File No. 177

House of Representatives, March 28, 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 PAY AS YOU SAVE AND ENERGY EFFICIENCY RECOMMENDATIONS.

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

Section 1. (NEW) (Effective July 1, 2007) (a) On or before October 1, 2007, the Energy Conservation Management Board, established pursuant to section 16-245m of the general statutes, in consultation with the electric distribution and gas companies, shall develop and estimate the cost of a comprehensive residential conservation program, including, but not limited to, the following features: (1) An audit identifying appropriate conservation measures applicable to a utility customer's dwelling unit, whether owned or rented by the customer, prioritizing measures for cost-effectiveness and reductions in peak electricity demand; (2) a system that prioritizes customers to be assisted at least in part by the customer's consent to installation of those measures that are the most cost-effective and reduce peak electricity demand; (3) a system of oversight that advises and assists a customer in obtaining landlord authority where needed for installation of cost-effective measures and assists a customer in accessing incentives, other cost savings and financing for cost-effective measures and identifying knowledgeable contractors for installation of such measures and ensures successful installation of such measures; and (4) provides financing for conservation measures on the utility bill, to the extent such financing repayment does not exceed the expected life of the measure, and the repayment amount plus the periodic customer bill after installation of conservation measures does not exceed the anticipated periodic bill for utility service without installation of such conservation measures, and authorizes disconnection for nonpayment by the customer of any financing repayment amount and assignment of repayment obligations to subsequent owners or tenants of the dwelling unit.

(b) On or before February 1, 2008, the Energy Conservation Management Board shall provide a report to the joint standing committees of the General Assembly having cognizance of matters relating to energy and the environment regarding development and the estimated cost of a comprehensive residential conservation program as defined in subsection (a) of this section. Nothing herein shall preclude development and implementation of conservation programs with features described in subsection (a) of this section prior to provision of said report, provided such programs have been approved by the Department of Public Utility Control.

Sec. 2. Subsection (c) of section 16-245n of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(c) There is hereby created a Renewable Energy Investment Fund which shall be administered by Connecticut Innovations, Incorporated. The fund may receive any amount required by law to be deposited into the fund and may receive any federal funds as may become available to the state for renewable energy investments. Connecticut Innovations, Incorporated, may use any amount in said fund for expenditures which promote investment in renewable energy sources in accordance with a comprehensive plan developed by it to foster the growth, development and commercialization of renewable energy sources, related enterprises and stimulate demand for renewable energy and deployment of renewable energy sources which serve end use customers in this state and for the further purpose of supporting operational demonstration projects for advanced technologies that reduce energy utilization from traditional sources. Such expenditures may include, but not be limited to, grants, direct or equity investments, contracts or other actions which support research, development, manufacture, commercialization, deployment and installation of renewable energy technologies, and actions which expand the expertise of individuals, businesses and lending institutions with regard to renewable energy technologies.

Sec. 3. (Effective July 1, 2007) The Energy Conservation Management Board, established pursuant to section 16-245m of the general statutes, in consultation with the Department of Education, shall conduct a study to determine the feasibility of providing compact fluorescent light bulbs at low or no cost to schools in the state for the purpose of a state-wide school fundraiser. The board shall report the findings of said study to the joint standing committees of the General Assembly having cognizance of matters relating to energy and education on or before February 1, 2008.

Sec. 4. (Effective July 1, 2007) On or before August 1, 2007, the Energy Conservation Management Board, established pursuant to section 16-245m of the general statutes, shall contract with an independent, third party to conduct an assessment of Connecticut's conservation and energy efficiency potential. Such study shall be considered an update to a similar study conducted by a third party in 2004. Not later than six months after the commencement of the study pursuant to this section, the board shall present the results of such study to the joint standing committee of the General Assembly having cognizance of matters relating to energy.

