Connecticut’s high-quality energy efficiency programs help many businesses save money, improve their bottom line, create new jobs that pay well, and compete locally and nationally. Last year alone, over 6,000 in-state businesses benefited from these crucial programs.
Helping businesses cut costly energy waste also helps grow Connecticut’s economy, as each $1 spent by these energy efficiency programs produces $7 in economic growth. That’s an unparalleled return on investment for the Nutmeg State.
Unfortunately, Connecticut took a major step backwards on efficiency near the end of last year. Under extreme fiscal pressure, the General Assembly diverted $127 million in ratepayer funding for efficiency, possibly sacrificing a long-term economic boost of approximately $889 million.
Connecticut now risks falling behind nearly all other states in New England, as most states in the region have achieved more ambitious energy savings targets or are on track to do so by 2019. Connecticut also risks leaving its businesses without good efficiency solutions, making its economic recovery even harder.
The decision to raid energy efficiency funds leaves many businesses in Connecticut concerned.
One such business is Watson Inc, a food manufacturer based in West Haven that employs 300 Connecticut residents. Three years ago, a group of Watson employees volunteered to be on an energy efficiency and sustainability team. With help from the energy efficiency programs, the team developed and executed a plan that led to a 20% reduction in electricity and gas usage.
They also replaced all lighting with LEDs, installed a new properly-sized air compressor, removed many inefficient dust collection systems, and replaced 20 out of 30 air conditioning units with more efficient models. After completing a steam trap survey, they replaced or repaired many components in the high-pressure steam and boiler system. These improvements helped save the company money while reducing its demand on the energy grid.
Another business, Trifecta Ecosystems, Inc., a start-up aquaponic technology and indoor farming company based in Meriden, recently weighed in with the legislature as well. The company described how Connecticut’s efficiency programs helped it immediately capture significant energy savings in a new facility, gain a competitive edge in their new and growing industry, and even hire another full-time employee.
Examples of business support for efficiency abound. Last year, for instance, a number of Connecticut-based companies signed a letter asking the legislature not to divert funds from energy efficiency, as did a national coalition with numerous Connecticut members. More recently Unilever, which has a large facility in Trumbull, shared the following quote to weigh in on the value of investing fully in energy efficiency:
“Unilever believes that energy efficiency is key to keeping businesses like ours thriving. Connecticut will benefit from funding the state’s energy efficiency programs,” said Mark Bescher, Manager of Federal Government Relations and External Affairs at Unilever.
Ball in the legislative court
Legislators and policymakers should consider the repercussions of energy efficiency losses on Connecticut’s business community, as well as its consumers, economy, and environment. These self-inflicted harms include lost jobs, lower economic growth, higher utility bills for ratepayers of all kinds, increased local air pollution, and reduced access to energy efficiency for low-income households.
The good news is that this damage can still be averted if the efficiency fund raid is undone during the current legislative session, which ends on May 9th. Acadia Center will make every effort to restore these vital funds and give our state—and its business community—a chance to achieve a clean and prosperous future.
The energy board’s co-chairs are hoping to convince legislative leaders of the need to restore at least some of the money lost during last year’s budget “raids.” But they know it won’t be easy in this grim budget climate. “I think there’s support for trying to roll back some of the fund raids,” said William Dornbos, a co-chair of the energy panel and Connecticut director for the activist group Acadia Center. “But it’s definitely going to be an uphill battle,” he said.
Read the full article from the Hartford Courant here.
“I do think it would have a devastating effect,” William Dornbos, a spokesman for the energy activist organization Acadia Center, said of early reports that the bipartisan budget proposal would rely in part on taking those energy funds.
“If the proposed severe cuts in energy efficiency and clean energy ratepayer funds happen, Connecticut’s economy, quality of life, and fight against local air pollution and climate change will suffer a major setback,” Dornbos said.
He warned that, Connecticut will immediately start bleeding good-paying efficiency and solar jobs to other neighboring states that are investing more, not less, in these promising economic sectors,” according to Dornbos.
“This will hurt in multiple ways… These ratepayer-funded programs drive in-state job growth and economic activity that put many millions of dollars in tax revenue into the state treasury,” Dornbos said. “Ratepayer fund raids just make state budget deficits worse.”
Read the full story from the Hartford Courant here.
Providence, RI – Since the House Finance Committee released its proposed state budget, energy and environmental organizations have expressed serious concerns about the dangerous precedent that the House will set if their budget is enacted. The proposed plan would raid $12.5 million from ratepayer funded, cost-effective energy efficiency programs. Groups emphasize that these are not state funds, they are rate-payer funds collected specifically to bring much-needed energy savings to all Rhode Islanders. Diverting the funds from the efficiency programs will cost Rhode Island ratepayers more money.
