Energy overhaul debate is put on hold

Hartford - Late Monday night, state Senate leaders postponed debate on a massive proposal to overhaul state energy policy, pushing a vote back at least until today and leaving its fate unclear.

But any visitor wondering about the scope and import of the bill needed search no further than the crowds of lobbyists, activists and aides clustered in the marble hall outside the Senate chamber.

The attempt to make the most sweeping changes in Connecticut's electricity markets since their deregulation in 1998 has provoked an aggressive show of force by power companies, business interests, environmentalists and advocates for consumers, the elderly and the poor.

Swarms of lobbyists monitored the progress of the reform bill as Sen. John Fonfara, D-Hartford, and Rep. Vickie Nardello, D-Prospect, the co-chairs of the Energy and Technology Committee, made last minute changes to it all Monday afternoon.

And, as in previous days, they swarmed lawmakers and their aides whenever they emerged into the corridors, arguing the cases of the consumer groups who believe the reform will help drive down rates and spur renewable energy development, or of the industry groups who think it will cut into the profits of energy retailers, raise rates and kill jobs.

Fonfara was tired - he stifled a sudden involuntary yawn during an interview in the hallway outside the Senate Republican caucus room - but confident that the bill he has assembled with Nardello over the objections of Republicans and many powerful industry voices will eventually become law.

"This is a darn good bill, and I hope the governor listens to the debate tonight," Fonfara said Monday evening. "For the first time we're taking steps to reduce rates and build a clean energy economy, through solar, wind and hydro."

Despite making changes to address the concerns of Gov. M. Jodi Rell's administration and current regulators, the core principles of the bill remain, said Nardello.

Meanwhile, Republicans have denounced what they argue is the secrecy of the bill's construction.

Opposing the bill in its current form are, among others, the two utilities, Connecticut Light & Power and United Illuminating, the Connecticut Business & Industry Association, and a host of small electric retailers who have entered the market to offer competition to CL&P and UI, and now claim to serve more than 300,000 customers in the state.

But a coalition of supporters of the proposal, including consumer advocates, the AARP and owners of renewable energy start-up firms, rallied in favor of the bill, saying it would lower rates for Connecticut consumers and redress some of the unintended effects on consumers from the deregulation bill the General Assembly passed in 1998.

"It is those people who are opposed to the bill that fed us the lies" that helped pass the deregulation bill, said Tom Swan, the executive director of the Connecticut Citizen Action Group, which supports the reform package. "If you liked their lies the last time around, you're going to love the lies they're coming up with this time."

Those who helped shape the bill also include state officials, including representatives from the office of Attorney General Richard Blumenthal and from the Office of Consumer Counsel, a nonpartisan agency that represents the interests of utility customers.

The pushback from the Rell administration has been quiet but forceful.

Rell budget chief Robert L. Genuario and Department of Public Utility Control Chairman Kevin DelGobbo wrote last week to object to an earlier draft of the legislation, prompting Fonfara and Nardello to agree to some changes. They included a rewrite that would direct the state's Connecticut Energy and Technology Authority to study whether market rules at ISO-New England, the nonprofit operator of the state's transmission system, help drive up rates for Connecticut customers, and whether the state would benefit from pulling out of ISO-New England altogether.

The two administration officials were not appeased, however, and issued a second memo on Monday that details their continuing objections to the bill. Among their concerns are added costs to ratepayers from proposed incentives for solar power generation, and the additional risk that would be borne by utilities if they are allowed more flexible to structure their own power purchases on the open market, rather than buying through the so-called "middlemen" who currently assemble power contracts for the utilities and charge a premium in exchange for bearing risk.

Supporters of the bill believe utilities can make more cost-effective purchases on their own - cooperatives like the Connecticut Municipal Electrical Energy Cooperative already do this, Fonfara notes - while critics note that bad investments by the utilities could lead to losses that they would then try to recoup from ratepayers.

"The Administration can accept a number of these provisions as well intended; however we believe that the provisions of this proposed legislation passes the tipping point which place the Connecticut's ratepayers at risk for increased costs," DelGobbo and Genuario wrote on Monday.

In the memo, the two also object to the proposed reorganization of the DPUC and say some of the proposed restrictions on marketing practices by retail energy companies could adversely affect those businesses, though the memo does not say which restrictions they find objectionable.

Genuario and DelGobbo included a worksheet with their memo outlining the potential costs of the solar generation incentives and other benefits in the bill, arguing that the costs could rise anywhere from $76 million to $200 million.

But in a response Monday evening, representatives from the advocacy groups Environment Connecticut and Clean Water Action slammed those estimates, saying the administration had completely ignored provisions of the bill meant to cap the costs of the incentives, and drastically overstated the possible costs of the programs.

"They regurgitated the utilities' talking points," said Christopher Phelps of Environment Connecticut.


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