Senate Leadership
December 21, 2006
Williams, Fonfara Announce Plan for Immediate Relief From Electric Rates and Propose ‘Office of Strategic Power Procurement’
State Senate President Pro Tem Donald E. Williams, Jr. (D-Brooklyn) and Senator John Fonfara (D-Hartford), chairman of the Energy and Technology Committee, today unveiled a plan to bring real, immediate relief from electric rate increases to Connecticut residents and businesses. They also announced plans for the creation of an independent Office of Strategic Power Procurement to buy electricity directly from generation sources, resulting in significant savings for ratepayers in the long-term.
As of January 1st, Connecticut Light and Power customers will have seen an overall increase of 30 percent. United Illuminating customers' rates will go up 50 percent.
"It is clear that part of this problem is beyond the state's control," Sen. Williams said. "But there are investments we can make to provide both short- and long-term help for families and businesses-real measures that have a real and sustained impact. Investing in solutions to our energy problems is critical. But we have to be sure that dollars are wisely invested in actual solutions, not one time giveaways that have no lasting effect. Under these proposals, for an investment of $59 million, we will provide savings of $245 million in the first year," he said.
Sens. Williams' and Fonfara's measures for immediate relief for electric ratepayers will:
- Increase by 50% the CT Energy Efficiency Fund (to $32.5 million):
- In 2005, customers of CL&P and UI contributed $65 million through a conservation charge on their electric bills, and every $1 invested in conservation yields a $4 return in future lifetime savings.
- Incentives will be offered to increase efficiency of oil and gas heating systems for residential and business use.
- This investment will save a minimum of $130 million.
- Implement an ENERGY STAR Sales Tax Exemption for certain appliances:
- Applicable to refrigerators, dishwashers, clothes washers, air conditioners, furnaces, heat pumps, and central air conditioners.
- Total Cost (Revenue Loss): $20 million.
- Investment yields more than $91 million in savings each year (based on average appliance cost of $400, and average energy savings of $110 per year).
- Freeze the Sales Tax on electric bills for businesses.
- Currently, certain businesses that pay over $150 in electricity costs per month also pay sales tax.
- Freeze (recalibrate) Public Service Utility Tax on gas and electric bills for residents and business.
- Provide incentives for homeowners to upgrade boilers and gas furnaces to increase efficiency and save energy
- Allocate $5 million to Operation Fuel
- Operation Fuel is a private, non-profit statewide program that provides emergency fuel assistance to low income, elderly, and disabled households that are not eligible for energy assistance from state funded programs.
- Reduce lighting costs for low-income residents
- Provide efficient lighting for low-income residents who currently receive assistance through the Low Income Home Energy Assistance Program (LIHEAP). Cost: $1.5 million.
- Saves $24 million in the first year.
- Promote on-site generation of electricity for major commercial and industrial users.
Sen. Williams noted that in addition to short-term measures, he and Sen. Fonfara are proposing the creation of an independent Office of Strategic Power Procurement to purchase power directly from generation sources. "Currently, the companies providing power to Connecticut residents and businesses purchase electricity from commodities traders who have purchased it from the generators. The significant profit taken by 'middlemen' in this system adds to the price for consumers. When the Office of Strategic Power Procurement buys power directly, savings are passed on to the consumers. We will also address obstacles that hinder business and consumers from access to retail markets," he said.
Other long-term measures proposed by Sen. Williams and Sen. Fonfara include:
- Increase efficiency of existing facilities by 15%, utilizing waste heat
- Offering long-term contracts to generating facilities
- Implementing aggressive time of use rates to encourage peak time savings
- Supporting implementation of smart technologies, such as metering and thermostats
- Establishing incentives (tax credit, direct subsidies) to develop alternative fuels including biodiesel, ethanol and other fuels with a goal of reducing dependence on imported oil by 10% by 2012
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