Last-Minute Cuts Equate To Hidden Tax On Your Utility Bill
Connecticut’s new budget will move tens of millions of dollars out of energy efficiency programs, sweeping that money, instead, into the state’s general fund. It’s a piece of legislative math aimed at shoring up a multi-billion dollar budget deficit. But the decision will directly impact ratepayers and put energy contractors around the state out of work.
Right now, if you’re an electric or gas customer with United Illuminating, Eversource, or several other providers, you pay a small charge every month on your bill.
It’s usually a few dollars. Money which is supposed to go into “public benefit” programs like the Connecticut Energy Efficiency Fund, which just got its budget slashed by about $130 million over the next two years.
That pool of money was set up by the state to reduce your energy consumption. Utilities contract with local companies to do energy audits in your home or business. The program also includes rebates for thermostats or furnaces and it includes financing.
“Really anyone who uses electricity is paying into this fund,” said Bill Dornbos, director of advocacy for the Acadia Center and also Vice Chair of the Energy Efficiency Fund. “And same goes for anyone who is using natural gas to heat their home or their business - they’re paying into this fund.”
But instead of that money going back to consumers as it was intended, legislators decided in their October budget to slosh that money into the state’s general fund.
“To be very clear these are ratepayer funds that are being used to plug a hole in the state budget deficit,” Dornbos said. “Many of us have worked very hard to try to prevent that from happening because we don’t think that ratepayers should be looked to as a remedy for state fiscal problems.”
“We’ve created a tax without telling people we’ve created a tax. That’s not wise,” said Senator Gary Winfield, co-chair of the state’s Energy and Technology Committee.
Winfield voted against the budget. In part, he said, because of its clean energy cuts.
“I wasn’t in the room, but I think a lot of the things that got targeted, got targeted because we could,” Winfield said. “Because, as a body, we made a choice not to raise revenue -- and that limited our choices in the budget.”
And meant other efficiency funds took a hit.
About $20 million from the Regional Greenhouse Gas Initiative, or RGGI, will be swept into the general fund over the next two years. And about $28 million from the Connecticut Green Bank.
“That’s a really significant chunk of funding,” said Dornbos. “That can help reduce utility bills, but also drives a whole bunch of economic growth and job growth.”
Except when the money suddenly vanishes.
“I just hired two new teams last month. Without knowing that the budget cuts were going to occur,” said Stephanie Weiner, who owns the the New England Smart Energy Group.
Weiner’s business does energy efficiency work -- one of dozens of contracting businesses drawing from this now-slashed funding pool.
“That’s because we had gotten a lot of new business. So it kind of came as a great surprise to us,” Weiner said. “I would have never done that.”
Weiner and other efficiency contractors like Leticia Colon de Mejias said the funding raids blindsided them, equating to a huge momentum drain on their business.
Colon de Mejias, owner of Energy Efficiencies Solutions, said she’s already started layoffs. And ultimately, she said she may cut between half to 75 percent of her 30 person staff.
But she said it’s not just about jobs.
“It’s also about the impact to the ratepayer that paid all this money on their electric bills and their gas bills to help reduce their consumption,” Colon de Mejias said. “So, obviously, I’m very much worried about my business and I really care and I’m worried about my employees, but I also think it’s a true loss to Connecticut.”
Bill Dornbos agreed. He said the legislature’s decision means jobs and energy savings will go away. And that the legislature undermined years of clean energy work.
“It’s tremendously frustrating, and disappointing and sad. Because the moment is now to be doing more on energy efficiency -- and we’re actually taking a step back,” Dornbos said.