State Energy Efficiency Policy Database

Electric distribution utilities, natural gas companies, and municipal electric utilities are required by Connecticut statute to provide "conservation and load management" (C&LM) programs for their customers. The Energy Conservation Management Board (ECMB) works with the utilities to develop their energy efficiency plans. The natural gas and electric distribution companies’ plans are subject to review and approval by the Public Utilities Regulatory Authority (PURA). All programs included in the plans are required to pass a benefit-cost test. The PURA oversees the electric distribution utility and natural gas utility programs. The ECMB, appointed by the PURA, administers the Connecticut Energy Efficiency Fund (CEEF).  The utilities administer the energy efficiency programs. The utilities and contractors hired by the utilities implement the programs.

Each year, the ECMB meets to review and approve the energy efficiency program plans. These are formal, uncontested hearings. Board consultants work with the utilities on developing their plans. The utilities set goals (savings and other program metrics) for program results in conjunction with these hearings.

The ECMB and the CEEF were established in 1998 through the state’s electric utility restructuring legislation, Public Act 98–28, An Act Concerning Energy Independence, Connecticut General Statute §16-245m. The 1998 Act required electric companies to offer efficiency programs. CEEF expenditures for electric efficiency programs have steadily grown through the years.

In 2005, Public Act 05-1, An Act Concerning Energy Independence (Connecticut General Statute §16-32f  and Connecticut General Statute §7-233y) required the investor-owned natural gas companies to submit energy efficiency program plans to the DPUC and required the municipal electric companies and the Connecticut Fuel Oil Conservation Board to work with the ECMB to develop energy efficiency programs for their customers.

According to the Energy Information Administration, Connecticut electric utilities reported efficiency program savings of 250,373  MWh in 2009.  Reported electricity savings for 2010 are in the State Spending and Savings Tables.

Connecticut offers the Connecticut Home Energy Solutions program, which provides financing for residential whole-house retrofits.  An authorized contractor performs energy assessments, making on-the-spot improvements such as sealing of critical air leaks and caulking.  Depending on eligibility, rebates can be provided for appliances, HVAC systems, and insulation.  More information on the program can be found in the ACEEE report, Energy Efficiency Financing Programs.

Links:

• Database of State Incentives for Renewables and Efficiency
   

Connecticut has an all cost-effective efficiency procurement requirement for electric and natural gas utilities that has yet to be implemented. It also has a stakeholder Council called the Energy Conservation Management Board comprised of representatives of commercial, industrial, residential, low income, and environmental interests that helps to review, provide crucial input into, and oversee the utilities’ efficiency program. Connecticut established a renewable portfolio standard (RPS) several years ago and expanded it in 2005.  Specifically, in June 2005, the Connecticut legislature adopted legislation that adds new “Class III” requirements covering energy efficiency and combined heat and power plants (CHP).  Under the new Class III requirements, electricity suppliers must meet 1% of their demand through using efficiency and CHP by 2007 and 4% by 2010. No additional Class III resources are required after 2010.  Class III resources include: customer-sited CHP systems, with a minimum operating efficiency of 50%, installed at commercial or industrial facilities in Connecticut on or after January 1, 2006; (2) electricity savings from conservation and load management programs that started on or after January 1, 2006; and (3) systems that recover waste heat or pressure from commercial and industrial processes installed on or after April 1, 2007. The revenue from these credits must be divided between the customer and the state Conservation and Load Management Fund, depending on when the Class III systems are installed, whether the owner is residential or nonresidential, and whether the resources received state support.

The 2007 Electricity and Energy Efficiency Act (H.B. 7432) strengthened these requirements by enacting complementary policies, including policies covering energy savings from waste heat recovery. The law also requires utilities to achieve resource needs through "all available energy efficiency resources that are cost-effective, reliable and feasible." The DPUC has interpreted this mandate overly restrictively, however, focusing only on capacity needs, and has not approved funding increases to achieve all cost-effective energy efficiency (Docket 10-02-07).

The distribution companies must submit biennial assessments of energy and capacity requirements looking forward three, five and ten years, as well as plans to "eliminate growth in electric demand" and to achieve other demand-side and environmental objectives. The Connecticut Energy Advisory Board (CEAB) reviews the plans before they are submitted to the Department of Public Utility Control (DPUC), along with CEAB comments and analysis. In a separate proceeding, the DPUC reviews the annual Conservation and Load Management (CLM) Plan, which is developed by the utilities with oversight by the Energy Conservation Management Board (ECMB), which is appointed by the DPUC. Connecticut electric utilities adopt savings targets through annual CLM Plans.  The ECMB oversees the Connecticut Energy Efficiency Fund (CEEF), which is primarily supported by monthly charges on customers' bills. CEEF was created in 1998 to address increasing energy demand and rising costs. With oversight by the ECMB and its consultants, the utilities administer the energy efficiency programs.

In its 2008 decision approving the combined 2009 CLM Plan submitted by the states’ major utilities and the Energy Conservation Management Board, the DPUC ordered that the 2010 plan establish broader, longer-term goals (Docket 08-10-03). Connecticut utilities did not include long-term goals in the joint 2010 or 2011 Plans, but goals for programs do exceed 1% annual savings in 2010 and 2011. The 2010 CLM Plan was approved, but the Department expressed concern that long-term goals were not adopted (Docket 09-10-03, Department Order March 17, 2010, pgs 56-58).However, utilities are reluctant to include long-term goals without commitment from the DPUC to increase levels of funding necessary for aggressive long-term energy efficiency goals. The DPUC has shown no indication it will approve additional ratepayer funding for electric programs beyond the current statutorily-mandated ratepayer charge.

In its 2012 IRP, the state estimates that, if implemented, it could cost-effectively achieve energy savings of 2% each year from 2012-2022, supported by a doubling of annual budgets for energy efficiency to approximately $206 million.

Connecticut has no Natural Gas EERS.

Links:

• Authority: Public Act 07-242 , June 2007
• 2012 Integrated Resource Plan for Connecticut

During annual hearings, the Energy Conservation Management Board (ECMB) reviews the past year’s results relative to the established goals and determines a performance incentive for the distribution utilities for achieving or exceeding the goals. The incentive, referred to as a “management fee,” can be from 1-8% of the program costs before taxes. The threshold for earning the minimum incentive (1%) is 70% of the goal. At 100% of the goal, the incentive would be 5%. At 130% of goals, it would be 8%. Program costs are recovered through rates.

Anticipated incentives are built into the annual budgets.  Over the course of several dockets, the Public Utilities Regulatory Authority has affirmed the value of the incentive. The expenditures used to calculate the incentive may include administrative and overhead costs, but not ECMB costs and incentive costs.

Connecticut has had some type of utility performance incentives for DSM since 1988. The exact mechanism has changed over time.