State Report: Budget Raid On Energy Funds Hurting Connecticut Economy
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.
Viewpoints: How clean energy can help save Connecticut’s budget
As the state’s budget battle continues, debate over cutting costs and raising revenue has not focused on a promising strategy – ramping up clean energy efforts to grow our way out of the budget problem. Deploying solar and increasing building energy efficiency cuts air pollution, reduces energy costs, creates jobs, and stimulates the state’s economy – all while putting more tax revenue in state coffers. We can help plug the budget gap by strengthening our clean energy economy. The two work together.
What we absolutely should not do is raid clean energy funds.
An essential part of Connecticut’s clean energy economy transition is the Regional Greenhouse Gas Initiative (RGGI), a multi-state cap-and-invest system to reduce carbon dioxide emissions from the electric power sector. Through RGGI auctions of carbon allowances, Connecticut has raised and reinvested $160 million in programs that help residents and businesses save money on electricity and heating bills—which means more disposable income to spend.
RGGI fund raids would cause consumers to lose out on significant savings on their energy bills, with every raided dollar costing consumers nearly three more. An Abt Associates analysis shows that by reducing air pollution, RGGI has decreased health impacts and saved lives, avoiding up to $300 million in healthcare costs in Connecticut.
Simply put: if RGGI funds are raided, Connecticut loses.
Similarly, Connecticut’s Energy Efficiency Fund (funded in part by RGGI proceeds) helps support nearly 34,000 jobs in technical fields like home performance and HVAC, and saved $3.5 billion for Connecticut households and businesses over the past decade.
Every dollar invested by Connecticut’s energy efficiency programs saves $3.89 on utility bills. Yet this fund – paid for by ratepayers for their benefit – is raided in the Senate Republican budget proposal still on the table. Sweeping money from these programs is shortsighted and would damage Connecticut’s economy, health, and quality of life for years to come.
Beyond protecting critical energy programs from budget raids, our state legislators and governor should be proactive. Here are four clean energy policies lawmakers and the administration can act on now to aid Connecticut’s fiscal health:
- Reduce state agencies’ energy expenditures. Expanding and extending Connecticut’s Lead by Example program, which lets agencies use future energy savings to finance efficient upgrades to aging facilities, could save about $45 to 60 million every year.
- Set up a full-scale shared solar program. According to Vote Solar, this proven approach can deliver more than 2,500 new jobs, $370 million in local economic benefits, and $80 million in property taxes. Similarly, expanding virtual net metering to help speed solar deployment will save municipalities hundreds of thousands of dollars a year in energy costs—badly-needed funds given the anticipated deep cuts to local aid.
- Allow electric vehicle manufacturers like Tesla to sell cars directly to in-state consumers. Tesla estimates it will generate $12 million in sales tax revenue if allowed to open six stores, and it is willing to pay any shortfall to the state after two years. Acadia Center analysis shows that this benefit would come at no cost to existing dealership jobs. Making electric vehicles easier to buy also helps the state tackle a major source of air pollution—cars and trucks—which causes respiratory ailments, imposing huge medical costs.
- Establish a regional policy to reduce transportation climate emissions while generating revenue for reinvestment. Acadia Center analysis shows that pricing CO2 emissions from the transportation sector could generate hundreds of millions of dollars annually. At a time when the state’s transportation funding is in crisis, these funds could put cleaner buses on the road and build a better-running rail system, improving community access to transportation.
The bottom line: a clean energy economy is one that is strong and growing. Both legislators and the governor have important roles to play in ensuring a forward-looking energy agenda, from robust funding for efficiency programs to an ambitious final Comprehensive Energy Strategy. With Connecticut’s frequent failing grades in both air quality and budget health, the state desperately needs to adopt a clean energy budget for the future.
Claire Coleman is Climate & Energy Attorney for Connecticut Fund for the Environment. Kerry Schlichting is Policy Advocate for Acadia Center.
This op-ed was published in the CT Mirror.
Why raiding Connecticut’s Energy Efficiency Fund is a bad idea
Op-ed by Bill Dornbos and Taren O’Connor in the CT Mirror.
As we try to address our state budget crisis, one option proposed by the Senate Republicans should be off the table: sweeping $136 million over the next two fiscal years from the utility ratepayer-funded Connecticut Energy Efficiency Fund to the state’s General Fund.
