facilities with transmission lines). If DPUC does not adopt these regulations by October 1, 2008, each of the utilities and the municipal electric energy cooperative must meet New Jersey's interconnection standards.

EFFECTIVE DATE: October 1, 2007

§ 41: Clean Energy Fund Investments

The bill allows the Clean Energy Fund to invest in (1) alternative fuel, including ethanol, biodiesel, or other fuel, produced in Connecticut and derived from agricultural produce, food waste, or waste vegetable oil and (2) hydropower that will meet the low-impact standards of the Low-Impact Hydropower Institute. It also specifically allows the fund to invest in solar thermal and solar photovoltaic energy.

EFFECTIVE DATE: October 1, 2007

§ 42: Net Metering

By law, electric utilities and competitive suppliers must give a credit to their customers in one- to four-dwelling unit properties who generate electricity using class I renewable resources, such as wind or solar power, or hydropower. The bill expands these provisions to also cover commercial customers with generation capacity up to two megawatts, provides for payments to customers who generate more power than they use in a given billing period, and makes related changes.

EFFECTIVE DATE: October 1, 2007

§§ 43, 84: Renewable Portfolio Standard

Under current law, electric companies and suppliers must obtain 3.5% of their power from class I renewable resources in 2007, 5% in 2008, 6% in 2009, and 7% in 2010 and subsequent years under the state's renewable portfolio standard (RPS).

The bill increases the RPS for class I resources to 8% stating in 2011. It increases the class I RPS to 9% in 2012, 10% in 2013, 11% in 2014, 12.5% in 2015, 14% in 2016, 15.5% in 2017, 17% in 2018, 19.5% in 2019, and 20% in 2020 and thereafter (in each year, the company or supplier must continue to get an additional 3% of its power from class I or class II resources). The bill also allows companies and suppliers to meet the standard by buying power from residential net-metering customers. (Customers who generate power from class I resources.)

The bill additionally allows electric companies to procure renewable energy certificates from renewable energy sources that represent 50% or more of the company's procurement of these sources. (These credits are bought and sold on the New England market as one way of complying with renewable portfolio standards in Connecticut and other states. The credits can be sold separately from the power produced by renewable resources.) The bill allows the electric company to enter into a contract for up to 15 years to buy the certificates. The credits count towards the company's RPS compliance for the period covered by the certificates.

The bill requires DPUC to conduct a contested case to establish procedures for procuring certificates and the recovery of their costs by electric companies. The procedures must include (1) the method and timing of counting the procurement of the certificates against the RPS; (2) the terms and conditions to be imposed on entities seeking to supply the credits; and (3) compensation to the companies for administering procurement under these provisions, not to exceed 0.1 cent per kilowatt-hour. This compensation does not count towards the company's earnings for determining whether the company's rates are just and reasonable and do not have to be shared with ratepayers.

EFFECTIVE DATE: Upon passage for the renewable energy credits provisions; October 1, 2007 for the remaining provisions.

§ 44: Municipal Electric Utilities and Renewable Energy

The bill requires the Connecticut Municipal Electric Energy Cooperative (CMEEC) to develop standards for promoting renewable resources that apply to each municipal electric utility in the state. By January 1 annually, CMEEC must submit the standards to the group that advises Connecticut Innovations, Inc., which administers the Clean Energy Fund. The bill also requires CMEEC to submit an annual report to this group on the activities of municipal utilities to promote renewable resources.

EFFECTIVE DATE: July 1, 2007

§§ 45, 46, 47: Class III Renewable Resources

By law, electric companies and suppliers must get part of their supply from class III resources as part of the RPS. The bill makes several changes regarding these resources. Under current law, they are (1) electricity produced by systems that produce heat and power developed at commercial and industrial facilities and (2) electricity savings from conservation and load management programs at these facilities that began on or after January 1, 2006. Among other things, the bill expands class III resources to include (1) systems that recover waste heat or pressure from commercial and industrial processes installed on or after April 1, 2007 and (2) electricity savings from residential conservation programs that started on or after January 1, 2006. It excludes projects that violate Department of Environmental Protection's (DEP) water quality standards from the class III RPS. It also makes related changes.

