Donald Downes
Chair, Department of Public
Utility Control
10 Franklin Square
New Britain, CT 06051
DPUC Review of CL&P’s and UI’s Conservation and Load
Management
Programs
and Budgets for Year 2003 and 2004
Docket
No. 03-01-01
Request to Reconsider Pending Suspension of C&LM
Activities
Dear
Chairman Downes:
The Energy Conservation Management Board (ECMB) is concerned that proposals
by Governor Rowland and some state legislators to redirect the Conservation
funds to the State General Fund, which resulted in the DPUC Order in Docket
03-03-01 directing the Utilities to “exercise extreme caution and prudence to
avoid incurring costs beyond June 30, 2003," has led to the pending
suspension of conservation and load management (C&LM) programs by the
utility companies. While perhaps an
understandable reaction by the utilities to the Department's May 28, 2003
Order, the pending suspension will damage, if not destroy, C&LM activities
in the state for a long time to come.
This suspension and damage to the state's C&LM infrastructure could
not come at a worse time as the state faces serious transmission problems in
Southwest Connecticut that will impact ratepayers throughout the state. The current course of action -- not allowing
rate recovery for C&LM expenditures -- is creating a crisis in C&LM by
causing the companies to halt additional expenditures in the face of the
Department's refusal in the Order in Docket 03-03-01 to allow cost recovery for
program expenditures after July 1, 2003.
The ECMB supports two recommendations.
· First, the Department should
reconsider its Order that directed the companies not to incur costs past June
30, 2003. The Department should
immediately direct CL&P and UI to expend funds on the full array of programs
targeted at the congestion problems in SWCT.
These include the ISO-NE demand response programs and the remaining
programs designed to find savings in SWCT.
· Second, because of the
benefits in reducing price volatility and reducing LMP as well as decreasing
demand, the Board urges the Department to order the companies to proceed with
all programs as outlined in the amended 2003-2004 Plan
The ECMB requests that the Department provide guidance that ensures the
utilities are able to recover for all prudently incurred and cost effective
expenditures on 2003 C&LM programs if C&LM funds are transferred in a
state budget bill. This approval would
only apply if a transfer of C&LM funding causes a lack of funds to be available
for Department approved program expenditures. The statute clearly imposes an
obligation on the companies to expend these funds on C&LM activities
pursuant to the plan and the Department clearly has the ability to allow cost
recovery for efficiency and load management program investments that reduce system
demand and provide ratepayer benefits.
C&LM programs address SWCT and reliability and cost issues in three
ways. First, some program monies
support ISO-NE demand response programs.
Second, additional programs reduce load in SWCT -- as the Department had
directed earlier in the year. Third,
the programs' load reductions statewide reduce the congestion charges that will
occur from SMD and LMP throughout Connecticut.
Given the "precarious" nature of the reliability and price
volatility issues facing SWCT, and given the critical role of C&LM in
addressing and mitigating the potential detrimental impact of unmet demand, the
Department is in the position of articulating the importance and prudence of
going forward with C&LM programs in addressing the SWCT situation.
In addition, because of the overall program benefits to the state in
reducing demand and positively impacting the price threat of LMP, it would be
prudent for the Department to order that all programs proceed pursuant to the
plan and indicate that the Department would support cost-recovery for C&LM
expenses incurred by the companies.
Particularly in the absence of transmission upgrades, the programs are
one of the least-cost tools in addressing Connecticut's volatile electricity
issues this summer. C&LM programs
and the infrastructure that has developed are essential to avoiding dire
circumstances, both to reliability in SWCT and to price impacts in the
Connecticut LMP zone as a whole. For
these reasons, the most prudent action is to field the full set of programs,
reap the demand reduction benefits and maintain the infrastructure for
C&LM.
Accordingly, pursuant to CGS §4-181a(a)(2) the ECMB requests that the
Department reopen Docket 03-03-01, reconsider its position in the Decision in
Docket 03-03-01 dated May 28, 2003 and direct the utilities to field the
programs as described in the 2003-2004 C&LM plan for the beneficial systems
impacts in SWCT and the state as a whole.
Thank you for your consideration of the ECMB's recommendations regarding
this crisis in C&LM investments.
/s/
The Energy Conservation
Management Board
Shirley
Bergert, Residential Representative
Richard
Blumenthal and Michael Wertheimer, Attorney General
Robert
Earley, CBIA
Jeff
Gaudiosi, MAC
Mary
Healey and Richard Steeves, OCC
Chris
James, DEP
Anthony
Marone, United Illuminating Company
Kevin
Marotta, Middlesex County Chamber of Commerce
Daniel
Sosland, Environment Northeast
cc: Hon. Jack Goldberg
Hon. Linda Kelley
Hon. Jack Betkoski III
Hon. Ann George
Sen. Melodie Peters
Sen. Andrew McDonald
Sen. Donald Williams
Sen. Kevin Sullivan
Speaker Lyons
Rep. James Amann
Rep. Terry Backer
Rep. Bob Duff
Rep. Pat Widlitz