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Court Challenge Continues To Last-Minute Efficiency Fund Cuts

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A legal battle continues over a legislative move sweeping $165 million from energy efficiency programs into the state’s general fund. A federal judge is expected to decide whether that move was constitutional.

Lawmakers transferred the money in 2017, saying the ratepayer funds were needed to help shore up the state’s massive budget deficit.

But the sweep was criticized as a hidden “tax” on consumers.

That’s because state law mandates consumers still pay efficiency charges on their electric and natural gas bills -- even as those services, including home energy audits, are dramatically scaled back.

In a brief filed last week, efficiency contractors and environmentalists argue diverting the money was unconstitutional. Saying lawmakers broke a contract between the utilities and consumers -- who “no longer get what they paid for.”

“Given the magnitude and brazen nature of the Sweeps, recognized and acknowledged by Legislators, it should come as no surprise that this time Defendants got caught with their hand in the till,” wrote Stephen Humes, a lawyer for the plaintiffs. “The Legislature knew it was stretching the bounds of its authority. It knew it was doing something the likes of which it had never done before.”

As Connecticut Public Radio reported in February, a number of lawmakers have since criticized the cuts to energy efficiency programs, even though they voted for them.

Governor Dannel Malloy, who signed the budget authorizing the cuts, was also critical.

Defense attorneys for the state, in a brief also filed last week, said there’s nothing in the law preventing the legislature from transferring the money. And they argued no enforceable contract exists, noting the state did similar, but much smaller, transfers in 2003 and 2005.

“The only way that the State could be prohibited from transferring money from the Funds into the General Fund is if the State contractually agreed not to do so, which the State has not done,” wrote Philip Miller, an assistant attorney general. “There is no language in any statute that contains such a term. The statutes that created the Funds and set out their purposes are merely policy decisions that can be, and have been, revisited at any time.”

In May, the legislature voted to restore $10 million of the cuts in fiscal year 2019.

A judge is expected to issue a decision in the coming months.

Patrick Skahill is a reporter and digital editor at Connecticut Public. Prior to becoming a reporter, he was the founding producer of Connecticut Public Radio's The Colin McEnroe Show, which began in 2009. Patrick's reporting has appeared on NPR's Morning Edition, Here & Now, and All Things Considered. He has also reported for the Marketplace Morning Report. He can be reached at pskahill@ctpublic.org.

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