Creating DEEP: Consensus on the concept, haggling on the details

The last time Connecticut had something akin to an energy department, Jimmy Carter was president and the nation faced the aftereffects of the Arab oil embargo: crude oil had risen to $14.53 a barrel–$53.02 in today’s dollars–and the average price for a gallon of gasoline was 62 cents–$2.26 today.

They would be a relief now as Connecticut once again creates an energy department. By the time this legislative session ends, it’s widely expected that a new Department of Energy and Environmental Protection, DEEP, will exist in place of the current Department of Environmental Protection.

There doesn’t seem to be significant opposition to the move, which in general would merge, streamline and coordinate nearly a dozen energy and environment-related entities that now exist in somewhat disconnected and frequently redundant fashion in and outside state government. Ultimately it would put energy and technology policy, environmental conservation and quality and public utility regulation under one roof.

But as the saying goes, the devil is in the details, and there are a lot of them.

Concerns focus on specifics, not the overall concept, and there’s been a fair amount of posturing, jockeying for placement and downright scrambling for survival as entities fluctuate between the “in” and “out” columns while legislators, members of the administration and others negotiate the particulars.

“It’s funny who’s begging to be in and who’s not,” said Dan Esty, the commissioner of Environmental Protection who would become the head of the new department. “I think the consensus is overwhelming that this happen. The only question is the exact contours.”

Unlikely to change are the three main components of DEEP: the existing DEP, the Department of Public Utility Control, which regulates utility rates and services and about a dozen people in the Office of Policy and Management who handle energy-related matters.

“Consolidation is probably the most important thing. Then they can add all the bells and whistles,” said Joel Gordes, an energy consultant and former state legislator who has had ties to a number of the groups under consideration to become part of DEEP.

“They should take the dictate that is given to all doctors,” he added. “Do no harm. And the reason is some of the stuff I’ve seen in some of the bills could disrupt the programs that are ongoing and have been successful.”

Causing the most angst on that front: The Council on Environmental Quality, the Connecticut Energy Advisory Board, the Connecticut Clean Energy Fund and the Connecticut Energy Efficiency Fund – the last two are financed by fees on electric bills.

Barbara Wagner, chair of CEQ, which operates independently as an environmental watchdog with two employees and a $165,000 a year budget, said a version of the new department would add CEQ without independence and a separate data collection function.

“We do not believe we could be effective as an office within DEEP,” she said, a view echoed throughout the environmental advocacy community. “The basic statutory office of CEQ could be compromised significantly.”

Jeff Gaudiosi wears many hats: chair of the CEAB, vice chair of the Energy Efficiency fund and also regulatory counsel for the Manufacturing Alliance of Connecticut, which as a group is cautious about the new department. “The idea of putting them together makes sense, but in practice, you never know how things will turn out,” he said.

As part of CEAB Gaudiosi was reluctant to say where he’d like it to end up. Opinions are mixed. Some advocate rolling it into DEEP, others prefer it remain an independent informational body.

With his Energy Efficiency Fund hat on, he worried about losing momentum if the fund–considered very successful and popular – is moved. That opinion was shared by Connecticut Light and Power, which along with United Illuminating administer the Fund. “When you’ve got something that works, don’t change it,” said Rich Soderman, CL&P’s director of legislative policy.

Moving the two funds into DEEP poses challenges because of their ratepayer backing, and in the case of the Clean Energy Fund, which oversees clean energy incentive programs, because it’s considered quasi-public. Opinions again are divided. Some prefer them in DEEP for better program coordination. Others feel independence is more important.

Among other decisions, the Connecticut Siting Council will not go into DEEP; the low-income weatherization program will. The state Consumer Counsel, whose office is slated to move into Consumer Protection, has asked to become part of DEEP as a Division of Ratepayer Advocate if it cannot remain independent.

Happy to be making the move is DPUC Chairman Kevin DelGobbo. “This is the right direction,” he said. DelGobbo’s 115 employees and $20 million ratepayer-financed budget will join DEP’s nearly 950 employees and annual $145 million budget, a little less than half of which comes out of the general fund. (The rest is from federal and other sources.) The funding structures are expected to remain.

DelGobbo has been vocal about his belief that the DPUC has strayed from its core regulatory mission and views the move as an opportunity to get back to it and to update its approach to utilities. “This allows the state,” he said of the consolidation, “to make better decisions, developing and executing policy in an arena all agree is important.”

Many said it was critical the final legislation reflect long-term strategy.

“The creation of this new agency is not just for then next four years or eight years; it’s for the next 25, 30 years,” said Energy and Technology Committee co-chair Sen. John Fonfara, D-Hartford. “We don’t know who will follow Dan Esty or Dan Malloy.”

Fonfara’s co-chair, Vickie Nardello, D-Prospect, who favors incorporating all the disparate energy and environmental entities into DEEP, said more than bureaucratic changes, her goal is to lay an organizational groundwork for a comprehensive energy policy she believes the state has never had and that takes consumer interests to heart.

“It will change their life by virtue of the fact that we’ll have the proper data analysis and planning to secure really our energy future,” she said. Without that, she added: “you’re going to make poor public policy decisions. And you make poor public policy decisions that means in the end the ratepayers of the state of Connecticut will pay more than they should.”

Esty said consumers will benefit through better review of rates, more comprehensive energy efficiency focus and a greater commitment of resources to clean energy across the economic spectrum.

“It’s a huge opportunity to do things in more structured and systematic way,” he said.