Energy legislation needs work, but solutions are in sight

When SB 1560, An Act Concerning Connecticut’s Economy, Electricity Affordability and Business Competitiveness and Establishing the Connecticut Energy Procurement Authority and the Green Bond was posted, it raised eyebrows.

It’s not often a comprehensive 80-page energy bill is introduced in a committee other than Energy & Technology.

The bill creates the Connecticut Energy Procurement Authority (CEPA), charged with taking over the buying of electricity, a function performed by our utilities. Also created is a Green Bond fund to pay for parts of electricity bills currently funded by ratepayers.

The complexity of energy markets is daunting, but it’s important to note that there are processes, called dockets, in which all the players get a chance to participate equally. That due process is vital. It minimizes favoring one interest group over another.

SB 1560 needs work in that area. From testimony posted on the CGA’s website, it clear that many of the bill’s proposals caught energy stakeholders off guard.

For example, if you put solar on your house or business, you are compensated for that, just like a power plant. And on really sunny days, unlike a fossil fuel plant, you’re putting 100% clean electricity into the grid. SB 1560 would drastically reduce that compensation for solar, just when grid-helpful solar with battery backup installations are increasing.

Solar vendors testified the change would wipe out the solar industry in Connecticut. The exodus of those businesses, jobs, and tax revenue from the state is in no way a positive. There’s a docket currently underway examining solar compensation. Let’s allow that to play out.

Another change proposes redefining nuclear power as renewable energy. To be clear, this won’t suddenly make spent uranium fuel rods unspent. But it will take funding away from true renewables that are cheaper in the long term.

Ironically, for legislation promoting cost reductions, the solar and nuclear sections will save little, if anything, in the short term, and likely increase costs long term. Similarly, a section to reduce high demand charges to businesses would simply spread that among other ratepayers.

Tasked with electricity procurement, CEPA, according to the Connecticut Office of Consumer Counsel, is not obligated to follow the Uniform Administrative Procedures Act, which means “… both participants appearing before it and ratepayers are not guaranteed due process.” Further, CEPA can accept monetary gifts. It’s worth contemplating how sizable donations might influence CEPA’s politically appointed directors.

CEPA would use bonds to fund some of the combined public benefits programs. This could work if done with care. But as written, there are safeguards that are missing. Concerns raised by OCC’s analysis articulate situations that could require ratepayers to “… cover costs of the new programs in addition to the current costs ratepayers pay for on bills.”

OCC points out they’ve already “… evaluated different potential revisions to our current procurement laws and processes…” in collaboration with the Public Utilities Regulatory Authority, the Energy & Technology Committee, and other stakeholders. If legislators elect to go with a CEPA type entity, OCC has recommendations, one of which places it under the auspices of PURA or the Dept of Energy & Environmental Protection. This would continue necessary oversight on behalf of all ratepayers.

Legislators voted SB 1560 out of the Finance, Revenue & Bonding committee, making clear it needs to be improved. They want to prudently address high utility rates. The OCC’s expertise is in understanding how to best put that in play.

Let’s put their guidance to work.

Andy Bauer is a member of the Town of Portland’s Clean Energy Task Force.