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Groups push to stop state from taking clean energy funds

New Haven — Environmental groups and energy contractors are still pushing the federal court system and state lawmakers to restore more than $145 million in ratepayer funds earmarked for clean energy programs.

The programs — funded through small surcharges on Eversource and United Illuminating customers' utility bills — reduce electricity demand and help residents finance home efficiency improvements and solar installations. But a budget deal signed by former Gov. Dannel Malloy in October 2017 called for sweeping the ratepayer funds to fill budget shortfalls. Energy businesses say the move prompted thousands of layoffs over the last year, and they joined forces with environmental groups and nonprofits to sue the state in May 2018.

On Friday, the groups officially filed an appeal with the U.S. Court of Appeals for the Second Circuit in New York, seeking to overturn U.S. District Court Judge Janet C. Hall's October 2018 ruling that the funding sweep did not impair any contracts between ratepayers and utilities. Hall had argued the groups "have no right to insist that the state of Connecticut spends its revenue on programs that benefit them."

The appeal argues ratepayers have a contractual right to see the surcharges on their utility bills go where they're intended, and that the state's budget move violated Eversource and UI ratepayers' equal protection rights, because customers of municipal utilities — such as Groton Utilities and Norwich Public Utilities — do not pay into the energy programs.

The appeal comes as $67.5 million from the energy funds are slated to be transferred to the state's general fund in June; $77.5 million was already swept last year.

Stephen Humes, co-counsel for the plaintiffs, said the energy businesses and environmental groups "have about 100 years of legal precedent supporting the notion that utility tariffs are enforceable contracts and mean what they say — here that energy efficiency funds and renewable energy funds paid by customers should be spent on their intended purposes. If it's illegal for anyone else to seize millions dedicated for specific purposes, how can the state get away with this deceptive conduct?"

Humes argues the case is the first time ratepayers in the U.S. have argued in court that when they pay their utility bills with surcharges dedicated for specific programs or services, it creates enforceable contracts that cannot be broken by states.

State attorneys arguing before Hall in New Haven in September 2018 said the statute establishing clean energy funding created no expectation or promises that the funds couldn't be pulled for other purposes. The attorneys pointed to instances in 2003 and 2005 in which the state reassigned some clean energy funds.

Roger Reynolds, senior legal counsel for Connecticut Fund for the Environment, said in a statement that there were multiple routes to resolve the matter.

"We are pursuing the legal case, but legislators could take action right now to halt the damage the raids are doing to Connecticut families and businesses," Reynolds said.

While he signed the 2017 budget deal, Malloy had called the budget sweep shortsighted.

House Bill 5030, which would restore the energy funds, has been referred to the legislature's Committee on Energy and Technology.

"Efficiency doesn't just make dollars, it also makes sense," said lead plaintiff Leticia Colon de Mejias, president of Energy Efficiencies Solutions. "Over 380,000 Connecticut households can't afford their energy bills. Energy efficiency has the unique ability to lower these bills, close the affordability gap, protect our planet, protect our health, and improve our living conditions, all while supporting 34,000 local jobs."

Gov. Ned Lamont, in his budget address last month, said he supports "fully funding our clean energy and energy efficiency programs, which have been shortchanged over the last few years. These funds help bring down electricity costs for working families, and they further reduce our carbon footprint."

b.kail@theday.com

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