2007.06.04 Lauds Connecticut General Assembly for Passing Historic Energy Reform Bill Press

For Immediate Release

June 4, 2007

Roger Koontz, 860-227-6004 (cell)
Meg Wilcox, 617-372-9400 X 204, cell 617-319-6457

Environment Northeast Lauds Connecticut General Assembly for Passing
Historic Energy Reform Bill

Legislation Expands Energy Efficiency, Increases Public Transparency in Energy Planning and Formalizes Connecticut's Participation in the Regional Greenhouse Gas Initiative (RGGI)

HARTFORD-Environment Northeast (ENE) congratulates the Connecticut General Assembly forpassing comprehensive legislation that will advance energy efficiency, reform utility incentives to encourage conservation, and bring transparency to energy planning. ENE also applauds Connecticut's participation in the Regional Greenhouse Gas Initiative (RGGI), an agreement to cut global warming pollution from power plants in 10 northeast states.

"The electricity reforms in this bill make historic changes in the way Connecticut utilities invest in energy efficiency and clean energy resources" said Dan Sosland, ENE's executive director. "For too long, we have capped investments in our cleanest, cheapest resource - energy efficiency - and paid utilities to sell more power, not save it. This bill changes both of those out-dated approaches."

Connecticut's new energy legislation increases the state's efficiency resources by requiring utilitiesto invest in all energy efficiency and so called "demand-side" measures that are cost-effective and reliable -- before purchasing new, higher priced power plant contracts. This ground-breaking change could result in a doubling or tripling of energy efficiency and clean resources, which would reduce greenhouse gas emissions, create new jobs, and help stabilize the demand for new energy.

The demand-side measures that electric distribution companies must implement, as part of a comprehensive conservation and load management plan, include load management (i.e, managing energy use to reduce demand during peak times), demand response, combined heat and power facilities, distributed generation and other emerging energy technologies.

To ensure that utilities adhere to this requirement, the legislation establishes a new publicly accountable
energy purchasing board that will include consumers, businesses, environmentalists, andother key stakeholders. The board will ensure that electric and gas utilities purchase energy in a manner consistent with state efficiency, environmental and consumer goals.

The legislation also adopts a full slate of new appliance and equipment efficiency standards and
establishes a new home heating oil efficiency program.

To give proper incentives to utilities to expand their energy conservation programs, the bill ends the era of encouraging utilities to sell more energy by requiring the Department of Public Utility Control (DPUC) to "decouple" utility sales from revenues. Currently, the more energy Connecticut utilities sell, the more money they make; encouraging customers to conserve energy is not in their best interest. Decoupling breaks the link between profits and sales, enabling utilities to become partners in energy efficiency and clean resource investments without losing money.

"By finally eliminating the regulatory financial incentive that encouraged utilities to get customers to
use more energy, and instead require them to invest in all cost-effective efficiency and demand reduction measures, implementation of this bill will result in significantly lower energy costs to Connecticut consumers. Instead of just buying more generation to meet consumers' demands, our utilities will help consumers access more energy efficient products, assure more energy efficient construction and ultimately reduce the need to import and burn ever increasing amounts of expensive fossil fuels," said Jessie Stratton, director of government relations at ENE.

Implementation of RGGI Calls for 100% Auction of Pollution Allowances

The bill formally brings Connecticut into RGGI, which regulates carbon dioxide (CO2) pollution from large power plants in ten northeast states. RGGI will reduce regional CO2 emissions from these plants by nearly 20 percent by 2019. Under RGGI, power plants larger than 25 megawatts that burn fossil fuel must obtain "allowances" or permits to emit CO2 .

Connecticut's bill requires all of its CO2 allowances to be auctioned, rather than given away for free to power generators. The proceeds from the auction of the permits will be invested in energy conservation, load management and renewable energy programs. A small portion, 7 ½ percent will go towards administrative costs and climate mitigation. By requiring its power plants to purchase their allowances rather than be given them for free, Connecticut has chosen to follow the path of New York, Vermont, Rhode Island and Maine in its implementation of RGGI.

"We are delighted that Connecticut has passed this significant, final-hour legislation that will help solve the state's energy woes and cut global warming pollution" said Alice Liddell, policy analyst at Environment Northeast.

The ten states that have officially joined RGGI include Maine, Vermont, New Hampshire, Connecticut, Rhode Island, Massachusetts, New York, New Jersey, Maryland and Delaware. Emissions from all 10 states add up to the seventh largest source of global warming pollution in the world.

Environment Northeast has worked on RGGI since the initiative's inception in 2003, serving as one of 24 stakeholders representing a cross section of environmental interests, industry and academia. ENE helped state officials in the region develop a workable, affordable plan that culminated in the Memorandum of Understanding signed by seven states on December 20, 2005, and later the RGGI Model Rule finalized in August, 2006.

Environment Northeast is a non-profit research and policy organization addressing large scale environmental challenges, such as climate change in the Northeast and eastern Canada with offices in Maine, Boston, Providence and Connecticut.

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