It took a day or so for the smoke to clear on the House version of the budget -– and once it did, the energy and environment community was aghast.

Funding for the Clean Energy Finance and Investment Authority –- the state’s first-in-the-nation green bank — had been commandeered for general revenue. More than 20 percent was redirected in fiscal year 2014, and nearly all of it the following year.

“It’s a total disaster,” said Roger Smith of Clean Water Action. “This is the worst legislative session for energy I’ve seen in the last decade.”

“Raid” is the term being used most often for what happened in the overnight hours on Saturday as the House looked for ways to make up for the failed effort to auction certain electric accounts for an expected $80 million in revenue.

CEFIA proved a convenient target. It gets about $27 million a year from electric ratepayer fees which it leverages into additional revenue to fund the state’s residential solar incentive program and others.

The budget, now also approved by the Senate, takes $6.2 million in fiscal 2014 and $24.2 in 2015. It also takes $5 million from the Regional Greenhouse Gas Initiative in 2015. RGGI has been generating about $7.5 million a year that goes to energy efficiency programs.

“I think somewhere in legislators’ minds there’s not political ramifications for taking money from ratepayers,” Smith said.

But the practice is time honored. Govs. John Rowland and M. Jodi Rell both took funds from CEFIA’s predecessor, the Connecticut Clean Energy Fund, something candidate Dannel P. Malloy had said he would not do. In 2009, at the peak of the recession, New Jersey, New York and New Hampshire raided their RGGI accounts, but Connecticut never did.

But many felt there might be room for compromise as the budget implementation process continues.

“This funding issue is in flux and options are being considered that will make clear Connecticut’s commitment to energy efficiency and renewables and to the innovative financing approaches being developed and implemented by CEFIA,” said a statement from the Department of Energy and Environmental Protection. DEEP Commissioner Dan Esty has said clearly and often that renewable energy and energy efficiency are key parts of its comprehensive energy strategy and has set CEFIA out as a model for eventually weaning renewable energy off subsidies.

“I can tell you that we are working very hard to find a positive solution to all of this,” said CEFIA’s President, Bryan Garcia, who had a staffer at the Capitol Monday monitoring the situation. Garcia said there were some proposals, but declined to elaborate.

CEFIA came into being in July 2011 with a mission to sustainably finance the deployment of clean energy technology as opposed to simply handing out money from the finite ratepayer fund as the old Clean Energy Fund did.

According to Garcia, it has quietly done that — In the last year using $20 million of its ratepayer dollars to bring in $160 million in private investment. “But you have to have money to attract money,” he said. “You need to have a balance sheet to be able to attract these financial institutions.”

Worst case scenario

Garcia said the worst case scenario would not mean going out of business, it would mean focusing on core areas and foregoing others. But several people said the mere possibility that CEFIA could lose a huge chunk of its funding was already causing concern –- especially in the solar industry, now a couple of years into recovering from the boom/bust funding cycle of the old energy fund.

Paul Michaud, executive director of the Renewable Energy and Efficiency Business Association, said as the word got out Monday afternoon, his phone started to ring with nervous solar companies already contemplating focusing more on commercial projects, which are not handled through CEFIA.

“CEFIA is statutorily obligated to develop 30 megawatts of residential solar,” he said. “Raiding the fund for over $30 million will have a substantial and negative effect on CEFIA’s ability to meet that.”

In a statement, Leon Keshishian, East Coast regional vice president for SolarCity, one of the largest national players in the state said: “Connecticut has taken the right steps to build their clean energy economy, create jobs and provide residents and businesses with affordable clean energy choices. Cutting funding to CEFIA would be a huge step backwards.”

Michael Toro, owner of C-Tec Solar called the CEFIA cuts “very concerning.” A four-person company two years ago, the CEFIA model has helped him build the company to nearly 20 employees. “We have plans to do more,” he said. “We want to continue to find ways to support our growth. If residential solar isn’t the way to do it, then we’ll have to find another way.”

Michael Trahan, executive director of the industry group Solar Connecticut said he understood the need to fill budget holes, but added: “I don’t think people who were voting on it understood the harm they were doing to 100 businesses in Connecticut who count on that money,” he said.

While he held out hope for a compromise, he worried the industry would do what it did last time funding dried up, namely, leave. “Who wants to run a business for the next 12 months knowing in month 13 you’ll be falling off the cliff?”

Jan Ellen is CT Mirror's regular freelance Environment and Energy Reporter. As a freelance reporter, her stories have also appeared in The New York Times, The Boston Globe, Yale Climate Connections, and elsewhere. She is a former editor at The Hartford Courant, where she handled national politics including coverage of the controversial 2000 and 2004 presidential elections. She was an editor at the Gazette in Colorado Springs and spent more than 20 years as a TV and radio producer at CBS News and CNN in New York and in the Boston broadcast market. In 2013 she was the recipient of a Knight Journalism Fellowship at MIT on energy and climate. She graduated from the University of Michigan and attended Boston University’s graduate film program.

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