State sued over 2017 clean energy funding sweeps

Hartford — Consumer advocates, environmentalists and energy businesses united to sue the state Tuesday for what they called an unconstitutional seizure of $155 million in ratepayer funds to plug last year's budget gap.

The group's lawsuit claims the October sweep of ratepayer funding intended for clean energy and efficiency programs already has killed jobs and hurt the state's efforts to boost renewables and reduce carbon emissions.

The lawsuit notes the energy programs, funded through portions of ratepayers' electricity bills, reduce the state's electricity demand, stabilize the energy grid and help residents finance home improvements, including solar installations. Customers of municipal utilities, including Groton Utilities and Norwich Public Utilities, were not affected by the sweep because they don't pay into those funds.

"We all should be worried when the state uses its extraordinary powers and literally takes and diverts funds held in private bank accounts of utilities to subsidize the general fund coffers," said attorney Stephen J. Humes of Holland & Knight, one of the firms filing the litigation, in a news conference in Hartford.

The plaintiffs also contend the sweep illegally turned nonprofits and charitable organizations into taxpayers, since their electricity bills' contribution to energy funds will now head to the general fund.

Gov. Dannel Malloy, Comptroller Kevin Lembo and Treasurer Denise Nappier are named as defendants.

Malloy, who signed the budget deal in October but opposed the sweeps, issued a statement saying the lawsuit "should come as a surprise to no one."

"I have long maintained that these shortsighted sweeps would increase energy costs for consumers and businesses and could cause untold harm to our green economy," Malloy said.

Tara Downes, a spokeswoman for the Comptroller's office, deferred to the state attorney general but offered a statement from Lembo urging the state to "uphold its commitments to clean energy investment and innovation."

"Connecticut is a leader in clean energy production," Lembo said. "Unpredictability is an enemy of economic development and growth."

Jaclyn Severance, spokeswoman for the attorney general's office, declined to comment beyond noting the office would "review the complaint and respond appropriately in court."

David Barrett, spokesman for the Treasurer's office, declined to comment because it was pending litigation.

The lawsuit comes about a month before the funds were scheduled to be transferred, the plaintiffs said; they pushed for utilities to instead hold the ratepayer funds in an escrow account.

Mitch Gross, a spokesman for Eversource, said Tuesday evening that, "As a company rule, we don't comment on pending litigation, especially as this is a lawsuit by third parties against the state."

The lawsuit claims if the funding sweep is upheld, almost 13,000 homes will miss out on energy assessments, weatherization upgrades and energy bill savings in 2018. The groups estimated the sweep jeopardized more than 6,800 jobs; they note that the U.S. Department of Energy estimated last year that the state's efficiency programs have created close to 34,000 jobs.

The impacted funds included Conservation & Load Management, the Regional Greenhouse Gas Initiative and the Clean Energy fund. Lawmakers last week restored $10 million to Conservation and Load Management, "leaving $145 million still being wrongfully converted for general revenue purposes," the lawsuit claims.

The plaintiffs are the Connecticut Fund for the Environment; Fight the Hikes; Connecticut Citizen Action Group; Energy Efficiencies Solutions LLC and its founder Leticia Colon de Mejias; Best Home Performance of CT LLC; New England Smart Energy Group LLC; CT Weatherproof Insulation LLC; Bright Solutions LLC and its principal Jonathan Casiano; Energy ESC LLC and its owner Steven Osuch.

b.kail@theday.com

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