Connecticut lawmakers target successful energy efficiency program in effort to plug budget hole

Legislators want to plunder efficiency programs to close a budget gap.

A solar-powered home. CREDIT: Pixabay
A solar-powered home. CREDIT: Pixabay

Wesson Energy started life in the oil business 90 years ago. But a decade ago, the Waterbury, Connecticut company started selling products — like smart thermostats and wall insulation — that would cut demand for heating fuel.

“We recognized where the energy future lies, and we are moving with it,” said Jane Bourdeau, who manages the company’s energy efficiency program. “It’s at the expense of our core business, but it’s the right thing to do.”

Wesson’s tack has been good for business. The company has added 50 new jobs to its efficiency operation, in response to high demand from customers. “With every home we go into to do an audit, our goal is to have our customers use less fuel,” Bourdeau said. “We install equipment that — at a minimum — improves energy efficiency by 86 percent.”

Wesson and similar businesses in Connecticut have delivered these services with support from the state’s energy efficiency programs. But these programs face a looming threat from the state government, which is looking to close a budget deficit by slashing funding for energy efficiency.

“If the money from these programs goes away, people are going to be hurt, especially the elderly and low-income, some of whom won’t have heat,” Bourdeau said. “Also, jobs will be lost. We will be laying people off. Right now, I’m trying to figure out how to come up with other income, so I don’t have to get rid of anybody.”

The problem is that Connecticut ratepayers are explicitly paying for these upgrades. Money for state energy efficiency programs comes from a surcharge on electric bills. “[Customers] pay about $11 to $15 a month, based on usage, but have the potential to save as much as $500 to thousands of dollars in their electric bills over the course of several years through the energy efficiency services,” Bourdeau said. “If that goes away, the surcharge, in effect, would become a tax. Customers won’t be getting what they pay for.”

Separately, Connecticut receives money for efficiency from the Regional Greenhouse Gas Initiative (RGGI), a coalition of nine Northeastern states — New York, Massachusetts, Vermont, Rhode Island, New Hampshire, Maine, Maryland, Delaware, and Connecticut. RGGI was created in 2005 as the nation’s first carbon trading market. Member states limit carbon dioxide emissions from power plants by auctioning off pollution permits. Part of the money from the auctions goes back into energy efficiency programs and clean energy projects—or, at least it’s supposed to.

]RGGI states are highlighted in purple. CREDIT: Center for Climate and Energy Solutions
]RGGI states are highlighted in purple. CREDIT: Center for Climate and Energy Solutions

Now, Connecticut lawmakers want to divert $160 million from the state’s energy efficiency programs each year for the next two fiscal years and to take $20 million in RGGI money in fiscal 2019.

“The RGGI cut is terrible but the energy efficiency program cut would be catastrophic,” said Bill Dornbos, Connecticut state director at the Acadia Center, a clean energy advocacy organization.

This is not Connecticut’s first try at raiding the state’s energy efficiency programs program, doing so successfully in 2003 and 2009. “When something like this happens, contractors and vendors leave Connecticut and go to neighboring states that have strong, fully-funded energy efficiency programs, like Massachusetts and Rhode Island,” Dornbos said. “After two years — and there is no certainty that the money will come back then — we will have to rebuild the program structure.”

The proposals are bipartisan: Democrats put forth the RGGI cut, while Republicans recommended diverting money from the energy efficiency programs. Although the state has a Democratic governor, the House Democratic majority narrowed after the last election and the Senate now is evenly split between both parties. The lieutenant governor, a Democrat, holds the tie-breaking vote.

“The Senate Republican proposal is a reflection of the new political dynamic,” Dornbos says. “I think [because of] the power sharing agreement in the Senate, proposals from either side should be taken seriously.”

Other states have used RGGI revenue to help plug general budget shortfalls, New York and New Jersey among them, according to Jordan Stutt, a policy analyst with Acadia. “The RGGI [memorandum of understanding] requires all participating states to use at least 25 percent of their auction revenue for consumer benefit or strategic energy purposes, and [Connecticut’s] proposed sweep of RGGI funds would clearly violate that provision,” he explained.

Peter Kelly-Detwiler, co-founder of Northbridge Energy Partners, an energy consulting firm, calls the Connecticut budget proposals “very short-sighted.” Last year, there were about 12,000 jobs in the state’s energy efficiency sector, according to data from the Connecticut Energy Efficiency Board’s annual legislative report. Many of these jobs, Kelly-Detwiler said, “do not require super highly-skilled individuals, meaning you can train people for them.”

Energy efficiency also pays for itself. Every $1 invested in energy efficiency will save $3.89 in utility bills, according to the Acadia Center. Dornbos said that, over the next two years, the proposed cuts could leave an estimated 24,000 low-income households “without any good solution for how to handle their energy bills.”

“RGGI helps expand customer access to Connecticut’s high-quality energy efficiency programs,” he said. “If we lose RGGI revenue, the energy efficiency programs will have to serve fewer customers. Connecticut will be turning its back on some of the neediest households.”

Bourdeau agreed. “This winter alone, the program allowed us to give new furnaces to at least 50 people who otherwise would not have had heat,” she says. To be sure, the winter of 2016 “wasn’t that bad,” she said. “But 30 degrees with no heat is bad enough.”

Marlene Cimons writes for Nexus Media, a syndicated newswire covering climate, energy, policy, art and culture.