Sec. 5. (NEW) (Effective from passage) The Department of Public Utility Control shall develop recommendations for implementation of a daily energy report program, which shall commence in the summer of 2008 and continue annually thereafter. Said program shall include, but not be limited to, (1) making such reports available through various media sources throughout the summer months each year, (2) producing such reports in a consumer-friendly fashion, and (3) developing a plan to promote and inform the public regarding such reports. The department shall report such recommendations to the joint standing committee of the General Assembly having cognizance of matters relating to energy not later than February 1, 2008.

Sec. 6. (NEW) (Effective July 1, 2007) (a) The Energy Conservation Management Board, established pursuant to section 16-245m of the general statutes, shall establish a plan to (1) reach zero per cent load growth by the year 2012, and (2) reduce the state's per capita load consumption to that of the lower of California or New York by the year 2020.

(b) On or before January 1, 2008, and annually thereafter, the board shall report on the progress of achieving, meeting or exceeding the goals set forth in the plan established pursuant to subsection (a) of this section to the Connecticut Energy Advisory Board, established pursuant to section 16a-3 of the general statutes, for comparison with and possible inclusion in any plan for the procurement of energy resources submitted to such Connecticut Energy Advisory Board by the electric distribution companies.

Sec. 7. Subsection (a) of section 16-243q of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):

(a) On and after January 1, 2007, each electric distribution company providing standard service pursuant to section 16-244c and each electric supplier as defined in section 16-1 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. 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. 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. 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. On and after January 1, 2011, not less than five 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. On and after January 1, 2012, not less than six 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. Electric power obtained from customer-side distributed resources that does not meet air quality standards of the Department of Environmental Protection is not eligible for purposes of meeting the percentage standards in this section.

Sec. 8. Subsection (a) of section 16-245a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):

(a) On and after January 1, 2006, an electric supplier and an electric distribution company providing standard service or supplier of last resort service, pursuant to section 16-244c, shall demonstrate 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. 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. 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. 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. 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] four per cent of the total output or services shall be from Class I or Class II renewable energy sources.

Sec. 9. (NEW) (Effective October 1, 2007) On or before January 1, 2008, the Energy Conservation Management Board, established pursuant to section 16-245m of the general statutes, shall design and implement a program to provide cost-effective loans or award cost-effective grants to electric customers billed on a time of use basis for the construction and installation of cost-efficient energy storage units.

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:

Municipal Impact: None

Explanation

The cost, if any, for developing this program cannot be determined at this time.

The bill expands the potential uses 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 Feb. 28, 2007 is $81.7 million.

This bill also requires the Energy Conservation Management Board (ECMB) to submit a plan to the Energy and Technology and Environment Committees by February 1, 2008. The Connecticut Energy Efficiency Fund (CEEF) budget for 2006¹ (which used to be called the Conservation and Load Management Fund (CL&M)) has inflows of approximately $68.6 million and outflows of approximately 71.0 million (outflows exceed inflows, because actual collections which are based on kilowatt sales, were less than projected).

There could be an effect on the state and municipalities as ratepayers, the extent to which cannot be determined at this time.

The Out Years

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



OLR Bill Analysis

sHB 7309

AN ACT CONCERNING PAY AS YOU SAVE AND ENERGY EFFICIENCY RECOMMENDATIONS.

SUMMARY:

This bill requires the Energy Conservation Management Board (ECMB) to develop and estimate the cost of a comprehensive residential conservation program. ECMB must do this by October 1, 2007 in consultation with the electric and gas companies. The bill specifies the components of the program. It requires ECMB to report to the Energy and Technology and Environment committees by February 1, 2008 regarding the program's development and estimated cost. The bill does not preclude the development and implementation of similar conservation programs before this date, so long as the Department of Public Utility Control (DPUC) approves them.

The bill requires ECMB to undertake various other energy efficiency initiatives.

The bill requires DPUC to develop recommendations for a daily energy report program, specifies the program content, and requires DPUC to report its recommendations to the Energy and Technology Committee by February 1, 2008.

