Madison — It’s just past 8:30 on a recent morning as employees of the home energy services company EcoSmart stretch a red tarp inset with a giant fan inside the kitchen doorframe of Lars Helgeson’s home. It’s for a “blower door test,” used to determine how airtight a house is.
For a $75 co-pay, Helgeson’s home will not only be tested, but as part of an overall energy assessment, he could also receive as needed free compact fluorescent lightbulbs, caulking around small leaky areas and low-flow showerheads, as well as information on rebates and loans for pricier energy efficiency projects.
But because Helgeson heats his home with oil, unless the legislature takes action this session, his home could be one of the last of its kind to get an energy assessment at this low price instead of something closer to its real cost — $600 to $800.
In that case, “I’d have to think really hard to see if the payoff would be worth it,” he said.
The problem is that the program — known as Home Energy Solutions, HES (pronounced hess) — is funded with part of a fee that electric and gas customers pay on their bills. The money goes into the Connecticut Energy Efficiency Fund, which administers the program with the state’s two electric utilities, Connecticut Light & Power and United Illuminating.
But people who heat their homes with oil and propane — about half the homes in the state — pay fees only on their electricity, not on their heat because it comes from unregulated fuels, as opposed to utility companies. Since they pay less into the fund, oil and propane customers have often been denied access to the full scope of HES services.
In recent years, funding to allow oil-heated homes to get that $75 co-pay has been cobbled together from other sources, including federal stimulus (ARRA) money and profits from the Regional Greenhouse Gas Initiative. At times, the co-pay for oil-heated homes has gone up to $300, resulting in a massive drop in audits among oil users. In years when the co-pay was $75, more than two-thirds of CL&P’s audits were in oil-heated homes. In years when the co-pay was higher, that rate dropped to about 20 percent.
Last year the legislature authorized HES funding from the Connecticut Energy Efficiency Fund for homes heated with oil, but it was capped at $500,000, far less than needed. The money will run out for UI’s oil-heated customers next month, and CL&P estimates it will run out by mid-May.
Without another source of funding, energy service contractors like Berlin-based EcoSmart said they face layoffs of half their staffs and that fewer audits meant less business for companies like insulation installers.
Compromise language to fund the program for oil-heated homes was worked out last week and inserted into a large and complex catchall energy bill. It removes the $500,000 cap and sets the energy audit charge at no higher than $75, leaving the option open for lower amounts for gas and electric heat customers.
While there’s no specific language, the intent is to have this serve as a stopgap measure for one year only. Not the worst news for energy and environmental advocates, but given that coming into the session, most of them said this was their No. 1 priority, not the best.
“It’s the best interim solution for the time being,” said Jamie Howland, Environment Northeast‘s director of climate and energy analysis and a member of the board of the Connecticut Energy Efficiency Fund. “It will prevent the stop-start to programs. It will prevent lots of the contractors from being laid off. And it gives us a year.”
But it could be a year that requires substantial diplomacy to bring together the parties involved in this issue. They have not seen eye to eye on funding structures, which arguably is the reason there’s no permanent agreement this year.
“The solution is going to have to involve the oil industry, consumer advocates, environmental advocates — there needs to be a consensus,” Howland said, noting that taking the CEEF funds means other programs could be shortchanged.
Many argue it’s only fair that oil customers pay more into the fund. “For a very modest increase — we’re really talking about dollars a year — we’re talking about a program to save individuals hundreds of dollars a year,” said Charles Rothenberger of Connecticut Fund for the Environment. “Whatever needs to happen to insure oil heat customers have access to the energy efficiency program, whether it’s this mechanism or that mechanism — the results really have to be that everybody is treated equally.”
But the Independent Connecticut Petroleum Association, which represents about 600 home heating oil dealers, has been clear in its belief that its customers are already paying plenty — the fees on their electric bills that go into the fund and the extremely high cost of oil.
It also was not lost on members that the original version of the legislation included a provision to explore more natural gas lines in the state — something that could mean less business for the oil companies. And the ICPA is a little gun-shy after having some of the fees its members contributed to a fund for underground gas tank removal diverted for budget-balancing purposes.
“It doesn’t exactly give you a warm and cuddly feeling that we should be paying another tax,” said the petroleum association President Gene Guilford.
His view has legislative support. “I wouldn’t support an additional premium,” said Sen. Kevin Witkos, R-Canton, the ranking member on the Energy and Technology Committee. “I’d have to see what goes along with it.”
Since HES began in 2007, CL&P has conducted more than 48,000 energy assessments through the end of 2011. UI has done nearly 16,000. No one disputes the value of energy efficiency. Sealing cracks, replacing windows, adding insulation, buying energy efficient appliances and even just swapping out lightbulbs mean a house will use less heat and electricity.
A study by Environment Northeast in 2008 said that every dollar invested in efficiency generates $6 to $7 for the state’s economy. “We know that energy efficiency audits pay big dividends — for individual customers, for the larger community by reducing emissions and for the companies and their workers who perform the audits and correct the problems,” said Rep. Lonnie Reed, D-Branford, co-vice chair of the Energy Committee. “Everybody benefits, so it makes good sense to increase the pool of eligible consumers.”
Craig Clark, program director for CL&P’s HES program, said with many people looking to switch from oil to lower priced gas heat, oil companies stand to do better economically even with an additional fee, which he supports, to fund HES. “I would think the oil industry would be more interested in saying, ‘Hey customer, I can save you $200 a year through this HES program that we ‘re paying into,'” he said. “If I was an oil customer I would be happy with that and my oil supplier, and I would stay with them.”
Rep. Jonathan Steinberg, D-Westport, a member of the Energy Committee, said the right answer is to fund the program. “We don’t know how we get there yet,” he said. “I am open-minded to any method that will help us solve a problem without creating a new one.”
One that energy services companies and others feel may have been created is the potential for a tiered pricing structure. They say it makes marketing the program, which is already difficult enough for consumers to understand, cumbersome.
But Raquel Kennedy of Victory Energy Solutions and a member of the Home Performance Alliance of Connecticut said aside from that caveat, her group is “thrilled.”
“We not only won’t layoff people, but this really gives us the confidence to hire people and really expand our business,” she said. “Part of it is the recognition that this is really an important and viable industry and that this is a really important program.”
As for Helgeson’s home energy assessment — despite cathedral ceilings and big windows — it turned out his house was just about as energy tight as it could be. Which made him happy not only that there would be no work needed on the house, but also that he only had to pay $75 for the visit. “That, too,” he laughed. “Yes, of course.”