Energy Efficiency Programs Cost Criticized

By Lynn Doan, Courant Staff Writer

Consumers and businesses would lose out on free energy audits and rebates for power-saving projects under a draft decision by state regulators that would cut the proposed budget for efficiency programs.

At a time when consumers are looking for ways to reduce electricity use and politicians are pushing for more energy-saving programs, Connecticut Light & Power and United Illuminating say they may have to halt the programs this year because of budget constrictions mandated by the state Department of Public Utility and Control.

The DPUC has approved a total of $110 million for energy efficiency programs administered by CL&P and UI — $13.8 million more than last year. But the companies have to make up for $37.5 million they overspent last year. They also said they expect to overspend the budget again this year because of the programs' growing popularity.

CL&P has warned that it will have to immediately shut down most of its efficiency programs if the proposed program budget is made final.

UI officials said that funding for many of its programs could also dry up later this year.

In a draft decision issued last month, the DPUC said that last year's overspending by the two utilities was "unsupportable and unsound fiscal policy that the department will not allow or otherwise authorize."

The agency refused to raise the charges on customers' electric bills to generate more funding for the program.

"The rationale is not to spend more than you're taking in because the ratepayer is paying for this," DPUC spokeswoman Beryl Lyons said. "The bottom line is we are responsible to the ratepayers. That's our function in life. And we would like them to rein it in."

UI customers would have had to pay an extra 25 to 30 cents a month if the agency had approved the budget proposed by the company, said Patrick McDonnell, who directs the UI program.

CL&P, which has acknowledged that the company "overcommitted" last year's budget, still plans to urge the DPUC to increase next year's program budget during a meeting today. The agency is expected to issue a final decision next week.

Legislators and environmental advocates have backed CL&P, saying that reducing the proposed funding for the program would also reduce the program's benefits.

"It's good for the economy. It's good for jobs. It's good for global warming," said Jessie Stratton of Environment Northeast, a regional environmental advocacy and research organization with offices in Connecticut. "It's just a very good thing, so it's not bad to overspend."

Energy efficiency programs have become increasingly popular as energy prices continue to rise, CL&P spokesman Mitch Gross said.

The number of low-income customers who had their homes weatherized through the program climbed from 10,481 in 2006 to 11,244 in 2007, he said. The number of businesses that received rebates for completing energy-efficiency projects rose by 420.

And more than 5,000 customers received free home energy audits last year, which included some repairs to make their systems run more efficiently.

In a filing with the DPUC, CL&P said it has attempted to "rein in" spending, "but still finds itself at a point where dramatic programmatic cuts will need to be made."

The program is funded by a variety of sources, but two surcharges on customers' bills, expected to total $110 million this year, pays for the bulk of it.

In a letter to the DPUC, House Speaker James Amann, D-Milford, and Majority Leader Christopher Donovan, D-Meriden, urged commissioners to consider the "overwhelming benefits" of such programs.

"The spike in cost is directly related to the increase in demand for the programs which should be encouraged and not penalized by eliminating programs," they wrote.

But State Rep. Steve Fontana, D-North Haven, co-chairman of the legislature's energy committee, said the state "simply can't permit them to just blindly go and spend money that they don't have.

"We believe in what they do, but we also believe in doing it the right way."