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1 MARCH 5, 2019
sp ENERGY AND TECHNOLOGY 10:00 A.M.
COMMITTEE PUBLIC HEARING
CHAIRPERSONS: Senator Norman Needleman
Representative Jonathan
Steinberg
SENATORS: Fonfara, Formica, Lesser
REPRESENTATIVES: Ackert, Arconti, Buckbee,
Cheeseman, Davis, Demicco,
Ferraro, Gresko, Lanoue,
Lopes, Meskers, Napoli,
Perone, Petit, Piscopo,
Winkler
SENATOR NEEDLEMAN (33RD): Good morning, everyone.
Nobody says good morning back? I have to do the
flag attendant thing. In the interest of safety I
would ask that you note the location of and access
to the exits in this hearing room. The two doors
through which you entered the room are the emergency
exits and are marked with exit signs. In an
emergency, the door behind the Legislators can also
be used. In the event of an emergency please walk
quickly to the nearest exit. After exiting the room
go to your left and exit the building by the main
entrance or follow the exit signs to one of the
other exits. Please quickly exit the building and
follow any instructions from the Capitol Police. Do
not delay and do not return unless and until you are
advised that it is safe to do so. In the event of a
lockdown announcement please remain in the Hearing
Room, stay away from the exit doors until an “All
Clear” announcement is heard. So with that, I am
2 MARCH 5, 2019
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COMMITTEE PUBLIC HEARING
going to ask if my Co-Chair has anything or? So we
might as well get right down to it.
This is a Public Hearing of the Energy and
Technology Committee and we have a bunch of Bills to
review. The first person on our list is Senator
Somers.
SENATOR SOMERS (18TH): Good Morning to the Chairman
and Ranking Members of the Committee that are here
today. Well thank you for the opportunity to come
in front of you this morning. I am testifying in
support of Raised Bill 961 that’s AN ACT CONCERNING
MUNICIPAL ELECTRIC UTILITIES AND MUNICIPAL ELECTRIC
ENERGY COOPERATIVES.
So on behalf of the Connecticut Municipal Electric
Energy Cooperative “CMEEC” ratepayers in my
district, I would like to thank the Committee for
drafting Raised Bill 961 and committing to continue
to make adjustments to the operations of this, $300
million dollar ratepayer-funded, not for profit,
public entity.
Nearly two years ago to this day, I sat here before
you to testify on several pieces of legislation that
I proposed to change the way CMEEC operates in
Connecticut. My concern began with the revelation
that CMEEC had invited more than 40 colleagues,
vendors and friends to an all-expense paid trip to
the Kentucky Derby, including the use of a private
jet for a total cost of approximately $340,000 in
2016. This “Business trip” included only eight
people that had any relation to CMEEC even the Board
Member’s parents who allowed to join in this junket.
They were flown thanks to their son’s employer but
shockingly there was no business agenda at the
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COMMITTEE PUBLIC HEARING
retreat and no evidence of any business being done
on this trip.
The Public then learned that these trips had been
going on for years, totaling over $1 million dollars
of ratepayer dollars spent and that the news was
intentionally kept quiet. In fact, the local utility
regulators and some of the chief elected officials
whom these Board Members and Co-Op officials served,
were unaware of the trips.
I am here today to thank the Committee for the
initial steps taken in Public Act 17-73, AN ACT
CONCERNING MUNICIPAL ELECTRIC UTILITY COOPERATIVES
AND ESTABLISHING A MUNICIPAL ELECTRIC CONSUMER
ADVOCATE. One of the most important provision in
this Act, in my opinion, was the creation of a
municipal Ratepayer Advocate. Attorney Bill
Kowalski has filled that role with extreme
competence since 2017 and is an excellent advocate
for CMEEC’s municipal ratepayers. He has uncovered
many more questionable practices by this
organization and his role is critical, especially in
light of the recent indictments that we have seen
comedown. For example he successfully lobbied the
Board to rescind it’s initial award of a contract
for a statutorily mandated forensic audit due to an
existing business relationship. He participated in
the rebidding and selection process that resulted in
a selection of an auditor with no prior history with
CMEEC.
I am also here today to testify that more reforms
are needed, in my opinion, to protect CMEEC’s
captive ratepayers.
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COMMITTEE PUBLIC HEARING
Continuing discoveries since the 2017 Public Act was
passed indicate that CMEEC is an organization that
is simply unable or unwilling to empathize with the
ratepayers that it serves. After watching CMEEC
closely for more than two years now, I believe the
problem is deep within the organization’s DNA. It
simply does not appear to possess the skillset and
integrity necessary to retain the privilege of self-
governance the legislature bestowed upon it over the
years. This entity is technically a municipality
and should be subject to the transparency. In fact,
CMEEC’s sister organization in Massachusetts has two
governor appointees on the Board, to provide true
independent review of its actions and they provide
full transparency.
Since the legislature last considered CMEEC, five of
the organization’s officials, including the Chief
Executive Officer, Chief Financial Officer, one
sitting Board Member and two former Board members
were indicted by the FBI for crimes associated with
misuse of federal dollars at CMEEC. The CEO, Drew
Rankin, and former Norwich Public Utilities
Chairman, James Sullivan, are facing seventy years
in prison, while the others face thirty-five years
in prison. Rankin and Sullivan also conspired to
hide Mr. Sullivan’s personal expenses within CMEEC’s
administrative budget.
For years CMEEC has been used to “flying under the
radar” of the public, they’ve never had to justify
its own decisions to anyone. Over time, the entire
organization has lost the ability to assess its own
conduct and has developed a perverse view of its
duty to the ratepayers who fund it and the statute
that enabled its existence. One of the perversions
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COMMITTEE PUBLIC HEARING
is known as the “Margin Fund” which I understand is
no longer in place.
But we did learn about the inflation of the
wholesale price of energy with a dollar charge per
megawatt that was put into a margin fund which is
used to go on these junkets.
So how can a public, not for profit utility with
captive ratepayers be secretive? They refused to
have full transparency. Their budgets are redacted.
CMEEC has been unable or unwilling to honor the
spirit of our State’s FOI laws. To this day, CMEEC
deems portions of its business or its operations as
confidential trade secrets. Other than personnel
matters, the CMEEC has no reason to ever claim the
“proprietary business information” exemption to the
State’s Freedom of Information laws and if you look
at Massachusetts their sister authority does not
claim business sensitive or trade secrets. Once a
contract is signed it is made public. There is a
period of 120 day and then it is made public.
CMEEC has been under questionable management since
at least 2011, when Mr. Rankin came on board and the
now indicted CEO still sits on the Board.
Since the indictments, CMEEC Board and interim CEO
Mike Lane, still asserts that the bad people are
gone and everything is fine but I think otherwise.
After the indictments, the CMEEC Board re-elected
Drew Rankin (yes the man facing 70 years in prison
under FBI indictment) and Board Members were still
parroting his talking points of CMEECs “unbelievable
value,” but unfortunately they have not been able to
provide any transparent numbers prove that
unbelievable value.
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COMMITTEE PUBLIC HEARING
If the General Assembly looks closely at the
original purpose of CMEEC and determines that it is
still a public benefit for them to exist, then this
body must also accept that the changes to CMEEC will
be a multi-year process, requiring hands-on guidance
from this Committee. CMEEC must refamiliarize itself
with its original purpose. It must be fully
transparent and deliver power at cost to its
municipal member utilities.
