Connecticut Feels the Results of Energy Fund Raid

State Report: Budget Raid On Energy Funds Hurting Connecticut Economy

Written by Gregory B. Hladky,, March 30, 2018

Lawmakers’ deficit-driven decision to “sweep up” $127 million in energy efficiency program funds will trigger far larger economic losses, according to a state board created to monitor Connecticut’s efforts to cut energy use.

The Connecticut Energy Efficiency Board warned in its latest annual report that siphoning away that money would result in $275 million in lost energy efficiency savings and cause the burning of an additional 1.6 million gallons of fuel oil to heat homes.

“This diversion of electric ratepayer funding for state budgetary needs will have harmful consequences for Connecticut,” the energy panel stated in its latest annual report, including lost jobs in the solar industry. One activist group put that overall economic loss at $889 million over two years.

In order to help solve a massive budget deficit last year, the General Assembly took the $127 million out of energy efficiency funds that are financed through surcharges on ratepayers’ bills. The action effectively chops 33 percent of the funding available for programs to help homeowners and business cut their energy costs.

bipartisan group of state lawmakers who voted for the budget that swept up that energy efficiency money now insists that some or all of those funds should be restored. But they also acknowledge they don’t know where the money would come from when state government is still struggling with fiscal troubles.

The energy board’s co-chairs are hoping to convince legislative leaders of the need to restore at least some of the money lost during last year’s budget “raids.” But they know it won’t be easy in this grim budget climate.

“I think there’s support for trying to roll back some of the fund raids,” said William Dornbos, a co-chair of the energy panel and Connecticut director for the activist group Acadia Center. “But it’s definitely going to be an uphill battle,” he said.

“We’re of course keeping our fingers crossed,” said Taren O’Connor, the other co-chair and an associate rates specialist with the state Office of Consumer Counsel. She said the panel’s goal is to get lawmakers “to think about what they’ve done… The fact they swept this money up is really wrong.”

“We were doing great things [with energy efficiency programs in Connecticut],” O’Connor said. Jobs are already leaving the solar installation and energy efficiency industry, she said. “It’s sad for Connecticut… This is a step back.”

Gov. Dannel P. Malloy has proposed restoring $24 million for other energy funds that were also reduced as part of the legislature’s efforts to cut budget deficits. Those funds involve Connecticut’s Green Bank and the Regional Greenhouse Gas Initiative, programs aimed at providing additional funding to reduce energy use and air pollution. But the governor’s plan wouldn’t put back any of the $127 million taken from the direct energy efficiency programs.

Dornbos told lawmakers this month that “Connecticut now risks falling behind nearly all other states in New England on efficiency.”

Dornbos, who is Connecticut director for the energy activist group Acadia Center, said that “Massachusetts, Rhode Island and Vermont have been procuring significantly more electric efficiency savings than Connecticut for several years now.”

“Acadia Center estimates that 2018 will see a major drop in Connecticut’s electric efficiency performance” as a result of the diversion of those state funds, Dornbos said in testimony at a legislative public hearing.

Mary Sotos, deputy commissioner of Malloy’s Department of Energy and Environmental Protection, said it is “now more important than ever that we protect these vital programs, as they not only drive economic growth but also contribute to a healthier environment.”

The ratepayer funded energy efficiency programs in 2017 helped support 34,000 jobs in Connecticut and generated an estimated $1.4 billion to the gross state product, according to the energy efficiency panel’s 2017 report.

Economic benefits from those efficiency and conservation efforts included about $42.7 million in residential energy savings last year and $32 million in savings by Connecticut businesses, the board reported.

For budgetary reasons, the loss of the energy efficiency funds taken away by the legislature last year is likely to have the biggest impacts in the 2018-19 fiscal year, according to Dornbos.

“There is a desperate need to undo as much as possible as soon as possible,” Dornbos said.

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