Billions paid in fees for ‘green’ programs
CT electric, gas customers billed $1.9B for energy initiatives
Connecticut’s electric and gas customers paid billions over the last decade through little noticed fees that are used to increase energy efficiency, lower usage and encourage clean, renewable electricity.
The numbers are big — ratepayers provided more than $1.9 billion for energy efficiency programs since 2010 and $240 million for renewable energy since 2012, state records show.
All that money comes from the combined public benefit charges, included on everyone’s monthly electric and gas bill, that fund a series of initiatives mandated by the state Legislature.
So where does the money go and who benefits?
The short answer is the money is returned to ratepayers, minus modest administrative costs,
through loans, rebates, incentives and free materials that help make homes, businesses and municipalities more energy efficient and promote renewable energy sources.
The funds are augmented by money earned through the complicated sale of renewable energy.
Although some energy efficiency programs are income restricted, many are open to everyone. In 2020, 25,575 customers participated in income eligible programs, which provided an average of $1,150 in services per home.
Over all, nearly 62,000 homes received home energy audits and energy saving improvements in 2020. In 2019, nearly 58,000 homes received similar services, according to the energy efficiency board.
“These are programs that all of you are eligible for,” said Amy McLean, vice chair of the Connecticut Energy Efficiency Board.
“Like a home energy assessment — right now it’s free,” McLean said. “Nine years ago, I had an energy assessment done. I got $11,000 worth of insulation for free. The incentives are there to take advantage of.”
Those “incentives” have spurned a cottage industry of contractors and vendors who install solar equipment, energy efficient windows and other updates.
The state’s two utilities — Eversource and Avangrid, which owns United Illuminating and its subsidiaries — implement the efficiency programs under the direction of state utility regulators.
The renewable side is run by the state’s Green Bank, which offers loans, subsidies and incentives for upgrades, such as rooftop solar arrays on homes or converting businesses to more efficient energy sources.
Mitch Gross, a spokesman for Eversource, said the programs are working as intended.
“Last year, about 11,000 of our residential customers participated in the Home Energy Solutions program, our most popular program, and one of the many we offer that can help people reduce their energy usage, tighten-up their homes and keep energy bills down year-round,” Gross said.
Still, the monthly fees also increase electric and gas bills. Connecticut’s electric costs are among the highest in the nation and the highest in New England.
Connecticut lawmakers long ago decided that higher bills are an equitable trade off for lower overall electric and gas usage and moving the state away from the carbon-based power that scientists blame for global warming and climate change.
“We recognize the effect higher electricity prices can have on our customers, especially during this unprecedented time,” Gross noted. “That’s why we encourage customers to continue taking advantage of these energy efficiency solutions to better manage their energy use.”
Energy efficiency programs
The effort to increase energy efficiency and reduce costs began in 1998 and has steadily increased in scope.
An array of programs are operated under the brand name Energize
CT and are implemented by Eversource and Avangrid. The Connecticut Energy Efficiency Board establishes the programs, in conjunction with the utilities and the state.
“We like to say we offer something for everyone based on needs, such as a lighting upgrade,” said Elizabeth Murphy, an Avangrid supervisor for the company’s energy efficiency program. “Other customers have more sophisticated or complex needs and we connect them with a vendor or in-house specialists.”
Energize CT programs range from boiler replacements, insulating homes, installing advanced HVAC controls, Wi-Fi thermostats, lighting kits, air purifiers, water saving shower heads, air sealants, modern heating and cooling systems and triple pane window rebates.
Commercial and industrial businesses are also offered energy assessments to increase efficiency and loans and other incentives to replace inefficient heating and cooling systems.
Operation Fuel, which provides home heating assistance to low income customers, is a separate program that’s partly funded by a voluntary $1 per month donation triggered by checking a box on the electric bill.
Since the initiative began, the energy board says 900,000 homeowners, businesses and municipalities have participated in a program and 61,888 homes received an energy assessment or money saving efficiency improvements.
That includes 19,497 new heating and cooling systems, 5,376 heat pumps, 3,961 water heating units, issuing 2,754 insulation rebates and 11,251 refrigerator and freezer rebates.
“Energy efficiency programs saved residential customers $25 million in 2020 alone, and will save $276.6 million over the life of the efficiency measures installed,” said Will Healey, a spokesman for the state Department of Energy and Environmental Protection.
“Commercial and industrial customers saved $34.3 million in 2020 and will save $399 million over the lifetime of the efficiency measures installed,” Healey said.
Renewable energy
The state’s Green Bank is responsible for spending ratepayer money on converting businesses and homes to clean energy and undertaking other upgrades.
The effort is a part of the state’s overall goal to purchase only renewable energy by 2040.
The ratepayer money is used to provide capital to businesses to finance conversions to clean power. Those companies apply the energy savings to pay back the debt, usually over a 20-year period.
The bank also helps towns and nonprofits install solar power by using ratepayer money from the renewable energy investment fund to help finance construction.
“We put together a finance structure for the town and nonprofit,” said Bryan Garcia, the Green Bank president. “We will put solar on your municipal buildings and that receives capital from the renewable energy investment funds.”
The most visible use of ratepayer money is the residential solar program, which provides loans to homeowners to install equipment that can cost $25,000 per home.
“We pay for losses (the banks might incur) from those loans,” Garcia explained. “We know people pay back energy loans. So, the local banks provides the capital and we are a backstop.”
Garcia said the Green Bank uses ratepayer money to create a bigger pool of dollars to invest in various forms of clean energy.
“We take the limited public dollars and turn it into multiples of private investment to do more,” Garcia said. “We turn $25 million (in yearly ratepayer money) into $300 million. We are the smallest part of the combined energy charge and we have the largest impact.”
The bank is credited with creating 23,000 green energy jobs and reducing energy costs for 55,000 families.
According to the Green Bank, every $1 invested in renewable energy attracts $6.60 in private investment. The bank says it has generated $96.7 million in state taxes, installed 434 MW of electric capacity and eliminated 8.9 million tons of carbon dioxide from the air.