Connecticut is back. Or at least it intends to be soon. The state that was once a leader in energy efficiency – but later lost its luster to neighboring Massachusetts, Rhode Island and Vermont – has big plans for 2014.
Dan Esty, commissioner of the state Department of Energy and Environmental Protection, recently outlined the strategy to reporters, after regulators gave the plan a tentative thumbs-up.
Connecticut has been known for years for its pricey electricity. But recently its rates have edged downward, falling by 12 percent since 2010 due to a combination of factors. Now, Connecticut intends to work on lowering consumer bills even more with an all-out drive for energy efficiency.
“Everywhere there is an energy bill to pay, we’re looking to bring down costs,” Esty said.
For starters, the state intends to increase funding for electric and natural gas energy efficiency programs from $122 million to $231 million annually for three years. The program is designed to leverage state funds to attract private capital and favorable financing through the state’s green bank, the Clean Energy Finance and Investment Authority.
Connecticut plans to channel the money into homes, apartments, state and local government facilities, universities, hospitals, schools, prisons, and particularly commercial and industrial businesses. The program goes after energy savings in just about every kind of building system. It also offers sweetners to encourage utilities to pursue efficiency, and for consumers to convert to natural gas, install more efficient lighting and appliances, and adopt other efficient technologies and approaches.
The plan continues Connecticut’s flagship initiative for existing homes, which has spurred development of a home energy performance industry in the state. But the new strategy digs deeper, looking for the kind of improvements homeowners tend to ignore. The state also will continue to tackle efficiency in new construction through code compliance, builder education and other means. This program has already seen success, capturing 32 percent of market share last year (795 of the 2,451 housing permits.)
For businesses, Connecticut will continue initiatives begun 14 year ago for large commercial and industrial energy users, expand some and add new ones. The state also intends to take on the challenge of reaching smaller enterprises that are less inclined to pursue efficiency.
“Connecticut is a small state with relatively limited energy resources within our borders,” Esty said. “Our most available and affordable resource is energy efficiency.”
How will the state pay for programs? Connecticut electric utilities already charge a conservation fee of $0.003 per kilowatt hour (about $2.25 per month for the average residential ratepayer). The plan calls for doubling the fee. A similar fee on natural gas bills will rise from an average $2.50/month to $4.40/month during the winter months.
Advocates of the plan say that the charges will be offset by energy savings – consumers may see their energy rates go up, but their energy use will fall, lowering their bills.
The program should save money even for those who do not undertake energy efficiency upgrades, say state officials, since it will avert the need to build new power plants or run expensive and polluting electric peaking units during periods of high demand.
In all, the state expects the strategy to achieve net savings of $1.9 billion for natural gas and $3.5 billion for electricity over the next decade.
“As a state we dramatically overspend on energy, as we buy energy that ends up wasted,” said Roger Smith, Connecticut co-director of the Clean Water Action/Clean Water Fund. “Rhode Island, Massachusetts, Vermont and other states expanded to achieve all cost-effective efficiency years ago. This increase in efficiency investments gives us a chance to again become a national leader.”
It’s important to note that while Connecticut hasn’t held the sheen of innovation it did in earlier years, it hasn’t been a laggard
either. The state ranked sixth in a national 2012 scorecard by the American Council for an Energy Efficient Economy. (Massachusetts has been number one for two years running.)
Connecticut’s energy efficiency ramp-up is part of a larger new focus on energy that Governor Dannel Malloy began after he took office in 2011. Among other things, Malloy created a central department for energy and environment and hired Esty to oversee it. Esty arrived as an already visible figure in energy policy, an author and Yale professor who served as the director of Yale’s Center for Environmental Law and Policy and its Center for Business & Environment.
How can energy efficiency companies take advantage of these new opportunities? State officials suggested that vendors check in with the Energy Efficiency Board to find out how to participate. They also should keep an eye out for solicitations that the utilities are expected to issue. (EnergyEfficiencyMarkets.com will list them here.) There is a good chance, too, that energy efficiency vendors will find more customers knocking on their doors as the state undertakes a marketing and education campaign to encourage energy savings.