The provisions put forth in the Committee bill lay
the ground work for what I believe will be a multi-
year process of reforming CMEEC. The bill will:
Make CMEEC subject to the State Auditor, to instill
ratepayer confidence. It will continue to fund the
Ratepayer Advocate who have been invaluable over
these past two years. It will ensure Ensures that
CMEEC will seek to recover the legal costs
associated with those who have been indicted should
they be found guilty. Right now CMEEC is paying for
the defense of the people that have been indicted.
CMEEC and Municipal Utilities must disclose their
annual budgets and executed agreements without
redaction after a period of time. There should be
the elimination of trade secret exemptions when it
comes to non-profit and public entities It changes
the weighted voting used at CMEEC, which flies in
the face of a joint action agency CMEEC must
incorporate the forensic audit findings that were
found during the last forensic audit into its
operating procedures and it must disclose to the DRS
if they are holding money for any municipalities in
their accounts at CMEEC for those municipalities.
This refocus CMEEC back to its primary purpose
before it started doing what I call for profit work.
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Municipal utilities must provide information back up
to their customers should they require it on line-
item charges. That backup needs to be equivalent to
what a regulated utility would provide.
Finally, I want acknowledge some of the hard work of
the Consumer Counsel. There have been active
citizens and The Day has very, very helpful in
helping uncover some of the wrong doings at CMEEC.
And I would like to thank the FBI actually when
local and state law authorities fail to stop
offenses the FBI was undeterred and is responsible
for bringing the only semblance of justice in this
matter to our small corner of the state.
And on behalf of the CMEEC ratepayers in my
district, I want to thank the Committee for drafting
this Bill and your commitment to continue to make
necessary adjustments are made in the practices of
this $300 million dollar, again public, not for
profit entity so that our ratepayers in Connecticut
can be confident that their leadership is doing the
right think. Thank you very much and I’m happy to
answer any questions.
SENATOR NEEDLEMAN (33RD): Thank you, Senator. You
were both at the same time.
REP. PISCOPO (76TH): Thank you, Mr. Chair.
SENATOR NEEDLEMAN (33RD): You got it.
REP. PISCOPO (76TH): Good morning, Senator. Thank
you for your testimony. I was, you mentioned the
ratepayer advocate. Can you kinda give me some
idea, can you give me some justification why you
believe they should stay in that position and keep
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COMMITTEE PUBLIC HEARING
getting funded, like can you justify that for me,
please?
SENATOR SOMERS (18TH): Well absolutely, the
ratepayer advocate was added in the last legislation
so that we had a truly independent voice on the
Board of CMEEC for attending the meeting for CMEEC
and Mr. Kowalski was chosen in an independent
process that the Consumer Council choose him as the
advocate and he has been invaluable. He attends all
the meetings, he is the one who has actually just
recently asked for backup on some unusual findings I
the forensic audit that we can certainly go through.
There was unaccounted charges for example that are
quite troublesome, they include things such as
$4,600 dollars for Board of Directors golf outing,
$13,700 dollars for bands, food and massage gift
certificates and play parties, $8,700 for artwork,
$350 dollars for “the attire for Governor Saul, all
those types of expenses. This is non-profit
organization. These were uncovered during a
forensic audit. He has asked for the details and the
detail is what I’ve given you.
I have personally written a letter this morning to
CMEEC asking for the documentation for all of these
expenses. This is something that would never be
allowed out in a non-profit organization. He has
been invaluable there.
He also has been advocating on some of the Board
Rules. For example the Board had a rule as far as I
have been informed that should someone be accused of
criminal activity that CMEEC would pay for their
defense which is happening now. He has insisted
that changes to the Board practices go forward.
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COMMITTEE PUBLIC HEARING
Without him there, we don’t have a truly independent
voice and in light of having five people indicted
since our first legislation has passed I think it is
imperative that we need to have a consumer ratepayer
advocate on that Board so we are clear and have a
truly independent voice present.
REP. PISCOPO (76TH): Thank you, Senator.
SENATOR NEEDLEMAN (33RD): Representative Cheeseman.
REP. CHEESEMAN (37TH): Thank you, Mr. Chair. Thank
you for your testimony, Senator and I want to thank
you for your tireless advocacy on the part of the
ratepayers. As everyone on this Committee knows
that is a song I sing very often so I really
appreciate your efforts. I do have a couple of
questions for you, however. Can you clarify your
position on whether CMEEC should continue to invest
in projects and contract for services anymore? I’m
looking at Section 7, lines 444-447.
SENATOR SOMERS (18TH): What are you looking at?
REP. CHEESEMAN (37TH): 44.34, Section 7, lines 444-
447.
SENATOR SOMERS (18TH): Yes this speaks to the
enabling Statue. The enabling statue was to allow
these, the seven most distressed communities to come
together to develop a purchase power agreement so
they could get the best price on the market for
energy and this initially was supposed to go through
the cooperative at a no-cost or at cost to the
municipal electric company and to the consumer.
Since that time CMEEC has expanded its prevue of
what businesses that they are or not in and therefor
I believe that we should think about bringing them
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COMMITTEE PUBLIC HEARING
back to their statutory purpose and enabling them to
just purchase power because that is what they were
originally designed to do. We have seen what
happens when they get into other areas where they
can generate margin as they call it which is not
what they are supposed to be doing.
REP. CHEESEMAN (37TH): So basically you want them
to get back in their original lane?
SENATOR SOMERS (18TH): I would like them to get back
in their lane, exactly.
REP. CHEESEMAN (37TH): All right, thank you. There
is a Bill that relates to electric bill, portion of
the Bill that relates to electric bill format.
Would this also apply to CMEEC?
SENATOR SOMERS (18TH): Well in some of the cases
some of the larger companies I have spoken to
directly CMEEC generates the bill for the utility
company. I am not sure if that is true for all
businesses but some of the business I’ve spoken to
directly and CMEEC charges a fee for that. You know
one of the companies that I have spoken to in
details is a very large pharmaceutical company and
they were being originally charged $5,000 a month
for CMEEC to create this bill which looked like an
Excel spread sheet. They were doing that on behalf
of a utility company and there’s items or line items
on that bill that are not descriptive. They may say
fixed line cost and just using that as an example.
When the company asked the utility for the backup
behind it what they’re told and this is coming
directly from this company is that they will say
that we don’t have to give it to you, it is trade
secret, it’s confidential, I’m not giving it to you.
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So I think it is important. If a customer is asking
for the detail behind a line item that whether it’s
a public utility or a municipal utility there should
be a requirement that they need to provide the
backup data for the charge associated with that and
that is what this is trying to do saying if a
customer asks for the line item details that the
municipal electric company needs to provide the back
up of data just like they would and equivalent to a
regulated utility.
REP. CHEESEMAN (37TH): Okay and one final question
in Section 6 makes CMEEC subject to review by the
state auditors and they have to submit a report
quarterly to the DRS. Do you feel PURA is the more
appropriate, I’m trying to follow the rationale
behind have these two other entities as opposed PURA
regulating and monitoring CMEEC?
SENATOR SOMERS (18TH): I would love for PURA to be
able to oversee this but PURA has not been really
interested in pursuing that so this was the best
alternative that I could come up with. As far as
the DRS report the reason that I asked for that was
because CMEEC holds or in the past have held money
in separate accounts for utility companies. I was
told by Drew Rankin himself that any account a
municipal company would like to create, he’s fine
with that. That’s the electric company’s business
not CMEECs so if they wanted to create a rate
stabilization account everyone has one. If they
wanted to have an Economics Development account he
would create it. I, you know factiously said that
if they wanted a “trip account” would you create
that and he said, “Anything they want.” So when
we’re looking at ECF funding for example for all we
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know we could have a local electric utility company
owned by a town or a city that has millions of
dollars sitting one of these accounts and we would
have no way of knowing that it is there. So that’s
way if we require that there is a report sent to the
DRS we would know how much money is in each one of
those accounts and that was my rationale behind
that. That money in my opinion should all be in
rate stabilization because that money is for the
ratepayer and that money is originally designed to
stabilize the rate so that the energy costs stay low
for the members that in the utility company’s
jurisdiction. Again if you look at the
Massachusetts version they are not allowed to keep
money in those accounts. They have to return it to
the ratepayers. So I think that is important so
that we know what’s there.
