As session winds down, plans for a sweeping energy overhaul emerge

A thaw in one of the General Assembly’s chilliest relationships has produced a sweeping, 11th-hour proposal to overhaul Connecticut’s electric regulatory structure and subsidize solar energy.

Setting aside three years of conflict, Sen. John W. Fonfara, D-Hartford, and Rep. Vickie O. Nardello, D-Prospect, are collaborating on what could be the biggest energy bill since deregulation in 1998.

The two co-chairs of the Energy and Technology Committee circulated drafts of their legislation this week, setting off a scramble by industry and environmental groups.

“It’s getting everyone in this building in a frenzy,” said Sen. Kevin D. Witkos, R-Canton, the ranking Republican on the committee. “This is huge, and it never had a public hearing.”

Witkos and Fonfara, 4-30-10

Sen. Kevin D. Witkos, left, ranking Republican on the legilature’s energy committtee, and Sen. John Fonfara, the committee co-chair, confer over the energy bill Fonfara is proposing (Mark Pazniokas)

And the bill is unfinished.

Nardello rewrote sections of the bill on a laptop in the House chamber Thursday. Fonfara spent much of the day in a hideaway office off the Senate floor, reassuring nervous industry lobbyists. Frustrated he could not find Fonfara, Witkos sent him a text message: “We have to talk.”

Witkos said Republicans were put off by a message Fonfara and Nardello circulated seeking comments: “Comments may only refer to whether the language of the draft carries out the intent of the bill. Comments should NOT refer to any major policy change to the bill.”

They eventually conferred in the Senate chamber, leaning over Witkos’ desk. They promised to talk again.

If Fonfara can answer questions raised Thursday in a Democratic caucus, the bill could come up for a vote Saturday in the Senate and then be immediately sent to the House. The deadline for passage is midnight Wednesday, the end of the 2010 session.

Election-year politics are at play.

With their constituents paying the highest electric rates in the continental U.S., legislators would like nothing more than to go home next week with an energy bill that promises to cut bills by 15 percent by July 1, 2012.

The bill creates a Connecticut Energy and Technology Authority, replacing the Public Utilities Control Authority that now regulates the state’s utilities.

The revamped authority would have the added responsibility of promoting new technologies and renewable energy sources, such as solar, wind and hydro-power. It would conduct research and evaluate what has been a volatile industry since deregulation. It also would play a stronger role in procuring energy.

It marries elements of disparate bills promoted by Nardello, who unsuccessfully fought deregulation as the energy vice chairwoman, and those favored by Fonfara, a deregulation advocate.

Opponents already are trying to undermine the bill, which is an amalgam of several pieces of legislation, saying it is too ambitious and too complicated to take up in the last days of the session.

Witkos said some people are calling it an “aircraft carrier,” the name given to big bills at the State Capitol that become landing platforms for ideas incorporated from other legislation. He disagreed.

“This isn’t an aircraft carrier,” Witkos said. “This is a continent.”

Forging a working relationship

Other major energy bills have been revised and brought to a vote near the end of other sessions, but Fonfara said this process took longer as he and Nardello, who became co-chair last year, established a working relationship.

“We’ve had to find a path where she and I could say yes to something,” Fonfara said. “We’re coming at this, in terms of the market, from completely different places.”

Nardello 4-30-10

Rep. Vickie Nardello works on a draft of a major energy bill on the floor of the House Thursday (Mark Pazniokas)

Fonfara and Nardello have vastly different constituencies.

The competitive energy retailers who came into existence after deregulation see Fonfara as their champion.

Nardello has an enthusiastic following among activist and consumer groups, such as the Connecticut Citizen Action Group. She was promoted to co-chair after another CCAG ally, Christopher G. Donovan, D-Meriden, became speaker of the House.

Fonfara said it took time and conversation to agree on a stronger regulatory hand sought by Nardello, including strong consumer protections on dealing with the electric retailers, without destroying competition.

“I think we’ve found that spot,” Fonfara said.

“These issues are surely complex,” Nardello said. “We met evenings. We met weekends. We talked about what needed to be done in terms of energy. It was a process by which we consulted other people. He had questions of me. I had questions of him.”

Still, colleagues were surprised by how the relationship progressed.

Their collaboration comes after three years of strife. In 2007, Nardello fought to defeat an energy-efficiency bill sponsored by Fonfara and backed by the leadership of both chambers. She called it anti-consumer, a slap at Fonfara that some saw as politically reckless.

On his web site, Fonfara promised the bill “will lead to savings for Connecticut consumers, increasing state investments in energy efficiency and conservation; new local energy production; clean, renewable energy sources; and, the reduction of greenhouse gas emissions.” Nardello called it too weak to control energy rates.

Last year, Nardello’s proposal to create a state power authority passed in the House, 96-45, but Fonfara’s opposition ensured that it died on the Senate calendar, despite its backing by his co-chairwoman. The fight had become personal as well as philosophical.

On Thursday night, Rep. Joe Aresimowicz, D-Berlin, stopped and laughed when he came upon Nardello and Fonfara pleasantly conferring outside the Senate chamber, lobbyists watching from a distance.

“That’s a picture worth money,” he said.

The “Big Energy Bill”

The initial reaction to the new alliance and what committee staff is referring to as the “Big Energy Bill” is decidedly mixed, with the utility industry expressing everything from mild concern to terror. CCAG and environmentalists, however, are cheering the development.

“It appears there was a good faith effort on behalf of both Vickie and John,” said Tom Swan, the executive director of CCAG. “While I may be as surprised as anybody else, they have produced a very, very good bill.”

As a result of deregulation, the industry has several major segments. Electricity is a commodity, bought and sold in contracts that fluctuate with the seasons and price of gas, coal and other fuels.

Connecticut Light & Power and United Illuminating, the two major electric utilities, no longer generate power. Their business is the distribution or delivery of electricity.

Corridor consult

Nardello, Fonfara outside Senate. (Pazniokas)

Most industry lobbyists, who are trying to negotiate with Fonfara, declined to comment on the bill. The exception was James A. Amann, the former House speaker, who represents a retailer, Northeast Energy. who said that the measure would undermine competition that is starting to take hold in the industry.

“Now, it’s working,” he said.

Tanya Meck, a spokesman for Northeast Utilities, the parent of CL&P, said the company feared that the subsidies for solar energy and energy-efficient equipment would drive up electric rates.

“We are currently reviewing the bill in its entirety and have submitted initial technical comments to the co-chairs of the committee,” she said. “The amendment contains 82 sections on 169 pages, many of which contain concepts that are new and have been proposed for the first time in this draft.  By our read, this amendment would result in significant cost increases for only CL&P and UI customers at a time when we all agree that electric bills in our state are already high.”

Environment Connecticut, an advocacy group, and the state’s tiny solar industry are delighted by proposed subsidies, which they believe could jump-start a faltering solar industry.

The utility industry fears that the subsidies could cost $1.5 billion over 10 years, but Fonfara and Nardello said that number is based on a misreading of the bill. The subsidies would be capped at a far lower level, they said.

Fonfara said the subsidies are necessary to build a home-state industry in renewable energy. Under current law, seven percent of the state’s power must come from renewable sources, such as wind or solar, with the percentage rising to 20 percent by 2020.

“Ninety-seven percent (of the renewable energy) is coming from out of state. That’s out of whack,” Fonfara said. “It’s coming from up state New York, Maine, Canada. We want to keep the dollars here. Yes, it’s more expensive, but the belief is as you ramp up more of this, the price will come down, be competitive.”