It entitles a customer who implements energy conservation or customer-side distributed resources on or after January 1, 2008 to class III credits equal to at least 1 cent per kilowatt-hour. For projects receiving conservation and load management funding, 25% of the credit goes to the customer and the remainder to Conservation and Load Management Funds. For projects not receiving such funding that are submitted on or after March 9, 2007, 75% of the credit goes to the customer and the rest to the Conservation and Load Management Funds. For projects serving residential customers, 75% of the credits must go to the Conservation and Load Management Funds. (The bill does not specify where the rest goes.) By July 1, 2007, DPUC must conduct a contested case to develop a procedure for awarding and aggregating the credits.

In all cases, to be eligible for class III credits, the customer must annually submit a form to DPUC, certified by a licensed professional engineer, stating the number of kilowatt-hours he or she generated or saved.

The bill delays, from February 1, 2006 to February 1, 2008, the deadline for DPUC to issue a decision in a proceeding to develop administrative processes for a class III credit trading program.

EFFECTIVE DATE: October 1, 2007 for the requirement that class III resources meet DEP water standards and the delay in the DPUC decision deadline; upon passage for the remaining provisions.

§ 48: DEP Hydropower Agreements

The bill allows the DEP commissioner to enter lease agreements with private entities, in consultation with affected towns and watershed organizations, to allow the private entities to generate hydroelectricity.

EFFECTIVE DATE: October 1, 2007

§§ 50, 51: Property Tax Exemptions

The bill expands the scope of the property tax exemption for renewable energy systems and mandates the exemption rather than making it a local option. Under current law, municipalities can exempt class I renewable resources in one to four-unit residential buildings. The bill requires that they exempt these resources and any (1) passive or active solar water or space heating system or (2) geothermal energy resource, in both cases from any type of building. The bill also makes conforming changes.

EFFECTIVE DATE: October 1, 2007

§§ 62, 63: CEAB Review Process

By law, the Connecticut Energy Advisory Board (CEAB) must conduct an alternatives analysis when an application is made to the Siting Council to build certain energy facilities. The bill exempts generating facilities with a capacity of up to five megawatts and electric substations from this requirement. The bill also allows CEAB, by a two-thirds vote of the members present and voting, to waive this requirement for a specific application because the process is not likely to result in a reasonable alternative to the proposed facility. By December 1, 2007, the board must develop (after soliciting public comment) and approve additional criteria to apply when determining whether the process can be waived. CEAB must include its reasons in its determination.

EFFECTIVE DATE: July 1, 2007

§ 75: Siting Council Review

By law, a Siting Council certificate is not required for (1) any fuel cell with a capacity of up to 10 kilowatts, or (2) a larger fuel cell, unless the council finds that it causes substantial environmental harm. The bill extends the 10 kilowatt limit to 250 kilowatts for fuel cells manufactured in the state.

Under current law, a certificate is not needed for distributed generation resources below 65 megawatts, unless the facility violates DEP air quality standards. The bill additionally requires the facility to meet DEP water quality standards in order to be eligible for this exemption.

EFFECTIVE DATE: October 1, 2007

§ 81: Solar Energy, Geothermal, and Ice Storage Equipment Sales Tax Exemption

The bill exempts from the sales tax (1) sales of active and passive solar energy and geothermal systems, related equipment, and related installation services; and (2) sales of ice storage systems used for cooling, related equipment, and related installation service for utility customers on time-of-use rates.

EFFECTIVE DATE: July 1, 2007

§ 95: Bonding for Renewable Energy Projects in State Buildings

The bill authorizes $30 million in bonds for Connecticut Innovations, Inc., which administers the Clean Energy Fund, to fund the net project costs of renewable energy and combined heat and power (cogeneration) projects in state buildings. To be eligible, the building must be certified in the LEED program or in the process of being certified.

EFFECTIVE DATE: July 1, 2007

STANDARD SERVICE AND LAST RESORT ELECTRIC SERVICE

§ 53: Procurement and Pricing, “Green” Option, Project 100

By law, electric companies must provide (1) standard service to small and medium size customers who do not choose a competitive supplier and (2) supplier-of-last-resort service to large customers who do not choose a supplier. The bill transfers customers who have demand meters but whose maximum demand is less than 500 kilowatts from standard service to last-resort service. On the other hand, it entitles school districts and municipalities to standard service, regardless of their demand.

The bill requires DPUC, in analyzing the bids by wholesalers to provide power for both services, to determine whether they are consistent with the DPUC-approved plan for obtaining generation and other resources each electric company must develop under the bill.