REP. CHEESEMAN (37TH): I will just say you make some
very good points and I will say although PURA maybe
your preferred entity to monitor this just looking
at some of the other reports that the state auditors
have done, I’ve been very impressed by what they
uncover, your mention of gift cards, I know hearing
when they reported on the community college system
student parking fines are supposed to be dedicated
to student scholarships and there were community
colleges that were using them to buy Amazon gift
cards for their employees as part of reward system.
So I think as I say although PRUA might be your
preferred entity I think the state auditor could
certainly do a good job. So again, thank you for
testimony today. Thank you for answering my
questions and thank you very much, Mr. Chair.
SENATOR NEEDLEMAN (33RD): Senator Formica.
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SENATOR FORMICA (20TH): Thank you very much , Mr.
Chairman, morning. Good morning, Senator. My
questions were going to be around Section 6 as well
and the auditors. But we had a forensic audit
performed on this and did I hear you say that those
results were not implemented and you are asking them
to be implemented within.
SENATOR SOMERS (18TH): We did. The legislature
required a forensic audit and that is why it was
wonderful that we had the ratepayer advocate because
CMEEC originally chose their current auditor that
they were using to do their standard audit. We
thought that was a conflict of interest as did the
ratepayer advocate so they had to go back and rebid
for a forensic audit which was just completed and
there was some questionable findings, some of them
are what I just mentioned previously. Yes there’s
other findings in there. One of the findings was to
not allow CMEEC to hold these different accounts for
municipal electric companies. I would like to make
sure their findings and recommendations are
implemented at CMEEC. I can’t say with any certainty
if they have or they have not that is why I am
asking that they are within this Bill.
SENATOR FORMICA (20TH): So is there a mechanism for
them to be applied? Is there something that last
legislation forces them to do it? We just had this
forensic audit performed, they come up with all of
this stuff and then it is going to be up to the
Board to implement or not?
SENATOR SOMERS (18TH): That’s the way I read the
last legislation so that is why in this legislation
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I’m requesting that the findings of the audit be
incorporated into their practices.
SENATOR FORMICA (20TH): So the people that have
been indicted are pretty much been removed from the
daily operation as far as I understand and do you
feel that they’re beginning to move forward in a new
direction with these people under the eyes of the
consumer advocate?
SENATOR SOMERS (18TH): I think that they are making
some slight movement, some slight changes. Yes I
will give them that but there is still somethings
that have not moved. One of the things in
particular is the transparency, is the accounts, we
need to know, we need to verify that they’re not any
longer going to have those accounts. We need ensure
that after they enter into an agreement there should
be nothing that is trade secret or confidential
about energy when you look at except maybe the
strategy on how you get the rate that you do but
that is something that is not necessarily public. If
you look as sister organizations like this
cooperative in other states after a certain period
of time all those contracts become public, just like
they do with Eversource. They are published and
they are put on a website. That is something that
would instill transparency here. There is a budget
that is provided but it’s still redacted. You can’t
if you are a customer from a municipal electric
company from what I’ve been told from customers and
you ask for the backup on a line item charge it is
not given. I don’t think that shows transparency in
the ratepayers and that is where we’re going again.
These municipalities have a defined territory. They
don’t have competition in their territory and they
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were set up that way because there were the most
distressed community and during the last legislation
we heard, well we provide the cheapest rates on the
market but we found in fact that’s not true. One of
the municipal electric companies withdrew from this
organization, they could purchase power on the
market cheaper than CMEEC could provide it. And I
can give you another example, there is a customer
who owns two McDonald’s in one of these territories.
One is outside of CMEEC’s territory and Eversource
and one is within CMEEC’s territory. Same amount of
power, same overall operating times and budgets and
yet the one that is in the Eversource territory has
cheaper power than the one in the CMEEC territory. I
don’t know if she has submitted testimony but she is
somebody that you could definitely talk to. So I
think we need to have better transparency, we need
to have better communication, we need to make sure
the ratepayer advocate stays on the Board. I would
argue that we should consider having two Governor
appointees put on that Board just like they do in
Massachusetts to also provide true transparency. In
Massachusetts those board members are not paid.
They are paid here in Connecticut. They get paid
$600 dollars a meeting and I believe it is $200
dollars or $300 dollars to call into a meeting.
Those are things that are all very different and
same type of organization but, you know, the one in
Massachusetts is much more in its lane than I see
CMEEC.
SENATOR FORMICA (20TH): Thank you and Mr. Chairman,
I have one last question. We’ve been dealing with
this for some time and thank you for your advocacy
and the advocacy of this Committee to kind of move
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these Bills forward. Are we getting to a point
where, you know, when is it going to be worth this
and do we need to have this organization do what
we’re doing and what they’re doing in light of your
last comment or, you know, is this something that,
you know, the legislature needs to step in and said
there’s too much, to much going on here that, you
know, can we say this going forward or, you know,
where do you think we are in this process?
SENATOR SOMERS (18TH): Well, I mean that’s a very
good question and that was the question that we
asked two years ago. We were told that, you know,
if CMEEC went away that the lights would go out but
that is absolutely not the case. Since they have
been, since they were formed there is many other
organizations that do the exact same thing that
CMEEC does. I keep saying MMWEC in Massachusetts is
someone I’ve spent hours with them on the phone and
one of the questions I did ask them was tomorrow if
CMEEC did not exist they could certainly handle all
of the power agreements with the municipalities
tomorrow if they had to. There is, I think it’s
called Energy New England, that is where Wallingford
went when they pulled out of CMEEC. You can go
direct to the market. Some of the larger companies
that I talked to have their own, because energy is
so, such a big cost in Connecticut they have their
own energy department and they could negotiate their
own purchase power agreement directly. So that is
something that I think the legislature needs to
think about. And if CMEEC can under the prevue of
this Committee, if they can get back in their lane,
if they can provide transparency, if they can start
realizing they are a non-profit really, a
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municipality, that is what they are designed as and
behave in that manner then it is worth pursuing but
if we’re gonna have to have this every year I would
question that. I mean you just think of the
expenses I just listed off that were found in the
audit those are just absolutely, this is ratepayer
dollars. When I knock on doors, there’s little old
ladies in the areas that I knock on that can’t pay
their electric bill and we’re spending $13,000
dollars on bands for parties, and massages and
artwork. It’s completely lost it’s way and that’s
why I think it needs to be really reigned in or this
Committee can decide if it should still go forward.
There are other organizations that could fill the
need but that’s just my opinion.
SENATOR FORMICA (20TH): Thank you very much,
Senator. Thank you for your hard work on this and
thank you, Mr. Chairman.
SENATOR NEEDLEMAN (33RD): Representative Meskers.
REP. MESKERS (150TH): Two questions, one the
energies provided to distressed municipalities, I
assume that involves state aid or assistance to the
individuals who receive energy as well.
SENATOR SOMERS (18TH): I would have to look, but
yes these distressed municipalities the towns that
were chosen to be part of this cooperative was
because they were the most distressed communities at
the time. I am certain that there are individuals
within those communities that are getting energy
assistance, etc. I am sure they are but I don’t have
that number.
