September has already been a busy month on two critical energy efficiency (EE) issues directly impacting home performance contractors in Connecticut. First, the United States District Court in Hartford heard oral arguments on a lawsuit to restore $145 million on Energy Efficiency and Clean Energy funds that were “swept” or taken out of EE program accounts by the Connecticut legislature in 2017. Second, the Connecticut Department of Energy and Environmental Protection (DEEP) announced a new, comprehensive review of cost effectiveness testing for customer funded, utility administered EE programs in Connecticut. Both developments will have a decisive impact on residential energy efficiency program funding this year and many years into the future.
HP Contractors Federal Lawsuit Debated
The filing of the federal court case was highlighted in HPC’s August 2018 newsletter and has rapidly proceeded to a pivotal juncture – U.S. District Court Judge Janet C. Hall’s decision on whether the federal case should move forward. At oral arguments on September 13, 2018, Judge Hall spent more than 90 minutes questioning attorneys representing the 12 plaintiffs in the case, including lead Plaintiff Leticia Colon de Mejias, the Connecticut Fund for the Environment, New Haven-based Fight The Hike, Connecticut Citizen Action Group and several home performance contractors. The judge also grilled Assistant Attorney General Philip Miller, who is representing Gov. Dannel P. Malloy, state Treasurer Denise Nappier and state Comptroller Kevin Lembo on the legality of the legislative “sweep” of EE program funding.
Judge Hall focused several of her questions on whether the “sweep” of surcharges for clean energy funds back into the Connecticut General Fund impaired customers' contracts with utilities for EE programs. Governor Malloy signed the budget deal in October 2017 but opposed the “sweeps,” calling them shortsighted. An initial decision on the general merits of the Plaintiffs’ legal claims and whether the lawsuit should move forward is expected by mid-October 2018.
Cost Effectiveness Testing Reforms Announced
On September 13, 2019, Connecticut DEEP rolled out a new stakeholder process to review cost effectiveness testing procedures for the Conservation and Load Management (CL&M) programs offered to ratepayers. Cost effectiveness testing is used to determine which EE programs should be funded by utilities as they implement programs funded by Connecticut’s Energy Efficiency and Clean Energy funds (the same funds described in the lawsuit above). Connecticut currently uses a Utility Cost Test as a primary test and a Total Resource Cost test for low income EE programs. DEEP announced the goals and objectives of its reforms and related stakeholder process with a comprehensive information session in North Haven.
Cost effectiveness testing is the single most important planning tool that states used to allocate over $8.2 billion for gas and electric EE and demand response programs i... Connecticut DEEP’s efforts to reform and modernize its cost effectiveness testing approaches are consistent with a growing number of states that are applying the May 2017 National Standard Practice Manual to help “test their tests” for EE program funding. DEEP has proposed a stakeholder process designed to produce updated and revised cost effectiveness testing guidance by June 2019. HPC has been working closely with many states that are seeking to modernize and update their cost effectiveness testing policies and salutes DEEP for undertaking this new effort. HPC will file comments on the DEEP cost effectiveness testing stakeholder process by October 1, 2018.