The bill increases the proportion of the power bought by electric companies and competitive electric suppliers that must come from renewable resources under the renewable portfolio standard. It also allows the Clean Energy Fund to support demonstration projects for advanced technology that reduce energy use from traditional sources.

EFFECTIVE DATE: July 1, 2007, except the Clean Energy Fund and DPUC provisions are effective upon passage, and the ECMB provision addressing time-of-use rates take effect October 1, 2007.

COMPONENTS OF RESIDENTIAL CONSERVATION PROGRAM

The bill requires the conservation program ECMB must develop to have the following components:

1. an audit identifying appropriate conservation measures applicable to a utility customer's house or apartment ranking measures for cost-effectiveness and reductions in peak electricity demand and

2. a system that ranks customers to be assisted, at least in part based on their consent to install those measures that are the most cost-effective and reduce peak electricity demand;

The program must have an oversight system that helps a customer (1) obtain a landlord's consent when needed in order to install cost-effective measures; (2) gain access to incentives, other cost savings, and financing for cost-effective measures; and (3) identify knowledgeable contractors to install the measures and ensure their successful installation.

The program must also provide financing for conservation measures on utility bills, for up to the measure's expected life. The repayment amount plus the periodic customer bill after the measures are installed cannot exceed the customer's anticipated bill for utility service if the conservation measures had not been installed. Participants must authorize disconnection for nonpayment of any financing repayment amount and assignment of repayment obligations to the unit's subsequent owners or tenants.

OTHER ECMB RESPONSIBILITIES

The bill requires ECMB to:

1. determine the feasibility, in consultation with the Education Department, of providing compact fluorescent light bulbs at low or no cost to schools as part of a statewide school fundraiser and report its findings to the Education and Energy and Technology committee by February 1, 2008;

2. contract with an independent third party by August 1, 2007 to assess Connecticut's conservation and energy efficiency potential, updating a 2004 study, and by March 1, 2008 present its results to the Energy and Technology Committee;

3. adopt a plan to reach 0% load growth by the year 2012 and reduce the state's per capita load consumption to the lower of California's or New York's by 2020;

4. report to the Connecticut Energy Advisory Board, by January 1, annually, on the progress of achieving, meeting, or exceeding the goals in the state's energy reduction plan (see above) for comparison with and possible inclusion in any energy procurement plan submitted to that board by the electric companies; and

5. design and implement a program, by January 1, 2008, to provide cost-effective loans or grants to electric customers billed on a time-of-use basis for building and installing cost-efficient energy storage units.

DAILY ENERGY REPORT PROGRAM

The bill requires that this program begin in summer 2008 and continue annually thereafter. It requires that the program include (1) making daily energy reports available through various media sources throughout the summer, (2) producing such reports in a consumer-friendly fashion, and (3) developing a plan to promote and inform the public of such reports.

RENEWABLE PORTFOLIO STANDARD

The law requires electric companies to get part of their power from renewable resources. These resources fall into three classes: class I (e.g., solar and wind power), class II (biomass and power from resources recovery facilities) and class III (power from small generators and conservation savings at commercial establishments). By law, the requirements increase in steps over time. Under current law, beginning in 2010, at least 7% of a supplier or electric company's power must come from class I resources and another 3% from either class I or class II resources. The bill increases the latter amount to 4% Under current law, as of 2010, at least 4% of the supplier's or company's power must come from class III resources. The bill increases this amount to 5% in 2011 and 6% in 2012 and thereafter.

BACKGROUND

Related Bills

sSB 1374 has similar provisions on compact fluorescent lights and energy reports. sHB 7098 has similar provisions on the renewable portfolio standard. sSB 1373 has similar class III renewable portfolio standard provisions. All three bills were reported favorably by the Energy and Technology Committee.

COMMITTEE ACTION

Energy and Technology Committee

Joint Favorable Substitute

¹ The CEEF budget is on a calendar year basis.