June 1, 2003
To the Connecticut Legislative Leadership:
I am the President of Energy Federation, Inc. (EFI), a company that has been promoting energy saving products for over two decades. We both directly sell such products to consumers and businesses, and process incentives, or rebates, for retail companies that sell energy efficient lighting and appliance products. Over the past five years, we have issued rebate checks totaling over $15 million to hundreds of Connecticut businesses and over 80,000 Connecticut consumers. These payments have been made with funds collected through the Conservation and Load Management (C&LM) charge that appears on customers’ electric bills.
I fear that Governor Rowland and many legislators do not entirely understand the many benefits that the conservation funds deliver to Connecticut households and businesses. I understand that many individuals and companies in our ‘efficiency’ industry have been mobilizing to try to more effectively communicate the importance of the programs funded by the C&LM charge. Perhaps we can be accused of assuming these benefits – so stunningly evident to us in this industry - were more self-evident to those outside our industry than was actually the case. This is an error we certainly are attempting to correct.
I realize the process of attempting to put the state budget together is pretty much an all-consuming task for you at this time, so I will try not to cover ground that I believe others in our industry are likely to have covered in recent communications with you. Let me describe one immediate, specific example of the deleterious effects the proposals to take conservation funds has had for Connecticut citizens.
Our company, and many other companies, working in concert with Connecticut Light & Power (CL&P) and United Illuminating (UI), helped put together a national ENERGY STAR campaign this spring to promote energy efficient clothes washers. This campaign persuaded eight major appliance manufacturers, including Whirlpool, Maytag, General Electric, Sears/Kenmore, and Fridgedaire, to match rebate dollars offered by CL&P and UI (ratepayer funds) to provide Connecticut consumers with a $100 rebate when they bought qualifying washers. This program was halted after the first month of a three-month promotion, because of the uncertainty of continued funding for this and other C&LM programs. Rebate coupons were pulled from appliance retailer store shelves across the state. Incredible ill will has been generated within the manufacturer and appliance retail industries as a consequence. Connecticut, which has consistently been perceived as a national leader for its strong, often innovative energy efficiency programs, is being perceived quite differently now – for its willingness to dismantle programs whose benefits far exceeded their cost.
Ill will on the part of manufacturers, retailers, and consumers is not the only consequence of the premature halt to the national ENERGY STAR clothes washer campaign in Connecticut. We anticipated processing an additional 4,000 clothes washer rebates for Connecticut residents from now through August. Manufacturers would have paid $200,000 to supplement $200,000 of incentive payments from the C&LM funds. Connecticut residents (and voters) will not see the benefit of these manufacturer dollars. Further, these manufacturers, which had to be persuaded over a several year period to actively participate and financially support this type of initiative, will be very reluctant to participate in similar future campaigns, having been burned by their experience with Connecticut – which was one of the major markets for this national promotion.
I think our industry is exposing some of the flawed thinking behind the proposals to raid conservation funds to offset the state’s budget deficit. Whether a budget proposal passed claiming to take $84 million, or $72 million in conservation charges, the actual dollar ‘benefit’ the state will see will be much smaller. Municipalities, non-profits, and manufacturers will legitimately claim that the conservation and renewables charges have been converted to taxes, and will argue they are exempt from paying them, resulting in an immediate loss of potentially $35 - $40 million. Somewhere around a thousand people working and living in Connecticut will lose their jobs, and become a drain on the state’s General Fund, rather than contributors to it. The costs of supplying power to communities in transmission and distribution constrained southwestern part of Connecticut are likely to ultimately cost the state, and its residents, as much or more than the net funds the state will get by raiding the CL&M funds.
But what will be lost is not the entire story. What will not be leveraged, or gained, such as the appliance manufacturer rebate dollars I alluded to, is also part of the story.
I sincerely hope you will give serious consideration to this issue, and decide to support both the present and future energy and economic health and security of Connecticut.
Bradley Steele
President, EFI