Nonprofit organizations Acadia Center and People’s Power & Light (PP&L) are urging state representatives to support an amendment deleting Budget Article I, Section 16, in the Fiscal Year 2018 budget now before the General Assembly. Over thirty organizations and individuals – representing business, community, consumer, low-income, public health, environmental, and clean energy interests – signed a letter to the General Assembly vigorously opposing the raid. This letter highlights that by diverting ratepayer funds, the proposed budget is in effect taxing consumers for the use of their energy instead of using those funds to secure consumer savings.
“Imposing a new energy tax would be extremely unfair to Rhode Island’s already burdened ratepayers, who have been promised tangible benefits in return for their efficiency funding,” said the letter.
The letter goes on, “Rhode Island’s energy efficiency programs generate immense economic value for the state. They bring millions of dollars in electricity and natural gas bill savings to all our residents and businesses, drive our growing clean energy economy, help low-income families reduce the difficult burden of high energy costs, and protect the health and prosperity of our local communities. Rhode Island’s Least Cost Procurement law – first implemented a decade ago and extended another five years in 2015 – is primarily responsible for the state’s continued leadership on economic efficiency. The General Assembly has unanimously recognized that the electric and natural gas distribution utility must invest in the lowest cost energy resource, energy efficiency, before more expensive energy supplies from outside Rhode Island. This is an economic strategy, not a social benefits program.”
“Given that saving energy costs less than buying it and it creates far more jobs than making energy from imported gas and oil, it seems weird to tax energy consumers. There must be better ways,” says Larry Chretien, Executive Director of People’s Power & Light.
Recently the Office of Energy Resources released a report showing the importance of efficiency to the state’s economy. The report shows that clean energy jobs have grown 66% since 2014. In addition, according to the Energy Efficiency & Resource Management Council’s 2016 annual report, “Every $1 million invested in this sector leads to the creation of 45 job-years of employment, and every $1 invested boosts Gross State Product by $4.20.”
“Rhode Island’s ratepayer-funded energy efficiency programs have provided $2.3 billion in economic benefits to residents and businesses since 2008, a fourfold return on investment,” said Erika Niedowski, Policy Advocate at Acadia Center. “Rhode Island has worked hard over the last decade to become a national leader on energy efficiency, and diverting these funds would cost ratepayers money and represent a big step backwards for our economy.”
As the House members prepare to vote today, Acadia Center, People’s Power & Light, and numerous local organizations and constituents are urging state representatives to delete Budget Article I, Section 16 to do right by ratepayers and all Rhode Islanders.
Erika Niedowski, Acadia Center
Larry Chretien, People’s Power & Light
HARTFORD, CT — A budget proposal released late yesterday by Senate Republicans would divert $160 million annually from Connecticut’s award-winning energy efficiency programs over the next two fiscal years—a staggering 64% cut in ratepayer funding levels that would devastate energy efficiency services for all residents and businesses. If enacted, a raid of this severity would cause significant and immediate job losses in Connecticut’s energy efficiency sector, deprive many consumers—especially residents with low or fixed incomes—of their best protection against high energy costs, stall Connecticut’s efforts to reduce carbon pollution and other air pollution, and force the state’s struggling economy to bear the increased burden of costly energy waste and higher grid infrastructure costs.
“This shortsighted budget proposal would effectively end Connecticut’s energy efficiency programs for the next two years, and perhaps beyond,” said Bill Dornbos, Connecticut Director and Senior Attorney at Acadia Center. “Cost-effective energy efficiency is at the center of any modern clean energy strategy, and so this troubling cut would be a needless step backwards for Connecticut, almost certainly crippling the emerging clean energy economy that will be so crucial to our future.”
Evaluated annually for cost-effectiveness by state regulators, Connecticut’s energy efficiency programs, also known as its Conservation & Load Management programs, have produced significant economic, public health, and environmental benefits for almost two decades now. Energy efficiency investments made in 2016, for instance, will save consumers approximately $961.8 million in lifetime bill savings, meaning every $1 invested in energy efficiency will save another $3.89 on utility bills. Energy efficiency, which replaces imported fossil fuels with in-state labor, also creates local jobs, and the 2016 investments alone generated approximately 12,000 jobs in Connecticut’s energy efficiency sector. The 2016 investments will also help protect public health and the environment, reducing carbon pollution by 3.3 million tons, SOx pollution by 2,916 tons, and NOx pollution by 1,556 tons.
“Labeling these productive energy efficiency investments as ‘taxes currently paid on energy bills’ does a real disservice to the thousands upon thousands of people and businesses that they help each and every year. This funding is how the state’s utility companies procure the lowest-cost energy resource, efficiency,” said Dornbos. “The irony here is that raiding these electric ratepayer funds for the General Fund deficit actually does create the very electricity tax that some claim as the justification for this harmful proposal.”
For more on the performance of Connecticut’s energy efficiency programs, please see the most recent Annual Legislative Report issued by the Connecticut Energy Efficiency Board. Acadia Center currently serves as the Vice Chair of the Energy Efficiency Board and has been an appointed member since the Board’s creation in 2000.