(Updated) After threatening to veto the securitization plan proposed by the Finance Committee, Republican Gov. M. Jodi Rell instead offered to borrow $953.4 million in Economic Recovery Notes to help resolve the biggest part of the 2011 budget deficit.

“Mine is not a securitization plan, and that’s a good thing,” Rell said. But she also admitted that there are groups that won’t be happy with how she pays for the borrowing in her plan.

Instead of securitizing—a financial maneuver by which the state sells future revenue streams for pennies on the dollar—over 10 years, Rell’s latest plan borrows about $953 million in Economic Recovery Notes—bonds backed by the state—over seven years

While it isn’t exactly a securitization plan Rell didn’t dodge her responsibility in finding a revenue stream to pay for the borrowing.

Rell said she will pay off the Economic Recovery Notes by using a portion of a surcharge on electric bills and taking 50 percent of the Clean Energy and Renewable Energy funds.

Rell said she used a much smaller portion of the surcharge on electric bills than the Finance Committee. She said her proposal only takes about 23 percent of the surcharge, while the Finance Committee took 56 percent.

Regardless, of who took what percentage of the surcharge, Rell’s proposal like the Finance Committee proposal continues the surcharge that was set to expire at the end of 2010 for Connecticut Light and Power customers, and in 2013 for United Illuminating customers. CL&P customers will continue to see a $2.37 per month surcharge and UI customers will see a $2.99 surcharge on their bills.

“While we appreciate the difficult situation our elected leaders are in, this is still a hidden tax that unfairly burdens only CL&P customers for the next three years,” Tanya Meck, spokeswoman for Northeast Utilities, said Wednesday.

Office of Policy and Management Undersecretary Michael Cicchetti said that initially CL&P customers will pay more, but UI customers will be asked to pick up a greater portion of the surcharge toward the end of the seven year period.

But it’s not only the utility companies that are upset with the proposal., environmentalists are upset too.

“It’s hard to say which is worse- the hypocrisy of claiming to oppose putting taxes on people’s electric bills and then proposing to do just that, or gutting programs that are generating new clean energy jobs,” Roger Smith, campaign director for Clean Water Action, said.

Chris Phelps, of Environment Connecticut, said taking money from the two energy funds, especially 50 percent, would be “pound foolish” since those funds are helping create clean energy businesses such as solar installers and fuel cell entrepreneurs. The two funds are estimated to support close to 12, 000 jobs.

Environmental advocates like to point out that those two energy funds allowed the state to leverage state spending and take advantage of a $38.5 million federal stimulus investment.

Under the federal stimulus package Connecticut received $132 million in energy funds, and “I think that really speaks volumes that we‘ve been able to utilize that money,” Rell said. “Could we always have more? Absolutely.“

Raiding the two energy funds won’t cause the state to lose federal stimulus funds because the money will be removed from the funds after the federal stimulus expires, Cicchetti said.

Legislative leaders on both sides of the aisle reserved their immediate judgment on the plan and were waiting for analysis from their budget office.

Majority Leader Denise Merrill said later in the day Wednesday that Rell’s latest plan is “kind of the same choices, just in a different mix.”

“It’s the same batch of bad ideas we had to choose from before,” Merrill said. “The good news is that revenue is increasing and the economy is recovering.”

Since the latest state revenue projections are now expected to increase about $300 million over the next two years, Rell said she doesn’t have to borrow the entire $1.3 billion to plug the 2011 budget hole.

Rell also proposed forming a quasi-public agency to oversee the operations of Bradley International Airport. She anticipated taking $25 million per year from increased revenue and economic activity at the airport to help pay off the Economic Recovery Notes. Creating something like a Port Authority will help generate more economic activity at the airport, which some described as an untapped “gem.”