By law, each company submitting a bid to provide electricity for standard service must submit it to the electric company and a third-party contractor selected by DPUC. The company and the contractor must review the bids and submit an overview of them, together with their joint recommendation, to DPUC. The bill additionally requires that they conduct a cost-based analysis of the bids. It requires DPUC to make all of the bids it receives and the analyses of them available to the Office of Consumer Counsel and the attorney general. They may not make the bids available to the public until DPUC does so.

By law, DPUC can reject the joint recommendation. The bill specifies that DPUC can do this if the bids are not in customers' best interest. It requires that once DPUC approves the bids, the electric company must enter into contracts with the approved bidders. It requires that all of the bids received during the procurement process be made available for public review three months after DPUC's approval or rejection, together with DPUC's findings and reasons for rejecting bids.

Under current law, DPUC must adjust the price of standard service periodically, but not more than once per quarter. The bill requires that DPUC set the price on an annual basis, but allows DPUC to adjust it as frequently as once per quarter if it determines that this would be in customers' interests. By October 1, 2009, and biennially thereafter, DPUC must conduct contested cases to review the efficacy of the process of procuring contracts for this service, including an assessment of the extent to which the integrated resource planning and procurement standards discussed below are met.

Under current law, DPUC can direct the electric companies to offer a “green” option, through licensed suppliers, in which a standard service customer can buy power that exceeds the RPS. The bill requires DPUC to direct the companies to offer this option, and requires that they offer customers an option for buying renewable energy directly. (Under the current program, customers buy renewable energy credits, rather than the actual “green” power.)

The bill requires DPUC to procure power for last-resort service annually. It allows DPUC, starting July 1, 2008, to study how often these rates should change. It allows prices to change more frequently based on this study.

As an alternative to the current procurement processes for standard service and last-resort service, the bill allows an electric company, until June 30, 2009, to enter into a tentative proposed supply contract. DPUC must review the proposed contract in a contested case, and if approved, the company can enter into the contract.

The bill requires the electric companies to enter into long-term contracts for 125, rather than 100, megawatts of class I renewable resources for the period October 1, 2007 to October 1, 2008. It increases this amount to 150 megawatts starting October 1, 2008. By law, the resources must have received funding from the Clean Energy Fund and individual projects must be at least one megawatt in size.

EFFECTIVE DATE: Upon passage

PEAKING GENERATION

§ 54: Utility-Owned Peaking Generation

The law required DPUC to issue a request for proposals (RFP) for measures to reduce the costs arising from congestion on the transmission system. Electric companies were allowed to submit proposals, subject to certain conditions that did not apply to non-utility generators, but chose not to do so. DPUC is currently reviewing the proposals it received, which include proposals for new peaking plants (which operate during period of peak demand), baseload plants (those that operate most of the time), and other types of resources. Non-utility generators whose proposals are accepted by DPUC can enter into long-term electric capacity contracts with the electric companies.

Under the bill, if DPUC determines that the state needs peaking generation, it must direct the electric companies to submit proposals to build an amount of peaking generation equal to the amount DPUC approved in the proposals from the non-utility generators. The electric companies can submit bids in proportion to their loads. Their proposals must (1) include the projects' full projected costs and (2) demonstrate that the projects are not subsidized by their affiliates. DPUC can require the companies to submit additional information, which it can use in evaluating the proposals. DPUC can reject proposals that are not in customers' best interests. It must reject those that cost more than the median (average) cost of approved projects.

Electric companies would be allowed to recover their prudently incurred operating and capital costs for approved projects and earn a reasonable rate of return on their equity under traditional rate-making principles. The recovery would be set in an annual contested case at DPUC. DPUC would be required to update the rate of return at least once every four years.

EFFECTIVE DATE: Upon passage

INTEGRATED RESOURCES PLANNING AND RESOURCE PROCUREMENT

§§ 55-57: Integrated Resources Planning

Development. The bill requires the electric companies to develop a triennial comprehensive plan for procuring energy resources. The plan must assess (1) the energy and capacity requirements of the customers for the next three, five, and 10 years; (2) the impact of current and projected environmental standards, including those related to greenhouse gas emissions and the Clean Air Act goals, and how different resources could help achieve those standards and goals; (3) energy security and economic risks associated with potential energy resources; and (4) the estimated lifetime cost and availability of potential energy resources.

Under the plan, resource needs must first be met through all available energy efficiency and demand reduction resources that are cost effective, reliable, and feasible. The plan must specify (1) the total amount of energy and capacity resources needed to meet the requirements of all customers, (2) to what extent demand side measures can cost-effectively meet these needs, (3) needs for generating capacity and transmission and distribution improvements, (4) how developing these resources will reduce and stabilize the costs of electricity to consumers, and (5) how each of the proposed resources should be procured, including the optimal contract periods.

