Energy and Technology Committee

JOINT FAVORABLE REPORT

Bill No.:

SB-1131

Title:

AN ACT CONCERNING RENEWABLE ENERGY AND WEATHERIZATION.

Vote Date:

3/19/2009

Vote Action:

Joint Favorable

PH Date:

3/17/2009

File No.:

SPONSORS OF BILL:

Energy & Technology Committee

REASONS FOR BILL:

This bill promotes renewable energy and weatherization projects. It allows an electric distribution company to implement a Green Community Pilot Program. In addition, it establishes an energy efficient improvement program to provide for development, installation and recovery of energy efficiency equipment and systems at municipal or state facilities.

RESPONSE FROM ADMINISTRATION/AGENCY:

Kevin Delgobbo, Commissioner Department of Public Utility Control: Commissioner Delgobbo explained that once a municipality was selected for the pilot renewable energy and weatherization program the net costs would be recovered through the systems benefits charge (SBC), a one mil per kW charge. This is an annual net cost which would not exceed thirty million dollars in ratepayer funds. Section 2 establishes an energy efficient program to coordinate the efforts of the EDC to improve the energy usage at a customer's facility. The cost for this program is recovered through a customer –specific charge approved by the department in a rate or tariff. This program is designed to provide energy savings from all fuel sources. Accordingly, the committee should be mindful that any ratepayer funds that are utilized to support these initiatives that there should be no cross-subsidization of funds. Section 4 requires a tiered distribution charge for residential customers. The department would like an explanation as to how this would work and questions why department approval of this new rate is not necessary. Section 6 strikes the word residential from the class of customers who can supply the EDC's with credits to meet RPS standards. Mr. Delgobbo, asked why this change is being requested, since in practice it has already been accepting such transactions?

NATURE AND SOURCES OF SUPPORT:

William Leahy, Chief Operating Officer for the Institute for Sustainable Energy (ISE) at Eastern Connecticut State University (ESCU) representing President Elsa Nunez: Mr. Leahy spoke about the Green Community Pilot Program launched in Bridgeport. The city created a public/private partnership comprised of representatives from city agencies, business development organizations, weatherization providers, providers of electricity, oil, natural gas, alternative fuels and renewable energy. They are charged with developing strategies and implementing projects to make the city more sustainable by creating a green business incubator and creating family supporting, career tracking, and sustainable jobs. Financing will come from the CT Energy Efficiency Fund, the CT Clean Energy Fund, the State Energy Program, the State Weatherization Program and the American Recovery and Reinvestment Act. In addition, the institute is working with the faculty of the Connecticut Technical High Schools and some of our community colleges to create a continuum of career training so individuals can enter the workforce as home improvement contractors, energy improvement specialists, cost estimators or weatherization supervisors. Mr. Leahy stated through the Welfare-to-Work/Job Core/Recently Incarcerated Individuals, The Connecticut Technical High Schools, Connecticut's Community Colleges, and the CSUS System are all offering programs to ensure students will have more sustainable Connecticut jobs. Mr. Leahy went on to state that all training should be based on a career track that would encourage the individual to continue their education and training, ultimately leading to private sector employment or small business development.

Richard A. Soderman, The Connecticut Light and Power Company and Yankee Gas Services Company; Mr. Soderman stated a pilot program would be created between a municipality and an electric company to implement the deployment of efficiency and green technologies. CL&P would solicit interest among communities and select one whose energy uses would demonstrate an array of technologies. The electric distribution company would submit its plan to the DPUC for approval. The program would be a good display of whether an intensive deployment of green technologies can be effectively delivered to customers. Benefits of the program include: creation and retention of jobs as a network of vendors and contractors will be required to execute the program and different projects and there would be an immediate energy savings for state and municipal facilities, providing budget relief.

Roger Smith, Campaign Director, Clean Water Action Energy and Technology Committee: Mr. Smith suggested clear goals need to be set for a municipal clean energy pilot program and went on to state the electric utilities lack the ability to administer such a program because they lack experience in gas and oil conservation and he is very concerned about the widespread distrust of the utilities within the community. He urged the legislature to mandate the creation of such a program and establish it as a collaboration of the Clean Energy Fund and Energy Efficiency Fund and fund it with additional funding. By running the program under the banner of public entities the program can better build public trust than could shareholder –owned for-profit utilities.

Mike Brown, Vice President, Legal and Government Affairs at UTC Power: Mr Brown stated the bill focuses primarily on the use of electrical energy and electric distribution companies in the state. He stated the key to reducing overall energy costs is to ensure that both electrical and thermal energy is used to the maximum extent practical and urged the natural gas distribution utilities be included in the equation. Both utilities have information and data that is essential in determining where and how distributed generation can be most effectively and efficiently deployed. It is this integration that drives the upfront costs in retrofitting existing buildings to ensure effective use of both thermal and electrical energy.

NATURE AND SOURCES OF OPPOSITION:

Christopher Phelps, Program Director, Environment Connecticut: Mr. Phelps stated they support the clean energy goals of the bill and efforts to create sustainable solar thermal incentives, but were opposed to the utilities being reimbursed 100% of the costs of the projects in this legislation. This language would allow the utilities to utilize ratepayer

supported Clean Energy Efficiency funds to subsidize their profits from these programs. Mr. Phelps also opposed the language in section 2 of the bill which allows the utilities to use Clean Energy and Energy Efficiency funds to subsidize their profits from the programs created in this section.

Connecticut Clean Energy Fund: The Connecticut Clean Energy Fund does not believe that the Green Community Pilot Program is the best way to develop and deploy renewable energy technologies and the integration of renewable technologies with energy efficient systems and measures. Their concern is that the proposed program would be duplicative of existing successful programs, is not likely to be scalable and would result in inequitable distribution of ratepayer funds.

State of Connecticut Office of Consumer Council, Mary J. Healy: Section 1 of this bill would establish a pilot program in one municipality, implemented by an electric distribution company, to promote energy efficiency and renewable technologies. OCC questions the need for this pilot. It is notable that Connecticut already has an Energy Conservation and Management Board and the Clean Energy Fund. We also have other public and non-profit agencies as well as for-profit businesses to promote renewable energy and/or energy efficiency.

Connecticut Legal Services, Shirley Bergert, Director of Public Benefits Task Force: Ms. Bergert found numerous problems with this bill and made recommendations for changes to include, but not limited to: Section 1- recommended reconciling this section with bill 1135, An Act Concerning Energy Efficiency Investments in Underserved Communities and focus assistance on distressed municipalities which would benefit greatly by the cooperative effort that is envisioned. Ms. Bergert went on to state it is unclear who is targeted for assistance and why the funds are being run through OPM.

Reported by: Maureen O'Reilly

Assistant Clerk

Date: March 25, 2009