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REP. MESKERS (150TH): Right because from your
testimony you’re indicating that the energy costs
that they are providing are higher and yet I am
assuming state aid is going to the individuals so
not only are they “charging or overcharging” the
individuals in their district but the State is also
then funding over priced energy in this scenario?
SENATOR SOMERS (18TH): I should be clear in my
testimony. I can tell you that in the case of
Wallingford when they pulled out, they were able to
purchase power cheaper than CMEEC was able to
deliver it to them. I don’t know if that is the
case in every single case. I could only give you
the example that I have on the person I talked to
has actually two identical businesses one in a CMEEC
territory and one not to give you a comparison.
That could be the case, I really can’t say. I know
that two years ago when we compared the rates there
were not the cheapest on the market. That could
have changed at this point so I can’t answer that
specifically but I see what you’re saying.
REP. MESKERS (150TH): Yeah, because I think part of
our review of their, apart from the discussion on
questionable expenses would be are they actually
fulfilling their role of providing cheaper energy
costs. So that’s got to be very important to us.
And secondly the policy on spending or paying for
the legal defense. Has the Board established that
all the activities on which they are being charged
are within their purview as they saw it or they’ve
just decided to pick up the legal defense?
SENATOR SOMERS (18TH): You probably will have to ask
them that specifically. What I know is that as a
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Board member you are, I believe that you are held
harmless so to speak until and it is the policy that
they pay your defense until you’re found guilty.
I’ve been told that they will seek the return of
those funds should someone be found guilty or, you
know, decide to go with a plea but I would like that
in writing so I would like to make sure that if a
Board Member, CEO anybody to do with CMEEC if they
are indicted on a criminal charge, on FBI charges
and CMEEC which is ratepayers are now paying for
their defense which I think the cost is close to
$500,000 dollars at this point that should they be
found guilty those funds are returned to the
ratepayers. I think that is imperative.
REP. MESKERS (150TH): Yeah, I think that is very
important that we look into that to the extent that
they are duly authorized and engaging in their legal
responsibilities as a board I can see how we would
cover them but if they are exceeding their mandate
or taking decisions that are outside of their
charter than the question should we defend or paying
for the defense. So thank you.
SENATOR NEEDLEMAN (33RD): I think Representative
Cheeseman had one more question.
REP. CHEESEMAN (37TH): Thank you, Mr. Chair for the
second time. Just relooking at Section 7, lines
444-447 which would involve projects that they
undertake, looking at the Public Hearing testimony
and then refreshing my memory I see there has been
testimony submitted by Backus Hospital in opposition
because CMEEC helped them build a ten megawatt
microgrid in 2015 and I was actually at the ribbon
cutting for the fuel cell installation at the
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subbase which was done in conjunction with the DOD
and the State of Connecticut. If this went ahead
would this section not preclude them from entering
into those agreements? Would you want an additional
layer of scrutiny because those do seem to be
worthwhile endeavors for me both in terms of helping
those, particularly a hospital, provide critical
backup services and for the subbase again and backup
for them and nearby community in the case of grid
power failure so I would love your insight on that
because I see your point that they shouldn’t be able
to do things that are out of their lane but this
seems to me to be in their lane and also promoting
the interest of the customer. So I would love to
hear your comments.
SENATOR SOMERS (18TH): I think if this is in their
lane and it has to do with a delivery of power then
it should be acceptable. There is no reason that in
certain areas like that or obviously what is going
on at the Navy base couldn’t come and get approval
to pursue going forward. But we have to be very
careful so that they stay in their lane.
REP. CHEESEMAN (37TH): Right. So you would prefer
that there be some sort of formal approval process
for any new project going forward. I’m just curious
how this would play out.
SENATOR SOMERS (18TH): I think that it is important
obviously to have to go outside their territory to
purchase power, that’s clear. But if they are going
to be getting into, you know, other areas that are
not under their statutory enabling, you know,
language which was really just to purchase power and
deliver it to the municipality at the lowest cost,
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then they’ve got to come for approval. If we don’t
have some type of control and oversight, I’ll put it
that way over this organization we can see what
happened. I mean we saw it with the trips, we’re
seeing it with these expenditures that are
outrageous so we have to bring them in under some
kind of oversight or governance and should it be
that maybe this Committee decided that we should
have two Governor appointees on there along with a
ratepayer that is just a suggestion. Those things
could come for approval and be approved before they
go forward.
REP. CHEESEMAN (37TH): Obviously that might be an
area in which PURA oversight because the auditors
and DRS are ex post facto as it were. All right
thank you very much for your answer and thank you
for your indulgence, Mr. Chair.
SENATOR NEEDLEMAN (33RD): Representative Davis.
REP. DAVIS (57TH:) I didn’t get your attention, Mr.
Chair but Representative Cheeseman asked the
question that I was goin to ask, so we will move on.
REP. PERONE (137TH): Thank you very much, Mr. Chair
and thank you for your testimony. I had a question
so basically the way the legislation is currently
written is it would curb or disallow municipal power
companies to invest in bulk power projects?
SENATOR SOMERS (18TH): That is not the way it’s
intended.
REP. PERONE (137TH): Because on lines 444-447 this
allows power company investing in these kinds of
projects so that’s not the case?
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SENATOR SOMERS (18TH): Again it depends on what the
project is and I think it would have to come back
for approval. When you look at their sister
organizations in another state, outside of the lane
of just purchasing power and you know, basically
passing it down to municipalities they have to come
back to the legislature for approval. So perhaps
here would set it up where they would come back to
maybe this Committee for approval into those
markets.
REP. PERONE (137TH): Thank you for that. I mean
just so you know where I’m coming from, I mean I
think that my concern is that there is a lot of, in
addition to what has already been passed there is
additional layers of oversight which I feel, you
know, logically could actually drive up rates. So I
feel that when you, you know, do things that curb
revenue streams for these power entities it is
something we have to be very cognizant of and be
careful of how we deal with it. So I thank you for
your testimony.
SENATOR SOMERS (18TH): So yeah, I will say my
concern with going outside the lane is because I’ve
had a direct conversation with a former, I guess he
is now the former CEO who is now looking at 70 years
in prison who said to me face-to-face in a
conference room upstairs, “I will do whatever I have
to do to make sure that the money is generated for
CMEEC so that it can continue” and factiously I said
would you be willing to enter an agreement with a
cotton candy company and he said, “If I have to.”
That’s my concern.
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REP. PERONE (137TH): Yeah well and that’s fair. I
mean but again I also have to be fair to the
ratepayers in municipal power companies in my
district, nobody went to jail and, you know, this is
an issue that I think we just have to make sure that
the care is not disproportionate to what we’re
trying to do. I think the legislation that went
through 1773, you know, laid the groundwork. I think
certainly the forensic audits that both of them have
weighed in and I think that, you know, going forward
looking at that as guidance make sure we’re doing
the right thing by the ratepayers is key and so.
Thank you.
SENATOR NEEDLEMAN (33RD): Senator Fonfara.
SENATOR FONFARA (1ST): Thank you, Mr. Chairman.
Good morning, Senator Somers. How are you today?
Great, great thank you. So I am a little confused
because all my years on this Committee the CMEEC
towns or any municipal electric town was well know
that they enjoyed much better rates for their
customers than our utilities Unite Illuminating and
Eversource. Can you tell me what do you know that
this Committee doesn’t know, what’s changed that now
is different?
SENATOR SOMERS (18TH): Sure, you know, I don’t know
what this Committee knows so I am not sure that I
could, you know, tell you.