The plan must consider:

1. approaches to maximizing the impact of demand-side measures;

2. the extent to which generation needs can be met by renewable and cogeneration facilities;

3. the impact of regional market incentives;

4. types and locations for generation that would optimize the generation portfolio in the state;

5. fuel types, diversity, availability, firmness of supply and security;

6. environmental impact of the various fuels, including how they affect the state's ability to meet its greenhouse gas emission goals;

7. reliability, peak load and energy forecasts, system contingencies and existing resource availability;

8. import limits and the appropriate reliance on imports;

9. the costs and benefits of options for the ownership of energy resources, including ownership by an electric company; and

10. the impact of the plan on the costs of electric customers, including the effects on rate stability and affordability for low-income customers.

In addition, if the companies determine it is in the best interest of customers, the plan must address how new resources could be integrated into their procurement of power for standard service and last-resort service.

Review by the Connecticut Energy Advisory Board. The companies must submit the plan to a reformulated CEAB. Under current law, CEAB consists of nine members, including six agency heads and one member each appointed by the governor, House speaker, and Senate president pro tempore. The bill drops the DPUC chairperson from the board. It increases the number of gubernatorial appointees by eight and specifies that they represent (1) an environmental organization with knowledge of energy efficiency programs, (2) in-state generators, (3) a consumer advocacy organization, (4) a statewide business association, (5) a chamber of commerce, (6) a statewide manufacturing association, (7) low-income ratepayers, and (8) state residents in general. The bill requires that the legislative appointees be experts on energy issues.

The bill requires CEAB, in consultation with the entity that administers the regional wholesale market and in-state generators, to review and approve the plan within 120 days of receiving it. (The transportation and agriculture commissioners, who are CEAB members, do not participate in this review.) The board may retain a consultant with experience in energy procurement and may consult with the regional independent system operator. CEAB must approve or modify the plan. It must submit the reviewed plan, together with a statement of any unresolved issues, to DPUC.

DPUC must consider the plan in an uncontested docket and give interested parties an opportunity to submit comments on it. Within 120 days after CEAB submits the plan, DPUC must approve, or modify and approve, it.

Implementation of the Plan. DPUC must implement the plan by (1) issuing RFPs to meet specified energy resource needs set forth in the plan or by directing the electric companies to issue such RFPs, (2) directing the electric companies to include additional demand-side contained in the plan into their existing conservation plans for review by the Energy Conservation Board, (3) directing the electric companies to submit proposals for specific transmission or distribution facility improvements or projects identified in the plan, or (4) taking other actions within its authority to implement the plan.

From January 1, 2008 until DPUC implements the plan, is the electric companies must include all available energy efficiency and demand-reduction resources that are cost effective, reliable and feasible in the conservation plans they are required to prepare under existing law.

EFFECTIVE DATE: Upon passage

§ 58: New RFPs for Resources

The bill authorizes DPUC to issue new RFPs based on the results of the integrated resources plan. The RFPs can seek proposals for (1) demand response, efficiency, and load management measures and (2) new, expanded, or repowered generation, which would be paid for on a cost-of-service basis. (Under cost-of-service regulation, DPUC would set the rate for the power produced by a plant so as to allow the plant's owner to recover its prudently incurred capital and operating costs, and earn a reasonable rate of return on its investments.) Proposals made by non-utility generators must include draft contracts, which can run for up to 15 years. The draft contracts for all types of non-utility generation must include all of the capacity rights associated with the proposed generating plants. Proposals for new baseload and intermediate generating plants must also include the energy the plants would produce. The draft contracts must provide for compensation to be made on a cost-of-service basis.

As is the case under the current RFP, (1) DPUC can retain a consultant to help it develop the new RFPs and evaluate proposals, (2) the cost of the consultants are recovered through the congestion charge on electric bills, and (3) It must publish the RFPs in one or more newspapers and post them on its website.

DPUC must evaluate the proposals made under the new RFPs based on: consistency with environmental sustainability, reduction and stabilization of rates, fuel diversity, and reduction or minimization of greenhouse gas emissions. DPUC can only approve proposals that are in customers' long-term interests. It must make all of the proposals available to the public six months after accepting or rejecting them.

