Advocates of comprehensive energy legislation designed to simultaneously raise and lower electricity bills are gearing up for Round 2 in 2011 as they aim to finally get the matter signed into law.
State Sen. John Fonfara, D-Hartford and co-chair of the Connecticut General Assembly’s Energy and Technology Committee, said he will resubmit the omnibus energy bill that passed in the closing moments of this year’s legislative session only to be vetoed by Gov. M. Jodi Rell.
Fonfara said he’s hopeful Dan Malloy the governor will fulfill the promises of Dan Malloy the candidate and sign the Energy Bill into law if the legislation’s backers have the same success during the session.
Fonfara — who co-authored the bill with State Rep. Vickie Nardello, D-Prospect — said the 2011 version will have only minor modifications from the measure that passed last year.
The Energy Bill still will call for reorganization of all the state’s energy efforts under a newly created Connecticut Energy & Technology Authority, which will replace some or all of the duties of the Department of Public Utility Control. The new agency will be charged with lowering statewide electricity rates by 15 percent, although the bill does not lay out a specific plan for how that will be accomplished.
While calling for rate reduction, the bill will initiate new programs that will add to customers’ bills, such as a solar credit program to revitalize the industry in the state, increased conservation efforts in underserved urban areas, and financing for energy efficient boilers and furnaces. The legislation also calls for appliances sold in the state to meet Energy Star standards.
One change from the 2010 bill will be the state’s relationship with ISO New England, which manages the regional power grid. The 2010 bill called for an investigation into ISO’s pricing practices with the possibility of Connecticut opting out of the system; the 2011 bill would examine ISO practices and report to the U.S. Congress in order to get the Federal Regulatory Commission to change the way ISO operates, Fonfara said.
“The bill is schizophrenic in some ways,” Fonfara acknowledged.
Having legislation that puts charges on utility bills for initiatives such as revitalization of the solar industry while calling for a reduction in electricity rates might seem counterintuitive; but the steps are in alignment with the Energy Bill’s twin goals of Connecticut having a reasonable cost of energy while building a robust economy based on technology and energy.
The 15-percent cut in electricity rates is not a wholesale slashing, race-to-the-bottom dicing of energy costs, Fonfara said, but a comprehensive look at possible cutbacks in the system and tools to take advantage of better pricing, such as shorter procurement periods so power isn’t purchased in long-term blocks.
States with the lowest electricity rates tend to rely on coal and hydro for their power, which can be ruinous for the environment, and Connecticut doesn’t want that, Fonfara said. Electricity rates are high here for certain reasons; and some of them are good reasons, such as having a cleaner energy profile and prohibiting customer shutoffs in winter.
“We made a commitment to have cleaner air and to not pollute, and that costs money,” Fonfara said.
Connecticut has a renewable portfolio standard that calls for 20 percent of its electricity to come from sources such as wind, solar and landfill gas by 2020. While the standard allows for the renewable energy to be imported from other states, Fonfara wants to see the majority come from inside Connecticut because that will grow innovation, investment, companies and jobs.
The Energy Bill addresses those aspirations, and the goals are something worth paying for, Fonfara said.
While Connecticut has the second highest electricity rates in the nation behind Hawaii, rates only constitute a portion of a ratepayer’s bill. Other items such as transmission, taxes and surcharges add to the costs. The biggest factor contributing to the cost of bills is how much electricity a ratepayer uses.
The Connecticut Business & Industry Association, which opposed the 2010 Energy Bill, wants the focus to be on lowering the overall cost of bills because that would encourage companies to stay and grow in Connecticut, said Kevin Hennessy, CBIA assistant counsel. Rising electricity costs would inhibit state economic growth.
The state’s many energy efficiency programs administered through the Connecticut Energy Efficiency Fund present real cost savings to businesses because they lower energy consumption. Helping businesses tap into these funds has a positive impact on the entire state, Hennessy said.
These programs are more far-reaching than ramping up the solar industry by providing for a $1.4 billion solar credit program that pays more for energy produced from solar power, Hennessy said.
“At what cost do we want to implement a solar program?” Hennessy asked. “The economy is already struggling … We are not sure now is the time to ramp up solar.”
Now is precisely the time to ramp to the solar industry and grow green jobs in the state, said Michael Trahan, executive director for the industry group Solar Connecticut Inc. A credit program would breathe new life into solar industry, reversing the trend where the state’s solar companies ship off their talent and expertise to nearby states — such as Massachusetts and New Jersey — with friendlier government programs.
“If we get a bill passed in the springtime, the installers here will keep their people in the new states, but they will hire new people in Connecticut,” Trahan said. “We’re thrilled for the prospect of making something happen.”
More importantly, the Energy Bill provides for more predictability in government funding for the solar industry, which goes toward building a long-term energy policy in Connecticut and giving companies and investors more stability and predictability, Trahan said.
To turn the many provisions of the Energy Bill into law, Fonfara still favors putting out one large piece of legislation instead of handling the various aspects in smaller bills, a piecemeal approach which might be friendlier to the new governor and the other legislators.
With one comprehensive bill, all the provisions will gain widespread support, Fonfara said. With smaller bills, legislators could vote for one provision and against another, which would soften the Energy Bill’s intended long-term implications.
“I’m not intimidated by a big bill,” Fonfara said.