SENATOR FONFARA (1ST): Let me ask it another way.
What’s changed from what has historically been know
about the rates and I understand that there are some
representatives of member towns, maybe
Representative Perone can say what the rates are in
his town or Norwalk but it’s long been understood
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that the rates that towns that are members of the
CMEEC enjoyed 20-30 percent better rates than the
investor owned utilities so do you have information
that is different than that?
SENATOR SOMERS (18TH): I can share with you, but I
don’t have it in front of me, but we would expect
that member utility companies would at least be 15
percent less because they are not paying the taxes
that the other utilities are. But what we found,
and I can show you the example, again I don’t have
it in front of me, but I’m happy to submit it on two
different business, same business, one town in CEEMC
one town not in CEEMC with significant savings as an
Eversource customer versus the CEEMC customer. We
can tell you that when Wallingford pulled of CEEMC
it was able to purchase power cheaper on the market
than it was getting it through CEEMC. I can tell
you that businesses that I’ve been to and I’m happy
to share with you the detail afterwards have said if
CEEMC went I could save one-third on my electric
bill and, you know, I spend $20 million dollars a
year on electricity. It’s a significant, you know,
price point for me here a company in Connecticut. I
don’t have the residential rates in front of me to
compare them but that is what I can tell you that I
found. So, I would agree but if they will be
transparent then we can see if it is accurate or not
I guess.
SENATOR FONFARA (1ST): So Senator are, do you know
the towns that are members, that have membership in
the CEEMC currently? How many towns are there?
SENATOR SOMERS (18TH): There is Norwalk, South
Norwalk the second taxing district. There is
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Bozrah, Groton, Norwich Utilities and Jewitt City,
six.
SENATOR FONFARA (1ST): Is this a voluntary
membership organization?
SENATOR SOMERS (18TH): You know I think that this
was setup in the ‘70s and the legislature picked the
seven most distressed communities. Wallingford was
in there at that point before they pulled and yes, I
believe they were able to decide if they wanted to
be part of the cooperative or not and it was
designed for that. CEEMC could go out and basically
bulk purchase a purchase power agreement.
SENATOR FONFARA (1ST): But it is a voluntary
organization?
SENATOR SOMERS (18TH): It is but try to get out of
it. There’s no exit clause. So if you’re a small.
SENATOR FONFARA (1ST): Didn’t you say that
Wallingford exited?
SENATOR SOMERS (18TH): Yes but they had to sue to
exit. It wasn’t something that they could just
decide, okay we’re gonna get out and they went to
court with CMMEC over having to get out of their
agreement. One of the things.
SENATOR FONFARA (1ST): Has any member town
subsequent to the activities that the legislation
that we passed in 2017, has any town sought to leave
CEEMC?
SENATOR SOMERS (18TH): Not that I know of but again
they can’t just leave, they have to sue. So if you
are a small town how are you going to sue and the
way that the votes are weighted which flies in the
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face of a joint agency action committee, if you look
at a Massachusetts version or another version in
another state, the idea of a joint action agency is
so that everyone shares equally. So in
Massachusetts it’s one municipality, one vote. Here
it is weighted so you two, Norwich and Groton
control all the votes. The other people could
basically not show up and not be able, they don’t
have a vote. It doesn’t matter. So that is another
thing that needs to be changed so that it is more
fair and equitable for all the members.
SENATOR FONFARA (1ST): Does your legislation, if
according to you that you have to sue, does your
legislation seek to change that policy?
SENATOR SOMERS (18TH): We have written in that we
would like you be able to exit, obviously you would
have to finish your contract with them if you have a
contract for power, most of them are long time, you
know 10 years some of them are 20 years so you would
have to be able to fulfill that or come up with a
bond to be able to cover that but yeah, I think
that’s something that absolutely should be
considered.
SENATOR FONFARA (1ST): So if I could take another
moment with respect to Representative Perone’s
comments regarding whether the cure is worse than
the problem. But for the Committee’s benefit those
that were not here to vote on the legislation which
isn’t even fully two years in its implementation
these are items that were in that legislation that
is now law. What was added was ratepayer
representative from each utility service area in
addition to the member that comes from the
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particular town created a municipal electric
consumer advocate appointed by the Consumer Council
of the State of Connecticut that the consumer
advocate reports quarterly and annually to the
Consumer Council, implemented annual reporting
requirement to the General Assembly including to
this Committee, increase budget process
transparency, a five year forensic examination and a
monthly reporting on Board related expenses, updated
website to meet mandated pre and post meeting
publication requirements. And then subsequent to
that CEEMC has voluntarily put together these
requirements on itself: Public board report and
board meeting requirements, implement a new ethics
and conflict of interest and travel policy related
to training the board and staff, modified
indemnification policies with input from the
consumer advocate, formalize council review
requirements and exercise of executive session,
place the CEO and CFO on administrative leave
pending the investigation, retain independent
outside counsel to conduct the investigation. Those
are all things that were either done by legislation
or voluntarily done by CEEMC subsequently.
Senator is that, isn’t that pretty touch enforcement
in terms of addressing some of the, or the issues
that caused the legislation to be crafted in the
first place?
SENATOR SOMERS (18TH): Why I applaud some of the
items that CEEMC has done those have been just
recently, quite frankly, like within the last couple
of weeks and the advocate reduces their salaries
reduced over time so I think that is something that
should be maintained. What’s change in the last two
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years we’ve had five Federal indictments on Board
Members, CEO’s and CFOs of CEEMC so that has changed
since the last legislation. We didn’t have the FBI
indictments. We also didn’t have CEEMC paying for
the defense of those who have been indicted and
CEEMC still and municipal electric companies have
not provided transparency, they still redact
information, they still don’t give information to
customers should they ask what the line item charges
are. So there’s things that although they’ve made
some baby steps, and I know it’s been a lot of work
but they’ve put themselves in this position by doing
what they did. They needed the oversight. It’s not
something we sought out to do on our own, but we
need to have, if we want to be able to say that
CEEMC and the municipal electric companies provide
the best rates on the market, then show us, have
your contracts become public just like they do in
Massachusetts, just like our regulated utilities
have to do after a period of time. There is nothing
trade secret, you can’t hide behind that any longer.
Or else how do ratepayers have the confidence that
what they are telling us is the truth based on their
history of how they behave. So I think that yes,
they have done somethings they would not have done
them should the legislature not have passed
legislation but we need to do more.
SENATOR FONFARA (1ST): So there’s been questions
regarding Section 7 of your Bill involving what
investments CEEMC can make and it is my
understanding that investments they’ve made in
general are those that are paying significant
dividends to ratepayers that are CEEMC customers or
member town customers to a total of some $15 million
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dollars annually that I would assume goes to the
bottom line in terms of reducing rates that CEEMC
customers pay, are you aware of that, Senator?
SENATOR MINER (30TH): Well then they can show us in
the rates that they provider to their customers.
That would be great.
SENATOR FONFARA (1ST): It’s public knowledge, I
understand what the revenues, what they’re
receiving.
SENATOR MINER (30TH): If they were making this
large amount of money, I guess profit margin,
whatever you want to say, is that going into the
rate stabilization and then they are lowering the
rates for their customers? I haven’t seen that.
SENATOR FONFARA (1ST): Well there has been audits
done since what happened back a couple of years ago.
I’m sure they would identify those things. But I
would just like to read what those investments are
for the benefit of the Committee: Microgen Eagle
Generator which is for reliability purposes and for
financial benefit that’s a $7 million dollar benefit
to CEEMC customers, a power plant, the gas turbine
power plant is again about financial and reliability
benefit, Hydro Quebec Transmission Line,
Distribution Generation Battery Storage, Community
Solarguard and the sub-based fuel cell mentioned
earlier. Again a total of about $15 million dollars
annually that benefits the ratepayers of CEEMC.