Electric companies must enter into contracts with the non-utility developers of projects selected under the new RFPs, and either party can ask DPUC to mediate disputes. The contracts require DPUC approval, must contain terms that mitigate long-term risks to customers, and cannot run for more than 15 years. Winning proposals are eligible for expedited siting, under certain circumstances.

EFFECTIVE DATE: Upon passage

§ 59: DPUC Proceeding if New RFPs do not Meet Demands Identified in the Plan

On or after July 1, 2009, if DPUC does not receive and approve proposals that cover the needs identified in the integrated resources plan, it must conduct a needs assessment as a contested case to identify the total amount and type of resources still needed. If it determines that there are unaddressed needs, it must conduct a cost/benefit analysis of having the state serve as the “builder of last resort.” It may also issue a new RFP to electric companies to have them meet this need by building new generation or demand-response measures, subject to the same conditions as the new RFPs described above. If approved, the companies would be compensated on a cost-of-service basis.

Effective date: July 1, 2007.

ENERGY ASSISTANCE

§ 78: Connecticut Energy Assistance Program

The bill requires the DSS commissioner to maintain the increases in benefits under the Connecticut Energy Assistance Program (CEAP) the legislature adopted in 2005 when developing the CEAP plan for the 2007/2008 heating season, which will be submitted for legislative approval in the fall of 2007.

EFFECTIVE DATE: July 1, 2007

§ 79: DSS Discounted Fuel Purchasing Program

The bill broadens requirements for DSS to buy fuel at discounted prices for CEAP participants. It expands the requirement to include all deliverable fuels, rather than just heating oil. It also requires that DSS ensure that all fuel assistance recipients are treated the same as other similarly situated customers and that fuel dealers do not discriminate against them under their standard payment, delivery, service, or other similar plans.

DSS must take advantage of programs offered by dealers that reduce the cost of the fuel, such as fixed price, capped price, pre-purchase or summer-fill options, thereby reducing CEAP's program cost and making the maximum use of its revenues. DSS must ensure that all agencies administering CEAP make payments to participating dealers in advance of the delivery of energy where the dealer provides price-management strategies that require advance payments.

The bill requires the community action agencies that administer CEAP to provide DSS with pricing information from participating dealers. The information must include (1) the statewide or regional retail price per unit of fuel, (2) the reduced price per unit paid by the state, (3) the number of units delivered to the state under the program, and (4) the total savings under the program due to the purchase of deliverable fuel using the dealers' price-management strategies.

The bill also requires the community action agencies that administer fuel assistance programs to begin accepting applications by September 1 annually.

EFFECTIVE DATE: July 1, 2007

§ 80: Winter Shut-Off Moratorium Extension

The bill extends, from April 15 to May 1, the end date of the annual winter moratorium, during which electric and gas utilities cannot terminate service to hardship customers who cannot pay their utility bills. (By law, the start date is November 1.) Hardship customers include households (1) whose only income is social security or unemployment benefits, (2) that have a seriously ill household member, and (3) with incomes up to 125% of the federal poverty level, among others. The bill also makes related changes.

EFFECTIVE DATE: October 1, 2007

§ 97: Operation Fuel

Under current law, electric and gas companies must allow their customers to donate $1 per billing cycle to Operation Fuel, which provides assistance to people ineligible for the Connecticut Energy Assistance Program. The bill requires the companies to (1) offer $1, $2, $3, or other donation options; (2) allow customers who are billed or pay electronically to participate; and (3) extends these provisions to municipal electric and gas utilities. It also requires Operation Fuel, Inc. (the group that administers the program) to provide fundraising inserts to fuel oil dealers who choose to participate in the program. It requires the utilities and the participating fuel oil dealers to coordinate their promotion of the program.

EFFECTIVE DATE: Upon passage

OTHER PROVISIONS

§ 52: Solar Contractor Licensing

The bill exempts from DCP licensure requirements employees and subcontractors of licensed solar contractors engaged in solar technology installations.

EFFECTIVE DATE: Upon passage

§ 61: “Net energy” Evaluation of Proposed Power Plants

By law, when an application is made to the Siting Council to build a new power plant, CEAB must solicit and evaluate alternative proposals. The bill requires CEAB also conduct a “net energy analysis” of each plant larger than 65 megawatts. This analysis must determine the ratio between (1) the amount of energy the plant will produce over its lifetime to (2) the amount of energy used in plant construction and maintenance and the total fuel cycle, both over the plant's lifetime.

