HARTFORD, CT — Solar energy system installers, environmental advocates, and clean energy business owners were more than critical Monday of a last-minute decision by legislative leaders to balance the state budget by sweeping three clean energy funds.
Sources close to negotiations say the proposal includes taking $50 million a year from the energy efficiency fund, $27.5 million a year from the Green Bank, and $10 million a year from the Regional Greenhouse Gas Initiative. The depth of those cuts, according to the same sources, remains still fluid.
Bryan Garcia, president and CEO of the Connecticut Green Bank, said if the $27.5 million cut goes through, the Green Bank will be “effectively closed.”
The $27.5 million would mobilize a $185 million investment in Connecticut’s economy. Without that money it’s unable to make any investments and could be found in default of “liquidity clauses” it has for current investments.
Garcia said it means their investors could recall all their loans and their partnerships.
Gov. Dannel P. Malloy said Friday that the investments made by the Green Bank return at least eight times more than the amount the state invests.
“You make that kind of cut and you have a pretty profound impact, pretty quickly,” Malloy said.
Jennifer Arasemowicz, senior vice president and general counsel of FuelCell Energy in Danbury, said they understand these are “difficult times and difficult decisions must be made,” but taking 100 percent of the funding from the Green Bank will have consequences that legislative leaders did not intend.
She said FuelCell Energy’s projects funded by the Green Bank generate sales tax revenue for the state and much needed property tax revenue to municipalities.
She said the 15 megawatt fuel cell project in Bridgeport helped bring private investors to the table and the loan provided by the Green Bank helped pay for construction of the project, which generated sales tax revenue to the state and it brought a previously contaminated parcel back onto the property tax roll.
She said the Green Bank allowed for financing over 10 times the amount of the initial loan and paved the way for fuel cell parks in the United States.
“Taking money from the Green Bank for general fund purposes would be a huge step backward in Connecticut’s economic and energy goals,” Arasemowicz said.
Chris Lenda, of Aegis Solar Energy, which employs about 25 people in Connecticut, is “getting weary of the battles we seem to have to fight in Connecticut.”
He said this budget proposal is just another example of those battles.
He said companies like his rely heavily on the funding for renewable energy in Connecticut.
“Without that funding, companies like mine wouldn’t exist,” Lenda said. “We would leave the state for other states.”
He said it seems like the budget is being built on politics and not any “quantitative analysis of the impact to the state.”
He said it’s the “equivalent of chopping down the apple tree then wondering why there’s not enough apples.”
But it seems to happen every time the state struggles to close a stubborn budget deficit.
A recent analysis by the Acadia Center found that raiding $50 million per year from the energy efficiency fund could cost the state 5,200 jobs and nearly $17 million in tax revenue over the next two years.
The energy efficiency fund is funded by a small charge on electric and natural gas bills. The funds help consumers lower their energy bills.
William Dornbos, executive director of the Acadia Center, said there’s a rumor being spread by some lawmakers that the $50 million per year cut would leave the fund where it was at in 2016.
“That’s just false. It is a reduction,” Dornbos said. “We’ll be doing 25 percent less work than we did last year, which means 25 percent fewer consumers will be able to get the help they need on high energy costs.”
He said utility bills just aren’t the place to balance the state budget.
Malloy called the energy efficiency fund sweep a “bait and switch.”
Rep. Matt Lesser, D-Middletown, who reserved the room for environmentalists Monday, declined to say whether he would vote in favor of a budget that included the fund sweeps.
“A budget is a very large document,” Lesser said.
He said he has to look at the whole thing before making a decision.
“There’s a lot of issues still being negotiated and when there’s a document for me to review, I’ll review it,” Lesser said.
Rep. Jonathan Steinberg, D-Westport, another advocate for these funds, said he understands “it’s hard to be pure” about not sweeping some of these funds based on where the state is in the budget process. It’s October 23, more than four months into the new fiscal year and the state still doesn’t have a budget.
However, Steinberg said lawmakers like him who helped grow these funds are trying to do whatever they can the minimize the damage that would be done with the size of the cuts being discussed.