Hidden 'Energy Tax' Set To Go Into Effect Next Week
A last-minute budget move criticized as a “hidden tax” on electric and gas utility customers goes into effect next week. It will take more than $75 million in energy efficiency money collected from consumers and, instead, sweep that money into the state’s general fund.
The ratepayer money was supposed to fund efficiency work, paying for deep discounts on home energy audits, insulation, and other jobs to reduce consumer energy bills.
But legislators passed a law diverting that money, citing a need to plug a state budget deficit.
On June 25, the state is scheduled to make its first withdrawal from the ratepayer-funded account, in the amount of $77.5 million.
Of that money, $63.5 million will come from the Energy Efficiency Fund, according to Bill Dornbos, its vice chair. That money funds programs like Home Energy Solutions, which pays for efficiency and safety work at customers’ homes.
Bryan Garcia, CEO of the Connecticut Green Bank, said in an email, his agency will also pay out $14 million from the Clean Energy Fund next week because of the law.
As Connecticut Public Radio has reported, consumers will continue to pay into the program at the same rates, while seeing significant reductions in benefits.
Several contractors and environmentalists have filed a lawsuit in federal court seeking to overturn the law and return the money. But thus far, any moves to block the upcoming transfer appear unsuccessful.
According to an attorney for the state, the withdrawal and transfer to the state’s general fund needs to happen before Connecticut’s fiscal year closes out on June 30.
In an email, Stephen Humes, an attorney for the plaintiffs, said “the state has indicated that they have no authority to voluntarily stop the transfer of funds unless the General Assembly convenes and changes the law.”
Humes said that’s unlikely, especially with Connecticut’s legislature currently out of session. But he’s hopeful that if a federal judge sides with the plaintiffs, the state would return the seized money.
The lawsuit is expected to take months.
Meanwhile, in an update this month, Energize Connecticut, coordinator of the efficiency programs, reports call volumes to the main info line for their service dropped to the lowest level since the program acquired statewide reach five years ago.