You asked for a section analysis of AAC Connecticut's Energy Policy HB 7097).

§ 1: Connecticut Energy Procurement Authority, Board of Directors

The bill establishes the Connecticut Electricity Procurement Authority (CEPA) and specifies the membership of its board. The board's directors include the Social Services and Environmental Protection commissioners, the secretary of the Office of Policy and Management (OPM), and the Consumer Counsel or their respective designees. However, the designees cannot exercise the powers of the directors. In addition, the governor, Senate president pro tempore, and House speaker each appoint one director. The appointed members serve four year terms, and any appointed member who misses three consecutive meetings or half of the board's meeting in a calendar year is considered to have resigned. Directors can hold outside employment, subject to laws governing conflicts of interest.

The governor must appoint one director as the board's chairperson, with the approval of the House and Senate. The chairperson, with the board's approval, can appoint a president of the authority who is an authority employee who is paid a salary prescribed by the directors. The president must supervise the authority's administrative affairs and technical activities of the authority in accordance with the board's directives.

§ 2 Authority's Purposes

The authority's purposes are to (1) finance the expansion or purchase of in-state resource recovery facilities, (2) purchase electricity from these facilities, (3) purchase electricity from renewable energy sources, and (4) assume existing power contracts to facilitate these tasks. These are considered public purposes and the bill requires that the authority's powers be construed liberally. The authority must work expeditiously to provide service to its customers, as described below, by January 1, 2008.

§ 3: Meetings

The board must hold its first meeting by May 1, 2007 and must meet at least monthly. The board must report annually to the legislature and governor. The reports must at least include: a listing of the contracts entered into for procuring electricity, a listing of the outstanding issues of the authority's notes and bonds and their payment status, a budget showing the authority's administrative expenses, and a description of the authority's revenues from all sources and of the redistribution of any surplus revenues.

§ 4: Public Information

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

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

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

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

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

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

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

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

§§ 5-7: Authority's Powers

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

1. employing a staff;

2. entering into contracts;

3. conducting hearings, examinations, and investigations;

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

5. charging reasonable fees for its services; and

6. buying, leasing, and renting real and personal property.

§ 8: Taxation

The authority's property and revenue from its bonds is exempt from state and local taxes, other than estate and succession taxes.

§ 9-12: Bonding

The bill allows the authority to issue revenue bonds with the approval of the state treasurer. The bonds can have terms of up to 40 years and are subject to terms generally applicable to revenue bonds. Governmental agencies and financial institutions may invest in the bonds.

The bonds are not a debt or liability of the state or municipality, and must state this on their face. However, the bill allows the authority to establish special capital reserve funds (SCRFs) to back the bonds. The authority can pay into these SCRFs (1) any moneys appropriated and made available by the state for these funds, (2) any proceeds of the sale of notes or bonds, as provided in the resolution authorizing the issuance of the bonds, and (3) any other moneys that may be made available to the authority from other sources. The authority can provide that money in the SCRFs may not be withdrawn, if this would reduce the amount in the funds to less than the maximum amount of principal and interest becoming due in the next calendar year on the outstanding bonds of the authority that are secured by the SCRF. (This is called the required minimum capital reserve. ) By December first, annually, the bill deems there will be appropriated from the General Fund enough money, as certified by the chairman of the authority to the OPM secretary and the state treasurer, that is needed to restore each SCRF to the fund's required minimum capital reserve, and such amounts must be allotted and paid to the authority.

Under the bill, the state pledges to the authority's bondholders and with parties who enter into contracts with it or its successor agency that the state will not limit or alter the authority's rights until its obligations are fully discharged and the authority fully performs its contracts.

§ 13-17: Electric Service to Seniors and the Disabled

The bill allows any electric customer who is (1) 62 or older or (2) physically disabled or blind to choose, in September of each year, the authority as her electric supplier. Electric companies must continue to provide metering, billing, and collection services for customers who participate in this program, as they already must for customers of competitive suppliers. The bill subjects CEPA to existing Department of Public Utility Control (DPUC) regulations regarding the billing relationship between electric companies and competitive suppliers. The bill allows the electric company or competitive supplier who currently serves a customer who chooses to participate in the CEPA program to charge its actual costs in reading the customer's meter and changing its billing records.

