As session end draws near, massive energy bill is on the table

SB1 – the massive omnibus energy bill that establishes Connecticut’s first energy department in three decades, creates new energy programs, alters old ones, sets ambitious policy goals and overhauls parts of the energy business – is headed for a vote in the Senate as early as today, even as its final details are unresolved.

“It’s insane; 24 hours perhaps before the bill runs and there’s all this stuff up in the air,” said Charles Rothenberger of the Connecticut Fund for the Environment. Rothenberg said the advocacy organization largely supports the bill’s goals, but he couldn’t comment on its specifics.

“Changing a sentence here or changing a word there can have profound implications,” he said.

“Who knows what is actually in the bill,” he added, echoing a sentiment voiced by many including bill supporters. “It’s been a little bit of a frustrating bill with it being negotiated behind closed doors.”

At 120 pages, 50-plus sections – though shorter than it was when it started three months ago – SB1 appears likely to become law after two years of thwarted efforts to get updated energy policy on the books.

The bill’s primary effect is to create the Department of Energy and Environmental Protection, DEEP. Structurally, the department consists of a new energy component added to a merger of the existing Departments of Environmental Protection and the existing Public Utilities Control – now to be the Public Utilities Control Authority–plus several smaller entities.

“Creating DEEP as the centralized coordinating energy and planning entity really is getting Connecticut moving again rather than just reacting, and that’s good,” said Chris Phelps of Environment Connecticut.

Another major change the bill makes is to how the state procures electricity. Instead of an integrated resource plan, IRP, designed by the utilities as it is now, it would be done through DEEP, in conjunction with the utilities – something some Republicans insisted on as an extra layer of oversight

“I think that’s a key change,” Phelps said. “No longer do we have the potential of the foxes to be guarding the henhouse.”

The bill also would make energy efficiency a key part of an electricity procurement plan, something Phelps pointed out is cleaner and cheaper than building and operating new power plants.

Even with details still being nailed down, Republicans are generally on board with the bill. Sen. Kevin Witkos, R-Canton, the ranking member on the Energy and Technology Committee which originated SB 1, called it a truly bipartisan bill and said he was proud to stand in support of it with the Democratic Committee chairs, Sen. John Fonfara, D-Hartford and Rep. Vickie Nardello, D-Prospect.

Fonfara and Nardello have both declined to comment while the bill is being finished.

“It reduces rates and decreases costs for Connecticut ratepayers,” Witkos said. “That’s what people in Connecticut have been asking for.”

Witkos singled that out as the first of four goals listed at the start of the bill. The others are ensuring the reliability and safety of the energy supply, increasing the state’s use of clean energy, and creating jobs and developing the state’s energy-related economy.

“The commissioner has a lot of power and a lot of leeway,” Witkos said. “As long as he sticks to those goals, Connecticut will be a better place and a cheaper place to use electricity in the future.”

But Witkos admitted negotiation has been brutal. “It’s been non stop; it’s been agonizing,” he said. “Weekends, nights, mornings, down to the wire. Unfortunately it’s getting too close for comfort.”

Among those affected most by the legislation are the utilities themselves. Connecticut Light & Power declined to comment on the bill, calling it “a work in progress.” United Illuminating spokesman Michael West, while also saying it remained in “a state of flux,” said a big concern was that whatever is in the final bill, “we need to insure transmission reliability stays intact.”

A provision that would allow the utilities for the first time to build and own up to 10 megawatts of renewable energy generation got a thumbs-up from West. “We welcome that with open arms,” he said.

Another major component of SB1 is the restructuring of the Connecticut Clean Energy Fund. As currently proposed, a new quasi-public Clean Energy Finance and Investment Authority will be created to administer the Fund. The Authority would come under the existing quasi-public agency, Connecticut Innovations.

There also is a new funding model, which some refer to as a “green bank,” that allows for leveraging the ratepayer fees the Fund already gets, private capital and other funds. The legislation also dramatically expands the Fund’s purview beyond the solar rebate and other limited clean energy projects to include things like electric and natural gas infrastructure projects.

Among other provisions in SB 1:

  • The commercial solar program becomes part of a renewable energy credit system that includes other types of zero-emission energy sources. Utilities are required to purchase energy from them through long-term contracts.
  • A similar program is established for low emission generation like fuel cells.
  • Municipalities may establish a Property Assessed Clean Energy, or PACE, program to do energy efficiency and renewable energy work that is repaid through an assessment on property taxes.
  • It authorizes municipalities to do energy retrofits through performance contracts that use the money from energy savings to pay for the work. It also establishes standards and contracts that municipalities may use, and the state must use.
  • It allows virtual net metering – a concept in which electric customers get the benefits of credits a municipally owned building receives for putting excess renewable energy, like solar, into the grid, even though those customers don’t own renewable power themselves.
  • Launches a number of studies including – how to reactivate old oil and coal power plants with natural gas – though some question who should pay for such a retrofit; how ISO New England does its pricing – long controversial because of the high rates that have resulted; whether to expand the renewable portfolio standard; and natural gas expansion.
  • Establishes a $4 million, three-year pilot program to develop combined heat and power generation projects and anaerobic digesters.

One controversial part of the bill regards efficiency standards for appliances, adding televisions and DVDs to the already long list of those covered. The result has been intense, 11th hour lobbying by the consumer electronics industry, which says such standards, especially for televisions, are unnecessary with voluntary programs such as Energy Star in place.

Environment Connecticut’s Phelps noted that some large TVs an draw as much power as a refrigerator, and that it was difficult for consumers to differentiate. He noted that another part of the appliance provision establishes standards for the DEEP commissioner to add appliances to the regulation list without going through the legislature.

While Phelps is happy with most of what he’s seen in drafts of SB1, and as long as the bill is, one thing he would have liked to see more of is provisions for larger scale grid connected renewable generation projects.

“On the whole,” he said though. “It’s a pretty strong framework for getting Connecticut moving forward again with energy efficiency and renewables.”