State’s energy efficiency plan comes with higher customer fees

The Department of Energy and Environmental Protection’s release of the state’s first long-term energy efficiency strategy is receiving widespread praise from environmental groups.

And that’s even with proposed increases to ratepayer fees to fund it.

“To me what’s interesting about this document isn’t that it’s finally going to get funding, but all the points in it that show how it’s going to work,” said Roger Smith of Clean Water Action.

“I see it as the end game. It’s been a long time coming,” he said, pointing out — as did others — that energy efficiency commitments in the state, while on the books since 2007, have long suffered from boom-bust funding that has left Connecticut far behind other states.

“Essentially we squandered six years,” Smith said.

Bill Dornbos, Connecticut director for ENE, formerly Environment Northeast, also hailed the plan. “This brings Connecticut in line with national best practices,” he said. “Massachusetts and Rhode Island both have three-year plans.”

And if the Public Utilities Regulatory Authority approves it, so will Connecticut.

“I think as we talk about this as a ramped up commitment to energy efficiency, we should also see it as a refined, more sharply focused and we think smarter approach to energy efficiency,” said DEEP Commissioner Dan Esty, who gave it a rousing sendoff along with his energy deputy Katie Dykes and policy development director Jesse Stratton. “We’re going beyond the traditional focus on efficient lighting or weather stripping to include heating, lighting, air conditioning, ventilation, furnaces, boilers and really all of the systems of a building where there is an opportunity to reduce energy consumption.”

And it’s those details that Smith and others like in particular. He pointed to one part that called for a full marketing campaign to publicize the various aspects of the plan to consumers, another that viewed the range of programs as a job-creating industry and yet another that recommended standards and licensing for home energy professionals.

There are also programs tailored to low-income individuals, apartment dwellers and different types of business and commercial operations with vastly varied energy needs.

“This stuff is absolutely where we need to go,” Smith said.

The plan was more or less telegraphed last year in DEEP’s Comprehensive Energy Strategy — a key focus of which is a greater concentration on energy efficiency. Less demand means a trickle down effect of lower costs for things like congestion charges and the need for older dirtier power plants at peak times.

The particulars call for nearly doubling yearly spending on energy efficiency from $122 million to $231 million for each of the plan’s three years. The money would come from additional fees on electric and gas bills. The Conservation Adjustment Management (CAM) rate on electric bills will double to about $4.50 a month for an average home. The CAM on natural gas bills will nearly triple to about $7 per month during high usage months in winter.

The legislature set the statutory groundwork for those increases in the last session after years of efforts to raise the CAM rates, only to be told by PURA and its predecessor authority that statute did not allow for that.

Consumer advocates have also balked at such increases. But this time Consumer Counsel Elin Katz is on board. “I am very supportive of efforts to maximize cost-effective energy efficiency benefits to Connecticut citizens, as reducing a consumer’s energy usage saves money for that consumer and brings benefits to the electric grid as a whole,” she said in a statement. “We will continue to scrutinize how we spent our energy efficiency money. We need to wring every bit of benefit out of each dollar we ask customers to spend.”

Part of the rationale for the higher fees is that they, as well as the many individual energy efficiency programs, will give energy customers an incentive to take some action to lower their energy demand. Esty and company pointed out that for every dollar spent on energy efficiency, customers get back $3 in reduced bills.

He said that people who have already taken energy efficiency steps and who have to pay the higher CAM fees anyway will still benefit because of the cumulative demand reduction that will result in continuing cost reductions, not to mention cleaner air.

He also said that over time, he expected that financial leveraging through the Clean Energy Finance Authority and private investment will increase efficiency dollars.

“We think everybody comes out ahead here,” Esty said.

Well, almost everyone. Those who heat with oil are still in a bit of a no-man’s land — a situation Esty said “disappointed” him. He laid the blame squarely on fuel oil dealers who fought the idea of a fee similar to CAM to make the cost-sharing more equitable.

Oil customers can still get home energy audits — the cornerstone of the energy efficiency effort — but Esty said: “Over time there needs to be some fairness across different heating sources.” He noted that oil customers are “being given special interest consideration that is unjustified.”

A 30-day comment period on the plan will now begin, including a public session at DEEP offices in New Britain Sept. 10 before PURA rules.