HARTFORD, CT — The General Assembly adjourned this year without restoring $67.5 million to clean energy funds that had been swept as part of the budget in 2017.
The $67.5 million was part of a larger $145 million in energy fund sweeps the General Assembly approved under former Gov. Dannel P. Malloy to close a budget deficit.
Environmentalists and energy-efficiency businesses pointed out that the legislature and Gov. Ned Lamont could have used the budget surplus to restore some of the funds, but they decided against it and failed to restore them before the session adjourned on June 5.
Hartford Mayor Luke Bronin said Monday that he doesn’t know how to measure how much more progress his city could have made in improving its rankings on a clean energy scorecard if those funds had been available. Hartford was recently ranked one of three “Cities to Watch” in the 2019 City Clean Energy Scorecard because it eliminated all minimum parking requirements in its zoning regulations and mandated electric vehicle charging stations on everything except one, two, and three unit residential housing.
At a press conference Monday outside the Connecticut Science Center, Department of Energy and Environmental Protection Commissioner Katie Dykes credited Lamont with “ending the damaging practice of sweeping the important funds that are contributing to the Connecticut Green Bank and to our award-winning energy efficiency programs across the state of Connecticut.”
Leticia Colon de Mejias, chair of Efficiency For All (EFA) and president of Energy Efficiencies Solutions, has pointed out that “these funds are not tax dollars. When they are not swept they create 1.4% in annual Gross State Product and hundreds of millions more in Connecticut tax revenue, and lower our energy costs.”
Roger Reynolds, chief legal director at Connecticut Fund for the Environment, said the sweeps have forced some clean energy businesses to close and others to lay off staff.
That’s because the decision to sweep the funds — which are collected as a fee on everyone’s electric bills — stopped the flow of revenue to the program in order to balance the budget in 2017.
“You can’t create a sector of the economy by creating these funds and all of a sudden take it away,” Reynolds said Monday.
Reynolds is representing Colon de Mejias, the lead plaintiff in the federal lawsuit.
According to a release from the plaintiffs in March, the industry has been forced to shed 3,000 jobs because of the sweeps.
Colon de Mejias and the other plaintiffs appealed the decision last year to the Second Circuit Court in New York. The two sides have been filing motions and getting ready for oral arguments that are likely to be scheduled in the fall or winter.
The state of Connecticut maintains that it didn’t violate the contract between ratepayers and utilities because one doesn’t exist.
Reynolds said the state interfered with a contract between the ratepayers and the utility companies.
In the 20 years since the General Assembly created the Conservation and Load Management Fund and the Clean Energy Fund, money has been transferred four times to be directed into the general fund.
However, the largest sweep was the most recent one.
Reynolds said the state’s argument seems to be, “I’ve robbed smaller banks in the past so I can rob this big bank now.”
Stephen J. Humes, a partner at Holland & Knight and co-counsel on the case, has also commented on the situation.
“The shameful reality is that the State is defending conduct that — if anyone else in Connecticut tried to do it — would face serious criminal and civil punishment,” Humes said. “If it’s illegal for anyone else to seize millions dedicated for specific purposes, how can the State get away with this deceptive conduct? We look forward to making these arguments at the Second Circuit and await the day when the Court holds the State accountable. It will be an expensive day of reckoning.”
Environmentalists and energy-efficient businesses sued the state, but in October 2018 U.S. District Court Judge Janet Hall found that the state’s sweep of $145 million in ratepayer funds did not impair contracts between ratepayers and their electricity distribution companies because neither utility tariffs nor state law ever promised ratepayers that their dollars would not be transferred to the General Fund for unrelated purposes.