Testimony of Environment Northeast
on
RHB 6510, An Act Concerning Revisions to the Public Service
Company Laws
March 11, 2003
Daniel L. Sosland,
Executive Director
Roger E. Koontz, Senior
Attorney
Danae Dwyer, Staff Attorney
Environment
Northeast (ENE) is an environmental advocacy and research organization with
offices in Hartford and Maine. ENE
testifies today in opposition to RHB 6510.
RHB 6510 would
direct a transfer from the Conservation and Load Management Fund (C&LM
Fund) to the Department of Public Works or to towns. RHB 6510 would also set
aside a minimum amount from the Clean Energy Fund to the state and towns.
The C&LM
Fund was established to enable the state to capture, in an organized and
deliberate process, the economic and environmental benefits of energy
conservation and load management. It
built on the experience of Connecticut and other states in designing effective
approaches to this goal. The Energy Conservation
Management Board, the electric utilities and the DPUC have worked diligently to
implement programs which are cost-effective, provide benefits to all classes of
ratepayers including the state and the towns, and make lasting improvements in
the productivity of Connecticut. These
benefits would be lost if the funds were simply allocated to particular
recipients without the planning, coordination and safeguards that make the
program successful.
1.
The Current Program is Highly Effective.
In 2002, the
C&LM Fund used the $86 million collected from ratepayers for this purpose
to fund a broad array of programs for all customer classes. These funds, reinvested in homes and
businesses throughout the state, will provide a lifetime savings of over $370
million in lower bills and other benefits -- a 400% return on investment.
In 2003, the
Connecticut Conservation and Load Management Fund, as planned, would:
·
Meet Reliability Needs in Southwest
Connecticut -- The
C&LM Fund would have a particular focus on the electric grid congestion
problems in Southwest Connecticut. It
would reduce the loads on the overburdened transmission and distribution lines
by approximately 100 MW statewide and by over 60 MW in SWCT alone. If these funds were not available for SWCT,
the energy crisis there will clearly be even more acute.
·
Spur Economic Development and Job
Creation -- The
Conservation Fund creates jobs at the rate of 10-15 jobs per million dollars
spent. In 2003, that means the
programs will create over 1000 jobs in the state. By helping businesses expand, improve productivity and stay in Connecticut,
the C&LM Fund is making a meaningful contribution to the tax bases of the
State and its municipalities.
·
Provide Large Environmental Benefits -- The Fund is a major contributor to
cleaner air by avoiding the emissions of pollutants such as NOx, SOx and global
warming gases.
2.
The Bill Would Eliminate the Safeguards of the Process.
Energy
conservation programs in Connecticut are developed with the input of the Energy
Conservation Management Board (ECMB), an 11 member board carefully established
in law to include representative stakeholders from business, state agencies
like OCC, DEP and the Attorney General and environmental and consumer
interests. This Board retains a small
number of highly qualified independent consultants to advise it on program
design, budget impacts and examples of good programs from around the
country.
.A fundamental
element of the statute and the planning process is that programs and
technologies must be cost-effective. A
careful screening procedure is in place to assure that there is a clear
economic benefit to the individual customers who participate in the programs
and to the state as a whole. Another
major element is an emphasis on market transformation programs which coordinate
efforts at wholesale, retail and customer levels to increase acceptance and
usage of more efficient products so that they become the standard and no longer
require incentives or promotion by the program. The usefulness of program monies is maximized by the fact that
they are not set aside while the customer decides what he plans to do, but are
only spent on efficiency projects and activities that are ongoing or completed.
These benefits
would be lost if the monies were simply allocated to the State and
municipalities. This process should be left intact. The development of sound conservation programs carefully balances
competing interests, budget priorities and different program types. The process in place since 2000 is working
to produce a high quality balanced portfolio of programs with a great deal of
public input
.
.
3.
The State and Towns Have Received a Proportional Share of the Fund as
Required by the ECMB's Equity Principle
The ECMB acts
under certain criteria, including an equity principle that calls on program budgets
for each customer sector -- commercial, industrial, residential, low-income,
state and towns -- to be as close as possible to revenues received from that
sector. For 2003 programs, in the
CL&P service territory, 2.5% of program revenues are from municipalities
and towns receive 3.4% of the program budget.
for United Illuminating's service territory, 5.6% of projected revenues
are from municipalities and 5.2% of proposed program budgets go to towns; state
buildings contribute 1.4% of revenues and receive 1.4% of program budgets.
Current programs include specific state and municipal building projects. For
2003, prior to the impacts of the state budget transfer of $12 million, over $1
million is slated for state buildings and $2.8 million for municipal buildings.
Historically,
the State and municipalities have received special emphasis in the disbursement
of conservation funds and the program has been sensitive to their needs.
A direct
statutory transfer would undermine this effort to be fair to all ratepayers and
to only fund cost-effective projects that are ready to be implemented.
4.
The Bill will Not Advance the Commercialization of Clean Energy
Technologies
By ordering a
set aside for state and towns in the Clean Energy Fund budget, the bill does
not advance the commercialization of clean energy technologies and instead
focuses on the political subdivisions of the state. ENE fails to understand how this amendment to the law will
further a need to invest in technologies.
***
Environment
Northeast respectfully urges the Committee to reject RHB 6510.