State PBF/USF History, Legislation, Implementation
Last Updated: March 2013
Rate Assistance and Arrearage Forgiveness
Since 1998, Connecticut has had a system benefits charge (SBC), which has provided, among other things, a mechanism to cover some of the two largest electric utilities' expenses in assisting low-income households, particularly in complying with the state's consumer protection statutes (Conn. Gen. Stat. § 16-2451).
Connecticut has some of strongest consumer protection measures in the country, including a strict winter disconnect moratorium that, subject to conditions, protects low-income "hardship" customers from having their gas heat and electric service turned off between November 1 and May 1.
To support low-income assistance and energy conservation and efficiency, Connecticut's 1998 restructuring law imposed three separate charges: the above-mentioned SBC, a conservation surcharge (Conn. Gen. Stat. § 16-245m) and a renewable surcharge (Conn. Gen. Stat. § 16-245n), which fund conservation and load management activities and renewable energy programs.
The systems benefits charge, the conservation charge and the renewable energy charge were combined for billing purposes into the Combined Public Benefits (CPB) charge in 2006. The CPB charge, 3 mills per kWh, is imposed on all customer classes of the state's two investor-owned utilities - Connecticut Light & Power (CL&P) and United Illuminating (UI). This charge collects the money used to support an energy efficiency fund and a renewable fund: the Connecticut Energy Efficiency Fund (CEEF) and the Connecticut Clean Energy Fund (CCEF). The CEEF is also supported by the three regulated natural gas utilities through a conservation charge included in their rates.
The CPB charge includes the costs that the Connecticut Public Utilities Regulatory Authority (PURA) assigned to the original systems benefit charge, including low-income assistance that was largely limited to allowing UI and CL&P to recover their costs in implementing programs they operate to assist low-income households, such as arrearage forgiveness and assistance during the moratorium for hardship customers.
Electric utilities are allowed to use CPB funds to forgive arrearages and uncollectibles incurred by hardship customers, including the arrearage forgiveness mandated by statute for utility heating customers who are eligible for energy assistance (income at or below 60 percent of the state median income) and voluntary arrearage forgiveness programs available to low-income households, regardless of whether they heat with electricity.
During 2012, mandated arrearage forgiveness for electric heating customers amounted to about $12.8 million, serving over 40,074 customers. (Conn. Gen. Stat. § 16-262c(b)(4)-(5) defines the statutorily mandated program).
Apart from the CPB, a gas arrearage forgiveness program has been mandated by statute for a number of years for households that receive energy assistance for their gas heating bills (Conn. Gen. Stat. § 16-262c(b)(4)-(5)). During 2012, gas companies claimed about $8 million in expenses for this program, which served 30,156 households.
The CEEF supports a variety of energy efficiency programs that provide financial incentives to help home and business owners reduce their energy consumption. Efficiency programs are reviewed by the Energy Efficiency Board (EEB), formerly known as the Energy Conservation Management Board, and approved annually by the Connecticut PURA.
The Board is an appointed group of 14 members representing public and private entities or interest groups. Its original purpose was to advise and assist the two major electric utilities in developing and implementing efficiency programs. In 2005, the Board's oversight was expanded to include the energy programs of the Connecticut Municipal Electric Energy Cooperative and the natural gas utilities — Connecticut Natural Gas Corporation, Southern Connecticut Gas Company and Yankee Gas Services. (Conn. Gen. Stat. §§ 16-245m, 7-233y and 16-32f).
In 2012, CEEF programs served several customer sectors: limited-income (up to 60 percent of Connecticut median income), municipal, non-profit, residential, small business, state government, and large commercial and industrial customers.
Limited-income households, formerly served under separate utility programs called WRAP and UI HELPS, are now served under the Home Energy Solutions Income Eligible program (HES-IE). Its 2012 year-end program budget totaled $14.8 million for electric energy customers and $4.3 million for natural gas customers. About 18,355 households were expected to participate, mostly through the state's low-income weatherization network.
The electric and gas companies submitted a multi-year Conservation & Load Management (C&LM) Plan to PURA that describes two plans with different levels of funding and energy savings for 2013-2015. The Base Plan reflects the standard three-year budgets and energy savings that are consistent with the traditional funding. The primary funding source for 2013 HES-IE programs in the Base Plan continues to be the three-mill charge on customers' electric bills and the contributions from natural gas customers through the monthly Conservation Adjustment Mechanism (CAM). In 2013, projected funding for 2013 programs is $10.8 million from the electric companies for over 12,000 households and $4.7 million from the gas companies for over 6,000 households.
An Expanded Plan describes the programs and increased funding levels necessary to achieve the state's increased savings goals. To partially fund the bigger budget required for the increased savings goals, the electric companies have begun the process to implement a CAM. Additional revenue from natural gas customers may also be available as a result of excess gross receipts tax collections.
The HES-IE programs offer a full range of energy conservation measures to address inefficient lighting, water heating, inefficient heating equipment, refrigeration and insufficient insulation.
The Plan takes a "fuel blind" approach to energy efficiency in the residential sector and expects to utilize Regional Greenhouse Gas Initiative (RGGI) dollars for homes that heat with fuel oil.
The Department of Economic and Community Development operates the Energy Conservation Loan (ECL) program for low- and moderate-income households based on Department of Housing and Urban Development area median income standards up to 200 percent.
Loans for energy efficiency improvements and furnace replacement have 0 percent interest for a family with median income of 50 percent or less and are subsidized by the state's major utilities. Other improvements that may be funded include: replacement doors and windows, siding, insulation, heat pumps and solar systems and passive solar additions.
In 2012, according to its annual report, the program provided 245 loans totaling $2.3 million under the ECL and Multifamily Energy Loan programs.
A study in 2007-2008 by KEMA Consulting evaluated the impacts of United Illuminating's Helps and Connecticut Light and Power Company's Weatherization Assistance Partnership (WRAP) Programs.
This study assessed the electric and gas energy savings of several efficiency measures that were installed in low-income homes and compared actual savings to estimated or tracked savings for 2007 and 2008. Data was gathered to improve program tracking estimates through a continual feedback loop.
The study also reviewed the formulas and calculations used in the cost and savings associated with the installation of individual energy efficient measures and offered recommendations on how to provide more accurate estimates of program impacts throughout the program year.
Key findings and recommendations are summarized in the report.
Utility restructuring legislation, HB 5005, PA 98-28 (4/98)
PURA decisions on utility programs
Annual reports from the Connecticut Energy Efficiency Board about energy efficiency programs, including low-income