Your legislation would prohibit most of those
investments.
SENATOR SOMERS (18TH): As I said before they could
come in front of this Committee to, you know, ask
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for approval to be able to invest in that and as far
as everything you’ve listed, you know, I’ve heard
that repeatedly that we’ve invested in this
hydropower or Microgen and it’s providing benefit
for CEEMC customers, I would like to have them be
able to submit the calculations and show us those
numbers because unless we have the numbers and the
details and the balance sheets to prove that, the
numbers really saying it means nothing to me. I
need to see it. And I think that something that has
not, I have not been able to receive that, again we
hid behind trade secret in our investments. So
maybe if they are not willing to give us that
information and be fully transparent then this com
could decide to not allow them to make that
investment until we can actually see the numbers, I
mean they’ll say we provide this great value but
there’s no numbers to back it up. That’s my issue.
SENATOR FONFARA (1ST): Thank you, Senator. Thank
you, Mr. Chair look forward to hearing from others
who are part of CEEMC I understand are signed up to
testify today. Thank you.
SENATOR NEEDLEMAN (33RD): Anyone else? Thank you,
Senator Somers.
SENATOR SOMERS (18TH): And I also did bring you all
the article and the 13 editorials that have been
written on CEEMC. I will leave you a copy of it if
you are interested in looking at it.
SENATOR NEEDLEMAN (33RD): Leave it with the Clerk.
Thank you so much. Representative O’Dea.
REP. O'DEA 125TH): Dear Co-Chairs Needleman,
Arconti, and Ranking Member Formica and
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Distinguished Members of the Energy and Technology
Committee, my name is Tom O’Dea and with me is Troy
Vanbell the Vivint Solar Northeast Sales Director.
Troy is going to give a brief statement, I’m gonna
give a brief statement. In the interest to save time
I figured I’d have him up here to answer the touch
questions. I think it is appropriate for us to
follow the previous testimony by Senator Somers as
Justice Brandeis said, “Sunlight is the best
disinfectant for public corruption” and we’re here
to have another alternative for sunlight and that’s
power. So I appreciate the Committee giving me some
moment here to testify and I’ll turn it over to Troy
for now.
TROY VANBELL: Good morning, thank you everybody for
this opportunity. My name is Troy Vanbell, once
again I am the New England Director of Sales for
Vivint Solar and actually I moved here four years
ago. I’ve been traveling with the company for about
eight years in the industry opening up new markets
and the last market I ended up with was here in
Connecticut and it’s been really good. Our business
has done very well. We currently have about 80
employees and 150 that are affiliated with us in the
state and this year is actually going to be one of
our best years as a company.
But in the background we have looming HB-7251 and
what this Bill does just to simplify, and you’re a
customer for example and you own solar right now and
you are in this building, in this room and the
system is producing power for you, you would hope
that you could use that power later in the day,
maybe at night when you get home with your family
but his Bill prevents that from happening. It is a
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buy-all, sell-all and you don’t get credit for the
power that was generated. And I own a system at my
house is Southington and I can tell you that if I
produce power that I would hope that I could use it
later whether it’s at midnight or 6:00 p.m. once the
sun has set down. We work with homeowners every day
and what I can say is that they love solar. They
love having the option of producing their own power
and using it when they would like and HB 7251
prevents that from happening and hurts our business
dramatically moving forward. Thank you for your
time.
REP. O'DEA 125TH): Briefly if I may, I am
testifying I know it lists 7151 when I think but I’m
actually testifying on 7251 and I am specifically
requesting that it be modified in order to yield a
better outcome.
A number of years ago I researched putting solar
panels on my roof in New Canaan, Connecticut.
Unfortunately between the tress and the bad
direction I was pointing I couldn’t do that. That
said, I am still very interested in the growing
industry and I didn’t know how many people were
actually employed by solar in Connecticut. Many of
them are here today. I think it is about 2,200.
I’ve become increasingly concerned about the impact
of SB 9. I supported it and I think it’s good
legislation but I think we need to fix it. Everyone
I’ve spoken to agrees with me that portions of
Senate Bill 9 could be and should be improved.
Senate Bill 9 has the potential to devastate further
growth in the solar industry in Connecticut and so
the good news is we can fix it and do right by the
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many businesses that are here and the 2200 employees
in Connecticut.
I believe HB 7251 is a step in the right direction
but it is not yet a solution. We need to give PURA
the tools to examine a multitude of successful
programs not just the two options that they
currently have. We need to ensure there is a study
on the value of solar. The stakes are high and they
are too high for us to tie PURA’s hands behind their
back with having a look at only two policies.
The best and fastest way to improve our State’s
fiscal situation is to assist the private sector in
growing private sector jobs. As well all know
according to the March 2018 final report of the
Connecticut Commissions on Fiscal Stability and
Economic Growth Connecticut is the only state with a
negative GDP from 2007 through 2016 and it was a
negative 7.9 percent. Connecticut’s solar industry
has good clean energy jobs and needs to be supported
not destroyed. This Bill with changes allowing PURA
to study more than just two options will allow
businesses to grow including net metering. We need
to look at net metering as a way to continue the
growth of the industry and help it to thrive.
So, I’m looking forward to answering questions. I’m
sorry I didn’t introduce Kyle Wallace is Vivant
Solar’s Markets and Government’s Affairs Manger for
the company. He is here to answer questions better
than I can. Thank you
SENATOR NEEDLEMAN (33RD): Thank you, Representative
O’Dea. Representative Lanoue.
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REP. LANOUE (45TH): Thank you for your testimony, I
appreciate you guys being here today. I just want
to get a little more understanding on this 7251.
Essentially right now you have net metering so
somebody puts the solar panels on their home, they
produce excess energy, they get it in terms of a
credit almost like rollover minutes in this field
of, if that’s the appropriate analogy. Now under
this Senate Bill 9 that was passed last session the
buy-all, sell-all. So you produce a bunch of, you
produce all this energy with your solar panel
theoretically, you have to sell it all back and then
they sell it back. You have to sell it all to the
grid and then they sell it back to you at a reduced
rate. Am I understanding that correctly?
KYLE WALLACE: Yes, that’s correct. That’s how they
work.
REP. LANOUE (45TH): Okay, all right. So what would
be the incentive for me to put a solar panel on my
house at that point?
KYLE WALLACE: It would definitely be a reduced
value to homeowners, they would still be getting
compensated somewhat for the energy they produce but
not at the current rate that makes it economical
today so that would be much more challenging to get
that to work in the long-term.
REP. LANOUE (45TH): Okay so if I am understanding
this correctly so what you guys are seeking as far
as some type of a language change would be in
addition to the buy-all, sell-all instantaneous
netting allow PURA to explore all options as far as
what would be the best option to replace net
metering, am I understanding that correctly?
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KYLE WALLACE: Yes, that’s what we’d prefer.
There’s a lot of other options out there that can be
simpler and still benefit homeowners in a way that
would make solar attractive and we just want to be
able to look at those alternatives.
REP. LANOUE (45TH): Okay, so it’s your position
right now, you’re pretty much, its pigeonholing PURA
into two options as opposed to the broad view?
KYLE WALLACE: Yep
REP. LANOUE (45TH): Okay, thank you for your time.
SENATOR NEEDLEMAN (33RD): Representative Meskers.