EFFECTIVE DATE: July 1, 2007

§§ 64, 65: Expedited DEP Permitting of New Generation

The bill requires DEP to expedite the permitting of distributed resources by issuing a final decision within 120 days of the application date. The requirement applies to applications filed between January 1, 2007 and January 1, 2010.

The bill requires DEP to enter into a memorandum of understanding with DPUC by September 1, 2007 regarding the air emissions permit provisions governing the operation of emergency generators. By February 1, 2008, the agency commissioners must report to the Energy and Technology and Environment Committees on the understanding. They also must report to the committees when they modify the agreement.

EFFECTIVE DATE: Upon passage

§ 66: Cost Sharing for Relocating Electric Utility Facilities

PA 05-210 relieved the Department of Transportation of cost sharing requirements when electric transmission and trunkline facilities had to be relocated in highway rights-of-way. This bill limits these changes to facilities owned by an electric company.

EFFECTIVE DATE: Upon passage

§ 67: Domestic Electric Companies

The bill reinstates a provision repealed by PA 05-1, June Special Session, on the charters of “domestic electric companies.”

EFFECTIVE DATE: July 1, 2007

§ 68: DPUC Commissioners

The bill requires that anytime a new DPUC commissioner is appointed, at least one of the five commissioners must have experience in utility customer advocacy.

EFFECTIVE DATE: October 1, 2007

§§ 69-72: -Various DPUC and CEAB studies

EFFECTIVE DATE: Various

§ 74: Purchased Gas Adjustment and Energy Adjustment Clauses

Under current law, DPUC can approve mechanisms that adjust natural gas and electric rates to reflect differences between projected and actual sales. The bill allow these adjustment clauses to be based on changes in total retail sales or per customer sales that specifically and directly result from energy efficiency and related initiatives implemented by the company. It allows DPUC to adopt such provisions on or after the company's next rate case.

EFFECTIVE DATE: July 1, 2007

§§76, 77: Technical and conforming

EFFECTIVE DATE: July 1, 2007

§§ 89, 90: Restrictions on Eminent Domain for Energy Facilities

The bill bars municipalities, other than those with municipal electric utilities), from condemning or restricting the operation of any existing energy facility (e.g., power plants, transmission lines, and fuel storage facilities) that DPUC determines is a critical part of the state's infrastructure, without getting the written approval of DPUC, OPM, CEAB, and the Siting Council stating that this would not harm the state or region's ability to provide a particular energy resource to its citizens.

EFFECTIVE DATE: Upon passage

BACKGROUND

Related Bills

sSB 1373 reported favorably by the Energy and Technology Committee, has several similar provisions. These include provisions restoring funding for the conservation and clean energy funds, tax exemptions for renewable energy systems and energy efficiency goods, and $30 million in bonding for renewable energy projects in state buildings.

SB 1374 reported favorably by the Energy and Technology Committee, has similar green building and energy assistance provisions

COMMITTEE ACTION

Energy and Technology Committee

Joint Favorable Substitute

¹ The CL& M Fund's fiscal year begins January 1.

² The standards are contained in the 2004 edition of the ASHRAE standard 90.1.

³ The state normally provides between 20% and 80% of the construction cost for school building projects and magnet schools receive 95% reimbursement.

⁴ The fringe benefit costs for state employees are budgeted centrally in the Miscellaneous Accounts administered by the Comptroller. The estimated first year fringe benefit rate for a new employee as a percentage of average salary is 25.8%, effective July 1, 2006. The first year fringe benefit costs for new positions do not include pension costs. The state's pension contribution is based upon the prior year's certification by the actuary for the State Employees Retirement System (SERS). The SERS 2006-07 fringe benefit rate is 34.4%, which when combined with the non pension fringe benefit rate totals 60.2%.

⁵ According to fueleconomy.com there are four 2007 models with fuel efficiencies of at least 40 miles per gallon: (1) the Honda Civic (automatic 5-speed), (2) the Toyota Yaris (manual 5-speed), (3) the Toyota Corolla (manual 5-speed), and (4) the Mini Cooper (manual, 6 speed). Therefore, the estimates assume only a small number of overall new vehicles sales will be affected.

⁶ The Office of Policy and Management was authorized to operate the HEARTH program during FY 06. DSS expended $205,744 for HEARTH benefits for CEAP households in that year. The program was not authorized in FY 07.

⁷ This estimate includes refrigerators, cloths washers, air conditioners, and dishwashers.

⁸ The bonds will be defeased because they are not callable.