The bill requires DPUC to disseminate information about CEPA. DPUC must do so in consultation with the Office of Consumer Counsel, the Department of Social Services and the council that advises DPUC on consumer education. The information program must require electric companies to distribute information about the authority to any new customer and to existing customers beginning August 1, 2007, and annually thereafter. DPUC must develop this information, which must at least include the authority's telephone number and Internet address and pricing information, to the extent DPUC determines feasible. DPUC must post this information in a conspicuous place on its web site and provide electronic links to the authority's web site. DPUC must update the information on its web site at least quarterly.

§§ 18, 19: Summer Conservation Incentive Program

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

Electric companies must issue credits to customers who successfully participate in the program. The credit is 5% of the summer 2007 bill for customers who use 10% less electricity than they used in summer 2006. Customers who reduce their summer consumption by 15% get a 10% credit and those who reduce their consumption by 20% get a 20% credit. The credit would appear on the customer's electric bill that covers October 1, 2007.

DPUC must conduct an uncontested docket by March 1, 2007 to design the program, which must be funded by the systems benefits charge on electric bills.

§§ 20, 21: Operation Fuel

The bill requires Operation Fuel, Incorporated, to establish a one-time “clean-slate” program during calendar year 2007 to target low-income persons with high arrearages. (Operation Fuel, Incorporated is a non-profit organization that provides energy assistance to households who are ineligible for the Connecticut Energy Assistance Program. ) The program must provide a one-time grant based on the recipient's income and arrearage amount. Grants can only apply to arrearages that are up to 24 months old and cannot exceed $ 1,000. The program must also incorporate case management services, including budget counseling and assistance with utility payment programs.

The bill also allows Operation Fuel, Inc. to provide assistance to households on a year-round basis, rather just during the winter.

§ 22: Renewable Portfolio Standard

By law, electric companies and competitive suppliers must get part of their electricity from renewable sources under the renewable portfolio standard (RPS). They can meet this requirement by buying the power itself from generators or by buying renewable energy certificates (RECs), which are traded separately on the regional wholesale electric market.

The bill establishes another way for electric companies to comply with the RPS, starting January 1, 2008. Under this option, electric companies can procure RECs from renewable energy sources that represent 50% or more of the amount required under the RPS. The companies may enter into long-term contracts for up to 15 years to procure the RECs associated with power delivered over the term of the contract. The power associated with these RECs counts against the RPS, for the periods during which the power will be produced.

DPUC must conduct a contested case to establish the procedures for procuring these RECs and recovering their cost from electric company customers. The procedures must include: (1) how to procure the RECs and how to credit them against the RPS; (2) the terms and conditions, including reasonable performance assurance commitments, imposed on suppliers of the RECs; and (3) compensation for the electric companies for participating in this option, which cannot exceed one mill per kilowatt hour of output associated with the RECs purchased under this provision. An electric company's compensation is included when DPUC determines whether it is earning more than DPUC allows.

§ 23: Alternative Fuel Vehicles in the State Fleet

Under current state and federal law, 75% of the cars or light duty trucks purchased by the state must be alternative-fueled vehicles. The bill increases this proportion to 100%. By law, alternative fuel vehicles include those that can operate on ethanol, natural gas, or electricity. Under current law, hybrid gas-electric vehicles do not count towards meeting the alternative fuel requirement.

§ 24: Appropriations

The bill appropriates from the General Fund in FY 07:

1. $ 2. 5 million to OPM to implement the clean slate program,

2. $ 1. 75 million to OPM for the purpose of expanding Operation Fuel, Incorporated, and

3. $ 750,000 for Operation Fuel, Incorporated's, infrastructure, technology support, and case management services.

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