OLR Bill Analysis

sHB 6632

AN ACT CONCERNING ENERGY EFFICIENCY AND THE COORDINATION OF ENERGY EFFICIENCY PROGRAMS.

SUMMARY:

This bill eliminates the Energy Conservation Management Board (ECMB), which oversees electric and gas company conservation programs, the Renewable Energy Investment Board (REIB) which distributes money in the Clean Energy Fund, and the Fuel Oil Conservation Board (FOCB), which administers fuel oil conservation programs. It replaces these boards with the Energy, Efficiency, and Renewable Resources Board (the board), which it creates. Similarly, it transfers to the new board the responsibilities and powers of the Connecticut Municipal Electric Energy Cooperative (CMEEC) with regard to municipal electric utility conservation and renewable energy programs. The bill also eliminates a joint committee of ECMB and REIB. The bill gives the new board several responsibilities that are not assigned to the existing boards, such as facilitating the coordination and integration of energy, conservation, and renewable resources programs to simplify consumer access.

The bill also expands the fuel oil conservation programs to cover other deliverable fuels, such as propane.

The bill extends to the deliverable fuel and municipal electric utility conservation programs provisions regarding program eligibility and evaluation requirements that currently apply to electric and gas company conservation programs. It requires that the deliverable fuel and municipal utility programs be approved by the Department of Public Utility Control (DPUC), as is currently the case with the other conservation and renewable energy programs.

The bill requires the board to report to the Energy and Technology, Environment, and Commerce committees regarding the programs under its jurisdiction. Under current law, the existing boards must report on the programs under their jurisdiction to the Energy and Technology Committee and in some cases to the other committees.

EFFECTIVE DATE: January 1, 2010

§ 1 — AUTHORITY BOARD, RESPONSIBILITIES AND ADMINISTRATION OF DELIVERABLE FUEL PROGRAM

Board

The 22-member board consists of political appointees, industry representatives, and department heads.

Table 1 shows the industry designees and political appointed membership on the new board. In addition, the board consists of the following individuals or their designees: the Office of Policy and Management (OPM) secretary, social services commissioner, consumer counsel, and the executive director of the Legal Assistance Resource Center. Many of the interests represented on the new board are represented on one or more of the existing boards.

Table 1: Appointed Membership

The bill requires all of the appointed members to have expertise in energy, conservation, or renewable resources matters. The appointed members serve for five-year terms and may be reappointed. The board must elect a chairperson and vice-chairperson from among its members annually and adopt bylaws and procedures it deems necessary. Board members are unpaid, but may receive reimbursement for necessary expenses.

Under the bill, representatives of the various energy industries, including CMEEC, may not vote on matters before the board unrelated to their industries; this is current law with regard to the participation of electric and gas company members on the ECMB. The bill also prohibits the industry representatives on the new board from voting on matters regarding the retention and services of expert consultants or program evaluations.

RESPONSIBILITIES

The bill requires the board to:

ADMINISTRATION OF DELIVERABLE FUELS PROGRAMS

The bill requires the new board to administer deliverable fuel conservation programs in much the same way as current law requires FOCB to administer fuel oil conservation programs. As under the current law governing FOCB, the board must establish itself as a 501(c) (3) tax exempt organization. The bill imposes program eligibility and evaluation provisions that are similar to those in current law.

As under current law, the bill funds these programs by the growth in petroleum products tax revenue over FY 06 levels, capped at $ 5 million per year starting in FY 10. Unlike current law regarding FOCB, the board's decisions are subject to DPUC review and approval and the board is subject to the single state audit law.

The bill requires the board, by January 1, 2010 and after issuing a request for proposals (RFP), to select an entity to administer and implement conservation and energy efficiency programs for deliverable fuel customers. The board must enter into a contract up to three years. At the end of the contract, the board may renew the contract if it finds that the administrator's performance has been satisfactory or issue a new RFP. Current law has parallel provisions regarding FOCB.

As under current law, the program administrator must adopt a comprehensive plan for spending funds to implement cost-effective conservation programs and market transformation initiatives for residential, commercial, and industrial deliverable fuel customers. In addition to the components of the current fuel oil plan, the bill requires the deliverable fuels plan to provide for reimbursement for services provided by including a management fee and disbursements from the deliverable fuel conservation account to develop and carry out the plan.

Under current law, in reviewing the fuel oil conservation plan, the FOCB must examine opportunities to offer joint programs that save more than one fuel or to coordinate programs targeted at saving more than one fuel. There is a parallel provision regarding the ECMB's review of electric and gas company plans. The bill extends this provision to apply to all of the plans reviewed by the new board. And it specifies that the board must conduct this review of joint programs to ensure available conservation and renewable resources are integrated as much as possible to simplify consumer access to integrated services of all available resources, minimize expenses in administering each program, and reduce the environmental impacts and security risks of energy in the state.

The board must assist the program administrator in developing and implementing the plan. The board must accept, modify or reject each program in the plan before the administrator submits it to DPUC for approval. By October 1^st annually, the administrator must submit the plan to DPUC, which must approve, modify, or reject the plan. The administrator must spend available funds in conformity with the approved plan.

The bill requires the new board to enter into a grant contract with the comptroller setting for the conditions under which funds from the deliverable fuel conservation account are expended. Under current law, disbursements from the fuel oil account must be authorized by the FOCB; the bill instead requires DPUC authorization from the successor deliverable fuels account.

Under current law, the attorney general must select a third party to audit the fuel oil conservation account. The bill has a similar requirement with regard to the successor account, but also requires that (1) the new board undergo the single state audit and (2) the auditor's report to the legislature determine whether the board's activities comport with state laws and generally accepted practices governing nonprofit organization operations. Under current law, the report goes to the Energy and Technology and Environment committees. The bill requires that the report also go to the Commerce Committee.

