Energy Efficiency Fund

Connecticut's original electric-industry restructuring legislation (Public Act 98-28), enacted in April 1998, created separate funds to support energy efficiency and renewable energy.* The efficiency fund is known as the Energy Efficiency Fund, and the renewables fund is known as the Connecticut Clean Energy Fund (CCEF). The mission of the Energy Efficiency Fund is to advance the efficient use of energy, to reduce air pollution and negative environmental impacts, and to promote economic development and energy security.

The Energy Efficiency Fund is funded by a surcharge of $0.003 per kilowatt-hour (3 mills per kWh) on Connecticut Light and Power (CL&P) and United Illuminating (UI) customers' electric bills. Each of the two utilities administers and implements efficiency programs following the comprehensive plan approved by the Connecticut Public Utilities Regulatory Authority (PURA). The utilities develop their plans with advice and assistance from the state's Energy Conservation Management Board (ECMB). Additional sources of funding for the Energy Efficiency Fund include the Regional Greenhouse Gas Initiative (RGGI), the Forward Capacity Market (FCM), and Class III Renewable Credits,**

The utilities are authorized to implement the following types of programs: (1) Conservation and load-management programs, including programs that benefit low-income individuals; (2) research, development and commercialization of products or processes which are more energy-efficient than those generally available; (3) development of markets for such products and processes; (4) support for energy-use assessment, real-time monitoring systems, engineering studies and services related to new construction or major building renovation; (5) the design, manufacture, commercialization and purchase of energy-efficient appliances and heating, air conditioning and lighting devices; (6) program planning and evaluation; (7) indoor air-quality programs relating to energy conservation; (8) joint fuel-conservation initiatives programs targeted at reducing consumption of more than one fuel resource; and (9) public education. A limited percentage of the fund may be used for non-electric projects, such as furnaces and boilers for low-income residents. Preference is given to projects that maximize the reduction of federally mandated congestion charges. For details on Energy Efficiency Fund programs, savings and expenditures, see the fund's most recent annual report for 2013.

Connecticut's municipal electric utilities are not covered by the Energy Efficiency Fund, but they are required to establish a fund to provide renewable energy, energy efficiency, conservation and load-management programs (Conn. Gen. Stat. § 7-233y). A surcharge is imposed on the customers of electric municipal utilities according to the following schedule: 1.0 mill on and after January 1, 2006; 1.3 mills on and after January 1, 2007; 1.6 mills on and after January 1, 2008; 1.9 mills on and after January 1, 2009; 2.2 mills on and after January 1, 2010; and 2.5 mills on and after January 1, 2011. Municipal electric utilities must adopt a comprehensive plan for the expenditure of the monies collected, and the plans must be consistent with the comprehensive plan of the ECMB.

Furthermore, companies that distribute natural gas must develop a gas-conservation plan, with assistance from the ECMB, and programs to implement the plan. These plans are financed by a flat amount negotiated with and ordered by the PURA.

* Connecticut's restructuring legislation also created a systems benefits charge to fund public education, weatherization and conservation measures for low-income residents, storage and disposal costs for spent nuclear fuel, and post-retirement costs for decommissioned nuclear reactors.

** Class III renewables include electricity savings from conservation and load management programs that started on or after January 1, 2006. See Connecticut's Renewables Portfolio Standard entry in DSIRE for more information.