REP. MESKERS (150TH): I am a big supporter of solar
energy, I’m laser focused, but then of course you
know there is always a caveat. My understanding of
the pricing that we’re engaging in now is the
pricing because solar energy at some level has less
value in that it reaches it’s obviously peak during
sunlight hours? The solar panel process where we’re
installing is not necessarily, are not built with
battery supplies and backup supplies at the
homeowners residence.
REP. O'DEA 125TH): Yeah.
REP. MESKERS (150TH): Right. So the problem, so I
support this but I understand that the problem as I
see it is a problem of the whole grid and system so
without having a backup energy system, I still have
to pay, to have installed capacity that’s stranded
until we get to peak hours of demand and so if I
begin to grant a lot, if we change the solar, its’
not gonna necessarily improve the overall productive
capacity at night time or different times, I still
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have to have energy capacity and charge the other
ratepayers to carry that burden. So there’s an
issue of where the burden ends up and where the
benefit ends up. So that’s part of the problem
conception where we stand, I think on this. So I’m
not against it but we will have to look when we look
at the metering to figure out if we start giving you
the same price in and out, what does that do to the
whole burden sharing for the rest of utility
ratepayers and how are we gonna be able to reduce
our overall generating capacity at the big
generators? Because ultimately without the storage
we don’t really get the benefit other than solar
being a cleaner and better form of energy it does
create that problem that we don’t have the backup
system in place.
KYLE WALLACE: Yeah, and I think those are some fair
points. I think that what we’ve seen in other
states that have helped to develop energy sourced
markets in addition to just solar, like in
California has tiny use pricing with net metering,
it can be combined and so the tiny use pricing gives
homeowners a price signal that for them to align
their usage and production and exports the grid in
ways that are beneficial to all ratepayers and help
lower costs for everyone. So that’s one of those
solutions that currently is not allowed under this.
So that is the prime example of what we would like
to look at.
REP. MESKERS (150TH): Perfect. As far as I’m
concerned I’m laser focused on reducing our overall
stranded installed capacity by getting good backup
on the solar energy site. Thank you very much for
that.
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REP. O'DEA 125TH): Representative I think you’re
spot-on. What I don’t want to see happen though is a
stopping of the investment in solar which this, in
my humble opinion, I think if we all looked at this,
this Bill will do. We want to encourage the
investment and have get the storage to catch up to
that investment rather than eliminating the
investment. But you’re spot-on.
REP. MESKERS (150TH): Well, I won’t come over and
ask for hug yet, but I agree with you [Laughter] 100
percent. I think when we look at the billing
process we will have to figure out the benefit we
can give to solar homeowners that some of that
benefit if we don’t give it to the homeowners goes
to building a storage capacity or we figure out how
we assess to get storage capacity built in the State
so we can get to green energy that we all want.
Thanks.
SENATOR NEEDLEMAN (33RD): Thank you.
Representative Cheeseman.
REP. CHEESEMAN (37TH): Thank you, Mr. Chairman.
Thank you for coming here today. What is the
capacity factor of solar?
KYLE WALLACE: That can range based on the storage
orientation and admin of a system but roughly
between 13 and 18 percent I think [Cross-talking].
REP. CHEESEMAN (37TH): Yeah, that’s the figure I
was looking at was 17 percent.
KYLE WALLACE: Yeah, yeah I think that, yeah.
REP. CHEESEMAN (37TH): So we’re not looking at a
terribly high capacity factor. What percentage of
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your installed solar panels are purchased as opposed
to leased?
KYLE WALLACE: I can say that in Connecticut the
majority are through lease or power purchase
agreements, I think that is close to three-quarters
based on data from the Greenbank and then the
remainder 25 percent is either bought outright or
through financed through a loan.
REP. CHEESEMAN (37TH): Right and I just, refresh my
memory, I understand that if you chose to sell your
house with those solar panels the purchaser doesn’t
wish to keep them on, once you’ve installed them you
have to return them to the company and repay the
contract price? I’m reading some articles from
other states where solar is more prevalent and
understand there have been issues.
KYLE WALLACE: Yes. So there are a number of
options for homeowners in that situation. They can
chose to purchase the panels outright then past
those on to the new homeowner. The new homeowner
can assume the contract, that’s typically what
happens. They can also payout the contract and have
them removed entirely if the new homeowner doesn’t
want ‘em and there is a bunch of different ways that
you can do that. We’ve handled thousands of those
type of transfers in our company and 98 percent of
them go through without any problems at all and then
the two percent are always resolved in some manner
that works for both the new homebuyer and the home
seller.
REP. CHEESEMAN (37TH): So do you find the majority
of home purchasers wish to maintain the contract in
your experience?
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KYLE WALLACE: Yes.
REP. CHEESEMAN (37TH): What’s your position in
terms of a lienholder?
KYLE WALLACE: Sorry, what was that?
REP. CHEESEMAN (37TH): What is your position in
terms of being a lienholder should there not be a
resolution.
KYLE WALLACE: So for our systems we don’t put any
lien on a home. We put a UCC Filing which is just a
notice to any potential buyer, helps protect the
home seller and the homebuyer that there is an asset
that someone else owns on this house. And so for
those filings we remove them when people want to
refinance, when we work with them there is no cost.
It’s just a way to protect our assets and a way to
protect the homeowner and it’s common practice in a
lot of industries to do things like that.
REP. CHEESEMAN (37TH): All right, thank you. Thank
you for your answers. Thank you for your testimony
today. Thank you, Mr. Chair.
SENATOR NEEDLEMAN (33RD): Anyone else? Thank you
gentlemen. Appreciate your time. Just as a quick
announcement, Room 1C will serve as a spillover room
until 2:00 p.m. I really request the people don’t
block the doors so we have safe access in and out of
the room. Mike Caron.
REP. O'DEA 125TH): Thank you.
SENATOR NEEDLEMAN (33RD): Mike Caron from
MIKE CARON: Good morning, Mr. Chairman, Chairman
Arconti, Members of the Committee. It is a pleasure
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to be here with you again. Michel Caron from
Connecticut PURA joining me is one of our, our
Acting Director of Judications Rob Listerbusch
[Phonetic].
First of all I just wanted to say that we’re very
grateful for the Committee both raising and
providing a Public Hearing for Senate Bill 960 AN ACT
CONCERNING MEMBERS OF THE CONNECTICUT GREEN BANK
BOARD OF DIRECTORS AND THE PUBLIC UTILITIES
REGULATORY AUTHORITY'S REVIEW OF CLAIMS ARISING FROM
CONTRACTS PREVIOUSLY APPROVED BY THE AUTHORITY.
This proposal stems from Connecticut Supreme Court
Decision in 2015 wherein the Court held that PURA
lacked jurisdiction to adjudicate this dispute
between an electric distribution company and a power
generator arising out of a PURA-approve contract.
Parties appearing before the authority after the
Kleen Decision have numerous times raised questions
about or have raised challenges about PURAs legal
authority to review and resolve disputes related to
utility services in contracts that have previously
been approve by PURA.
By enacting this Bill and specifically in section 2,
it will clarify with expressed language that the
authorities in fact empowered to review and
adjudicate disputes arising out of PURA approved
contracts where a public service company is a party
to the contract, the contract price is funded by
ratepayers and the purpose of contracts is for
public service company purchase products and
services for the benefit of ratepayers.
Moreover because these contracts are extensively
reviewed and approved by the authorities before they
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enter into force, PURA possess the familiarity of
the subject matter and of the statutory standings
giving rise to these contract as well as expertise
on our staff.