The Energy Efficiency Fund generates immense economic value for Connecticut. It brings billions of dollars in electricity and natural gas bill savings to residents and businesses, drives our growing clean energy economy, helps families reduce the difficult burden of high energy costs, and supplies significant state tax revenue by fueling private sector growth. This Fund is a good deal for Connecticut’s consumers.
Fund raid proponents say their proposal is a simple movement of taxpayer funds from a state program to the General Fund, i.e., moving money from one state pocket to another. In reality, this proposal would impose a new energy tax on consumers.
Energy efficiency programs are funded primarily through a small charge on electric and natural gas bills, not by any state taxes. These funds are an investment by utility consumers in energy efficiency programs, a wise investment as these programs save consumers money on electric bills multiple times over the cost of the investment. Redirecting these funds to the General Fund would take money collected from ratepayers for energy efficiency programs and give it to the state — creating an energy tax on ratepayers at the expense of cost-saving, job-boosting programs.
And, if that wasn’t bad enough, the proposed cut is also severe – equal on an annual basis to about one-third of the Fund’s current budget for electric efficiency. A cut of this magnitude would undermine Connecticut’s nationally-acclaimed energy efficiency programs. Since 2010, these programs have generated about 27 billion kilowatt hours in lifetime energy savings—more than the annual generation of the Millstone nuclear power plant. These energy savings equal over $5.5 billion in savings on customers’ energy bills. This is help consumers need.
The Fund raid would rob consumers of energy efficiency’s tangible benefits. The lost bill savings alone would ultimately cost Connecticut’s residents and businesses at least $640 million in lifetime bill savings, and perhaps more, since the proposed sweep would require deep cuts to statewide program services like energy audits for households and businesses, technical assistance to commercial and industrial customers, insulation upgrades, strategic energy management for large energy consumers, and efficient heating and cooling equipment installations.
The impact would fall hardest on the neediest households, which often struggle to manage Connecticut’s high energy costs. Currently, income-eligible residents can qualify for free energy audits and other energy efficiency upgrades. About 12,000 low-income households received program help with weatherizing their homes and reducing their energy costs in 2016. A $136 million cut would put as many as 8,000 low-income households at risk of falling behind on their energy bills, while at the same time imposing a new regressive energy tax that would disproportionately burden this vulnerable population.
A raid of the Energy Efficiency Fund would also cripple Connecticut’s clean energy economy. A 2017 U.S. Department of Energy report found that Connecticut’s efficiency programs created nearly 34,000 jobs. We would see immediate job losses if proposed cuts were enacted. These job losses, combined with lost bill savings, would be felt statewide, as about $930 million in Gross State Product would be lost. That’s new economic growth Connecticut sorely needs.
The proposed raid would also worsen the problem it’s trying to solve, ironically enough. The proposed cuts, and associated job losses, would reduce revenue from state income and sales taxes by about $30 million dollars through FY 2019. And if energy efficiency activity collapses, which is possible due to the cut’s severity, the total tax revenue lost over the next two fiscal years could be significantly more. Turns out, raiding the Energy Efficiency Fund just creates another budget hole.
In the end, a $136 million cut to our energy efficiency programs to help fill an unrelated state deficit will set Connecticut’s clean energy economy back for years and transform a prudent investment with a strong return on investment for ratepayers into a harmful energy tax. We urge the General Assembly to reject this transparent budget gimmick. Connecticut’s consumers deserve better.
Taren O’Connor is an Associate Rate Specialist with the Connecticut Office of Consumer Counsel. Bill Dornbos is the Connecticut Director and Senior Attorney for Acadia Center. Together, they serve as Chair and Vice Chair of the state’s Energy Efficiency Board, but do not represent the Board in this piece.
Forum: We need to reduce energy costs, not tax ratepayers
Op-ed by Bill Dornbos and John Harrity in the New Haven Register.
The Senate Republican proposal to raid ratepayer funds for energy efficiency and renewable energy would decimate successful programs that reduce energy costs for Connecticut businesses and families. But that’s not all. Their proposal would also stifle job growth in the state’s rapidly expanding energy efficiency and solar industries, and it’s about the worst thing Connecticut could do as the harmful impacts of climate change become more apparent every day.
The Senate Republicans’ revised budget would not only divert $68 million annually from Connecticut’s award-winning energy efficiency programs into the General Fund for the next two fiscal years — a major cut that would reduce electric efficiency programs by about one-third — but it would also plunder almost half of the ratepayer funding for Connecticut Green Bank and its renewable energy programs.