§ 2 — MUNICIPAL UTILITY PROGRAMS

The bill allows the fund that pays for municipal electric utility conservation and renewable energy programs to receive (1) any amount required by law to be deposited into the fund and (2) any federal or other funds as may become available to the state for conservation and load management and renewable resources.

Under current law, disbursements from the fund must be made under a comprehensive plan prepared by CMEEC. The bill makes the same type of programs that are currently eligible for the other conservation plans eligible for the municipal utility plan and subjects these programs to the same cost-effectiveness tests. It requires the board to (1) help CMEEC develop and implement the plan and (2) accept, modify, or reject each program in the plan before submitting the plan to DPUC for its approval. It requires the board to submit the plan to DPUC by October 1^st annually and requires DPUC to approve, reject, or modify it.

§ 3 — GAS CONSERVATION

The bill transfers to the new board the ECMB's powers and responsibilities regarding gas company conservation planning and program review.

The bill requires that copies of the gas companies' five-year reports of loads and resources go to the Environment and Commerce committees in addition to the entities that currently get the report. It requires that the annual report on program cost-effectiveness go to the Commerce Committee in addition to its current recipients and delays the deadline for submitting the report from January 1^st to March 1^st annually.

§ 4 — ELECTRIC CONSERVATION

The bill transfers to the board the ECMB's powers and responsibilities regarding electric company conservation planning and program review. It allows the Energy Conservation and Load Management Fund, which pays for electric company conservation programs, to (1) receive any amount required by law to be deposited into it and (2) receive any federal or other funds as may become available to the state for conservation and load management and renewable resources.

The bill requires each electric company, by October 1^st annually, to submit to the DPUC a conservation plan to implement cost-effective energy conservation programs and market transformation initiatives.

Under current law, the electric company conservation plans must provide for expenditures by ECMB to retain consultants and for reasonable administrative costs. The bill transfers this responsibility to the board and limits these costs to 5% of the plan's cost, rather than 5% of the electric bill surcharge that pays for the programs.

The bill requires that the annual report that goes to the legislature cover program funding rather than fund balances. It also requires that the report go to the Commerce Committee as well as its current recipients.

The bill eliminates a requirement that ECMB by December 31^st every five years, evaluate the performance of the programs and activities supported by the fund and report to the Energy and Technology Committee. Under current law, the next report is due in 2011.

§ 5 — RENEWABLE ENERGY

Under current law, Connecticut Innovations, Incorporated, may spend money in the Clean Energy Fund upon authorization of the REIB. The bill instead requires the new board to act on matters related to the fund, including development of a comprehensive plan and expenditure of funds. It requires the board, by October 1^st annually, to submit to DPUC a renewable resources plan for DPUC approval.

The bill requires that the plan ensure available conservation and renewable resources programs are integrated to the extent practicable to simplify consumer access to integrated services of all available resources, minimize expenses in the administration of each program and reduce environmental impacts and security risks of energy in the state. Any costs for joint programs must be allocated equitably among the programs. The bill requires DPUC to approve, modify, or reject the comprehensive plan.

Under current law, REIB must make a draft of its plan available for public comment for at least 30 days. The bill requires that the board do this at least once every 10 years. The bill requires the board to submit a copy of its plan to the Environment Committee as well as its current recipients.

The bill eliminates a requirement that REIB issue an annual report to DPUC reviewing the activities of the Clean Energy Fund and provide a copy of the report to the Energy and Technology and Commerce committees and the Office of Consumer Counsel. Instead, it requires the board to report to the two committees and the Commerce Committee, by March 1^st annually, on funding and spending on renewable resources programs in the prior year. The bill also eliminates a requirement that REIB, by December 31^st every five years, evaluate the performance of the programs and activities supported by the fund and report to the Energy and Technology Committee. Under current law, the next report is due in 2011.

The bill instead requires the board by March 1^st annually, to provide a report to the Energy and Technology, Environment, and Commerce committees that documents expenditures and funding for renewable resource programs conducted in the previous year.

§ 6 — ENERGY ASSISTANCE PLAN

By law, the DSS commissioner must, by August 1st annually, submit a Connecticut Energy Assistance Program plan to the Energy and Technology, Human Services, and Appropriations committees. The bill requires this plan to include a description of DSS' system for (1) identifying households to which it provides cash, medical, or food assistance who may be eligible for energy conservation assistance; (2) obtaining permission from these households to transmit information regarding them to the conservation programs to facilitate provision of available conservation resources, and (3) systematically transmitting household information to the conservation programs when permission has been obtained. The system must be part of DSS's application and periodic redetermination eligibility procedures. It must be developed in consultation with the board.

The bill also requires the DSS plan to identify the number of households to whom it provides cash, medical, or food assistance.

§ 7 — WEBSITE

The bill requires the new board to establish links on its web sites to the Energy Star program or successor program that promotes energy efficiency.

§ 8 — DPUC CONSULTATION

The bill requires DPUC to consult with the board, rather than with ECMB, in (1) establishing a statewide energy efficiency and outreach marketing campaign and (2) developing a real-time energy report for daily use by television and other media.

§§ 9 AND 10 — CONFORMING CHANGE

This bill makes a conforming change necessitated by the establishment of the new board.

§ 11 — REPEALERS

The bill repeals provisions regarding the FOCB and a reporting requirement for municipal electric utility conservation and renewable energy programs.

COMMITTEE ACTION

Energy and Technology Committee

Joint Favorable