Wind Power

Uncertain Days for Connecticut Clean Energy Fund

Connecticut’s Clean Energy Fund has joined the growing list of Renewable Energy public benefits funds in danger of being raided to help alleviate hemorrhaging state budget deficits.

Hartford, Connecticut – March 10, 2003 [] Gov. John Rowland’s recent budget proposal for 2004-2005 called for revenue transfers that could entirely eliminate that state’s Clean Energy Fund (CEF). Critics contend this would deal a severe blow the state’s Renewable Energy industry, reversing progress toward a more sustainable, cleaner environment. As with similar funds across the US, the CEF’s main purpose is to decrease Connecticut’s reliance on fossil fuels and to promote a cleaner environment. The fund grants monies to businesses to develop cutting-edge clean energy sources such as solar, wind and fuel cells. The governor’s plan calls specifically for US$25 million due to fund the CEF each year to instead be redirected to the state’s general fund in 2004 and 2005. “That it’s going to have a substantial impact on us is probably an understatement,” said Richard Barredo, CEO of the CEF, the quasi-public fund, which reinvests money accrued through a minor surcharge on consumer electric bills into Renewable Energy projects. According to Barredo, the projected revenues for the CEF for 2004 and 2005 are US$21 million and US$29 million respectively – exactly the amount of cuts Rowland has proposed. In addition to the cuts from the CEF, the proposal also calls for the entire US$84 million per year expected to come into the Energy Conservation and Load Management Fund (ECLM) to be deposited into the state’s general fund. The ECLM likewise generates money through a surcharge on consumer and business utility bills and reinvests the money through grants to individuals and businesses aimed at helping them become more energy efficient. Anticipating backlash, the governor’s proposal said a number of things should be considered in light of the proposed CEF funding cuts. “It is not a question of being against promoting energy conservation, promoting renewable or clean energy, or funding housing or economic development programs. It is a question of whether we can afford to do those things during this fiscal crisis.” There is little doubt that Connecticut is staring down a massive budget deficit and will have to make some unpopular decisions, but some question whether curtailing funds for economic development in the state is the most prudent way to patch budget holes. “It’s a short-sighted plan driven by desperation, but at the same time it cripples the industry for years to come,” said Joel Gordes, a consultant with Environmental Energy Solutions, a company that helps businesses and individuals cut energy costs through efficiency improvements. “This is where the future is built. They call Connecticut the fuel cell state but without that sort of an investment toward the future, the revenues will be seriously affected.” The proposal says that, “Before the criticisms come flying, critics should specifically outline what further tax increases they would like to see and what spending reductions they would endorse,” (in place of the fund transfer.) Gordes believes the CEF’s intentions are precisely where the state can save money. As a former Connecticut legislator, Gordes introduced legislation passed 13 years ago that mandated the state switch all incandescent light bulbs in state buildings to compact fluorescent bulbs leading to an average US$4000 savings each year. Pointing to that as one example of how efficiency improvements can pay for themselves over time, Gordes suggested raising registration fees for gas-guzzling SUVs, cutting down the state’s use of paper and making efficiency improvements to government buildings as delivering similar results, while maintaining both the existence and directives of the CEF. “Let’s take every penny of that money and put it into increasing the energy efficiency of state buildings,” said Gordes. That will pay off in only a few years and then continue to provide savings.” Despite crippling budget shortfalls, other states such as New York have gone to the other end of the spectrum. Anticipating efficiency savings and the benefits of bolstering industry, Gov.George Pataki of New York recently mandated an ambitious goal that New York State derive 25 percent of its electrical power from renewable sources. Massachusetts Gov. Mitt Romney’s plans lie somewhere in the middle as he recently tapped into a portion of the state’s Renewable Energy trust fund to alleviate the state’s budget shortfalls. He approved a withdrawal of US$17 million from the fund’s US$160 million total, while saying he would mandate that the state buy at least US$10 million worth of Renewable Energy a year, which he said would effectively offset the funding transfer. While New York is increasing its commitment to Renewable Energy and Massachusetts’ fund will survive despite the one time withdrawal, the outlook in Connecticut is grim. “I find it puzzling that he has taken all the money,” said Gordes. “The idea of shutting down the whole thing, cutting funding at critical mass that will wreck the operations. That’s the difference here.” Jesse Broehl can be reached at [email protected]