WASHINGTON–Gov. Dannel P. Malloy today urged a group of state and local environmental officials to push the envelope on energy efficiency and to make an inextricable connection between lower energy costs, increased economic competitiveness, and a cleaner environment.

Speaking at a “clean energy summit,” organized by the U.S. Department of Energy and held in a Washington suburb, Malloy highlighted his decision to combine Connecticut’s energy and environmental agencies. He said the move demonstrated that his administration is “equally committed to the environment as we are to driving the cost of energy down, and one of the leading ways to drive the cost of energy down in a constrained marketplace is efficiency.”

The DOE conference focused on sustainable programs for state and local governments, and the crowd was mostly municipal leaders and local policymakers. It was closed to the press, except for opening remarks on Wednesday by Energy Secretary Steven Chu and Malloy’s talk on Thursday. (A DOE spokesman said the summit was supposed to be a private forum where “policymakers can exchange views openly and no grandstanding.”)

In Malloy’s speech, titled “The Greening of Government,” the Democratic governor said that even as federal stimulus dollars for efficiency initiatives start to run out this summer, that should not be a reason to pull back on such efforts.

“We’re not going to share in the number of dollars we’ve had before but that should not change our outlook,” he said. He said there was an easy justification for investing new state or local money, leveraging new fees, or even raising taxes to fund efficiency and conservation. And he said it was incumbent on public officials and policymakers to make that argument.

“We have something to sell,” he said. “We’re saving government money. That’s what we have to lead with. That’s what we have to talk about.”

Not only do energy efficiency measures save public dollars, he said, but they help make businesses more competitive and improve the environment. “If you wrap your mind around that, you have a product to sell,” he said. “A product to sell to the mayor you work for or the city council that passes the budget.”

He said local officials need to think creatively about how to leverage funding from private sources and be willing to commit public money as well, even if it means dipping into their own diminished government coffers, to fund energy-saving programs.

He said that existing achievements in energy efficiency, spurred by the federal stimulus law, should serve as a “justification for investing some of our own state and local monies.” He also suggested putting fresh pressure on utilities to fund conservation and efficiency initiatives and “even create effectively additional taxing authority… to pay for the kinds of investments that your communities need.”

He noted that the falling price of natural gas provides an opening to leverage new fees that could fund such programs. “Those costs are coming down,” he said. “This is a great time to be having a reasonable discussion with your state legislators about how to use that lower price as a vehicle for funding–by adding a slight additional charge–some of the things you need to get done in your communities.”

He noted that when he was mayor of Stamford, Connecticut’s high energy costs were always a top issue for businesses that he was either trying to lure to his city or to keep from leaving.

Creating a more competitive business environment “does not mean you have to become a bigger polluter. In fact, it means just the opposite.”

Malloy said he was invited to speak at the summit by Energy Secretary Steven Chu. He said he saw it as an opportunity to strengthen his relationship with the federal energy officials, as well as to address an issue he feels passionately about. He told the group that he hasn’t been able to focus on environmental and energy issues as much as he’d hoped, because he’s been consumed with hashing out a budget agreement.

But he said he remains committed to his pledge to reduce energy consumption in Connecticut by 15 percent. And he said he wants to make the state No. 1 in energy efficiency. The state now ranks 8th on that measure.

“I’ve told Dan Esty, my new commissioner, that it’s his job to give me a plan to do that,” he said.

Asked about his approach to renewable energy sources, Malloy said he didn’t feel the need to “prove every technology in America” and would look at each new source through a “matrix” that factored in job creation and cost.

So, for example, he said, fuel cell technology looks more appealing than solar energy. The former, he noted, is largely based on the use of natural gas, which doesn’t diversify the state’s energy portfolio.

But, he said, “it’s a very efficient way to make energy and the technology is getting better and better all the time.” He said solar “is interesting,” but it “doesn’t produce a whole lot of jobs, except installation jobs, in my community, unless I get people starting to make the products in my state.”

His other main factor in evaluating renewable energy sources, he said, would be the price of that producing that energy.

“Investing in something that’s going to produce energy at 25 cents or 30 cents per kilowatt is not a technology that I’m particularly interested in,” he said. But “something that comes relatively close to our current effective cost … that’s a technology that I’d like to play a role in using, capturing, and proving.”

In response to a question about how officials in other states could fight raids on public benefit funds for conservation, Malloy joked that they should elect him governor. That quip, in turn, prompted one participant to whisper that he must be thinking about a presidential run.

Asked about his decision to combine Connecticut’s environment and energy departments, he said, “I need an agency that links protection of the environment with energy efficiency and cost.”

Ten years ago, he said, people might have been upset with his emphasis on lower costs, “because assumption would be if you lower costs, more energy is going to get used.” But, he added, “I think we can change that dynamic and I tend to prove we can change that dynamic.”

Malloy told the group said that before his speech began, he’d joked to an attendee that if he were president, he’d put the federal departments of energy and environment together. “Now I may be wrong about that and other people can decide,” he said, “but on a long term basis, I think these things have to be together.”

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