In doing so, the Senate Republicans would convert cost-effective investments that save consumers money into a new energy tax on ratepayers to shore up the state’s budget deficit. Every dollar invested in energy efficiency last year produced $3.89 in lifetime savings on utility bills. But this new energy tax would slash that productive investment and then, even worse, cause significant and immediate job losses in Connecticut’s energy efficiency and renewables sectors, crippling these thriving industries at a time when we need to foster local economic growth and job creation to increase state revenues.
These raids also run completely counter to our state’s governing energy strategy, which, wisely, makes efficiency our first fuel source. The benefits of this choice are many and undeniable. Energy efficiency investments made in 2016, for instance, will save consumers an estimated $962 million in lifetime bill savings. Those same investments will also generate approximately 12,000 jobs in Connecticut because energy efficiency replaces fossil fuels imported from out of state with in-state labor. Last year’s investments will also protect public health and the environment by cutting carbon emissions and local air pollution.
The Senate Republican’s proposed budget inflicts even more harm by raiding $26 million annually from the market-based Regional Greenhouse Gas Initiative (RGGI). Unfortunately, the Democrats’ budget also raids RGGI, which reinvests money from carbon emission auctions in the energy efficiency programs and in the Green Bank. This funding was intended to reduce energy costs and speed the deployment of local clean energy, like rooftop solar — and it has worked.
Plus, the Green Bank has leveraged its RGGI funding to help attract tens of millions of dollars in private investment for in-state projects. Manufacturers and businesses helped by these investments have seen reductions in energy costs. And these reduced energy costs mean more competitive Connecticut companies sustaining more jobs for Connecticut workers.
Beyond these economic arguments is the critical concern about undermining our commitment to reducing greenhouse gas emissions. Climate change is the most important issue facing all of us for the rest of our lives. And we are fortunate to live in a state that has provided bipartisan leadership in addressing this issue. Governor Malloy’s recent announcement that Connecticut would remain committed to the standards of the Paris Climate Agreement – despite President Trump’s withdrawal from the pact — is just the latest example of such leadership.
Connecticut’s legislature has mandated ambitious, yet achievable, goals for reducing in-state emissions. Harnessing ratepayer funds to invest in zero-carbon efficiency and renewables is a critical means to achieving those goals. We cannot afford to take a break or divert funds or wait for a good budget year to do this important work. Climate change is real, it is relentless, and it is unfolding more quickly than predicted. And it has a disproportionate impact on the most vulnerable residents of our state, including working families.
Our kids, and their kids – and children around the world – expect and deserve to grow up in a world that is habitable. We must not step back from our responsibility to future generations in a short-sighted and misguided effort to balance the budget.
Protecting ratepayer funds that support energy efficiency and clean energy programs is good for consumers, good for homeowners and businesses, good for workers, good for people who breathe our cities’ air, and good for the climate.
John Harrity is president of the Connecticut State Council of Machinists. Bill Dornbos is Connecticut director and senior attorney at Acadia Center. Both serve on the steering committee for the CT Roundtable on Climate and Jobs (www.CTClimateandJobs.org).
Advocates say cutting Connecticut energy efficiency funds a mistake
William Dornbos, Connecticut director and senior attorney at Acadia Center, said Wednesday that the proposal by Senate Republicans to divert $160 million annually from the state’s energy efficiency programs over the next two years “would effectively end Connecticut’s energy efficiency programs for the next two years, and perhaps beyond.”
“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.” Dornbos said.
The cut being proposed by Republicans represents a two-thirds reduction from current funding levels, he said.
That kind of funding reduction would eliminate incentives available to homeowners to have energy audits done. About 40 companies do the audits around the state, Dornbos said, and “if vendors and contractors have less work, they will begin laying off staff, selling equipment, and losing trained technicians to nearby states with strong, well-funded energy efficiency programs.”
“With previous raids on the energy efficiency programs, we have seen major disruption and job losses in the home performance and efficiency contractor sectors that lingers well past the raids and takes years to overcome,” he said.
Dornbos projected that job reductions attributable to funding cuts in energy efficiency programs could top 12,000 workers in Connecticut. Over time, the cuts might result in the loss of another 28,000 jobs as a result of a reduction in consumers using disposable income created through energy efficiency efforts.
Beyond the jobs that will likely be lost, Connecticut residents of modest means will be more likely to see their energy bills rise if efficiency programs are drastically cut, he said.
“It would deprive many consumers — especially residents with low or fixed incomes — of their best protection against high energy costs,” Dornbos said.
Read the full article from the New Haven Register here.