Finally in the Bill as proposed, in section 2,
PURA’s review of these contract claims would not
deprive parties of their ability to seek subsequent
review of the authorities decisions in the superior
court. This Bill will also not disturb any existing
contracts which contain clauses requiring dispute
resolution through arbitration or courts. That
concludes my testimony and we’ll be happy to answer
any questions you may have.
SENATOR NEEDLEMAN (33RD): Thank you, Mike Anybody?
I don’t see any.
MIKE CARON: All right, thank you.
SENATOR NEEDLEMAN (33RD): Matt Macunas from the
Green Bank.
BRIAN GARCIA: Members of the Energy and Technology
Committee, good morning. My name is Brian Garcia I
am President and CEO of the Connecticut Green Back.
I am joined by Brian Faruham our General Counsel.
We are there this morning to testify on SB 959, SB
960 and HB 7251.
On SB 959 we are seeking to enable the Green Bank to
access low-cost and long-term federal loan funds
from the United Stated Department of Agriculture.
Applying successfully for these funds from USDA
often terns on how an applicants enabling statute
fits the USDA criteria for these applicants. It is
our hope that the modifications recommended for our
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enabling statue will give the Green Bank a good
chance to secure these funds for Connecticut.
On SB 950 this a technical fix. As a result of
Public Act 16-212 a non-voting board member position
was removed from the Board of Directors of the
Green Bank. Despite this removal this subsection
still erroneously references two “non-voting”
members instead of one even though the previous ex
officio board position was removed.
On HB 7251 the Green Back is supportive of the
concepts proposed by the Bill with regards to
Section 1 on the ZREC-LREC extension, it would seem
that adding a year nine to the program would
establish the date certain of January 1, 2021 for
the net metering policy to transition to the
proposed tariff under Section 7 of Public Act 18-50
In a similar fashion with regards to Section 2 of
the proposed Bill on the residential solar
investment program by adding an additional l10
megawatts to the RSIP given the current run rate of
five to six megawatts of additional capacity a month
and our current capacity of 250 to 255 megawatts per
the policy a near date certain of January 1, 2021 is
also about the timing the transition from net metric
to a tariff compensation structure would occur.
The Green Bank sees it’s role in successfully
implementing Public Act 15-194 as achieving the
following three stated public policy goals:
First to achieve 300 megawatts of new residential
solar PV systems installed in the State before
December 31, 2022.
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Second to reduce the market reliance on incentives
through a declining incentive block structure.
Since 2011 we have reduced incentives by 83 percent
whereby they only comprise eight to ten percent of
the total overall installed cost of a project.
And third, most importantly to foster the sustained
orderly development of a State based industry
meaning that when we were done achieving the 300
megawatt public policy goal that the local industry
was vibrant enough to continue to sustainably
deliver an equal amount of systems to customers year
after year.
And if I might add, although it is unstated in
Public Act 15-194 the Green Bank has a fourth goal,
a commitment to ensure that solar PV is accessible
and affordable to Connecticut’s low to moderate
income families in minority communities. We have
just completed a report on this that we left in our
filings today. We see the benefits of a transition
to a tariff structure and the reasonable rate of
return approach set forth in Public Act 18-50 but we
first must ensure that the utilities have the
appropriate metering and billing systems in place to
handle the successful implementation of the policy
in terms or all compensation and timing options
which will require several years for them to put
into place. Over the last seven years the Green
Bank working with you, solar contractors, private
capital providers, DEEP, the utilities and HESS
contractors have created a $200 million dollar
market that has helping to deploy 60 megawatts of
clean renewable energy to help 7,500 families reduce
the burden of energy costs. With that we would be
happy to take any questions that you might have.
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SENATOR NEEDLEMAN (33RD): Thank you for that.
REP. GRESKO (121ST): Thank you, Mr. Chair. Thank
you Brian. I have a quick question concerning 959.
In your research have you identified funds, I don’t
want to say just waiting there to be applied for?
I’ve been working on something along with my
colleagues on trying to get the Federal Government
to recognize our COG system as county government so
we can apply for some funds that we now are not
eligible for. So in your research have you
identified funds, especially Ag funds that you, kind
of in the cross-hairs that you just need this pass
and then you’re gonna go after it?
BRIAN GARCIA: Yeah, I’ll invite Matt Macunas to
come up and join me, he has been our lead with the
Federal Government on this point. The Rural
Electrification Act of 1936 establishes programs
that allow for low cost federal loan funds to come
into states, specifically rural communities through
their energy efficiency and renewable energy
programs states can effectively access low cost
capital which we all know is very, very important to
advancing our clean energy economy. But they do
have specific eligibility requirements as to what
types of participants can become eligible. They’re
typically looking at competitive supplies, municipal
co-ops. We’ve been having ongoing conversations
with them for the past three years to see us as a
vehicle to deploy some of those funds. We’ve
actually provided them with this draft legislation
to ask them the question of does this get us over
the hurdle of you seeing Connecticut as a place to
invest your funds. But let me turn it to Matt to
offer some additional thoughts.
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MATT MACUNAS: Sure, Hi. Matt Macunas, Legislative
Liaison. It’s kind of like the bible for energy
policy here PA-07024, 1180 things like that. USDA
looks toward the Rural Electrification Act of 1936
so that is where they derive all their statutory
authority though Federal Code for that lending.
They’ve got a variety of programs that split out
underneath that for various targeted beneficiaries.
It’s general lending authorities that we are seeking
to establish that conduit with right here. The
Federal Farm Bill intends to be what update that
federal program and, this is only hearsay I’ve heard
that the most recent one might have extended out the
rurality definitions of the traditional population
bounds that they are limited to for the Rural
Electrification Act. It might be inclusive of the
larger metro area. We need to do the research on
that to figure that our for sure. It is something
that I’ve heard that might be extensible so that
could be a good thing for your proposal for counties
in that case. There might be something, so.
BRAIN GARCIA: So we continue to be very persistent.
We are trying to identify opportunities with the
Federal Government. Another example might be in
2016 the Green Bank Act, the National Green Bank Act
sponsored by Representative, Congresswoman Estee and
Senator Murphy. Our belief is that this year
Congressman Hines is going to rerelease the National
Green Bank Act which would effectively capitalize
the Department of Treasury with $50 billion dollars
that it can loan to states at low interest, at low
cost to support it’s various clean energy and
climate change policies. So we continue to try to
find ways of engaging the Federal Government in ways
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that will lower Connecticut’s energy costs while at
the same time deriving more clean energy deployment.
But as you can imagine it is a maze to try to work
through there and it’s a challenge but we’re
persistent, we’ll get there.
BRIAN FARUHAM: I think you’re feeling some of our
pain. It is definitely getting those Federal
dollars is far from a slam-dunk but anytime we can
open up an opportunity which will potentially drag
those federal dollars back home, that’s really what
it’s all about.
REP. GRESKO (121ST): And Mr. Chair if you wouldn’t
mind a second question on 7251? Listening to your
testimony to pause and maintain but how do you feel
about reevaluating the goals of the original SB 9
from last year?
BRIAN GARCIA: So I think the challenge for all of
us, right, is to balance our economic development in
jobs interest. We are trying to ensure fair costs
to all ratepayers. We are actually moving into an
era behind the meter renewable energy system where
battery storage is gonna start to play a bigger
role. When we start to think about solar power that
would be exported to the grid, we could now start to
have conversations in the coming year that power
will actually be stored and used when the homeowner
comes back at a peak time later on in the day. So
we will actually start to see more benefits coming
from households that pursue solar in battery
storage. So we want to ensure the preservation of
the local industry, we are all very committed to
jobs in the industry that we build here in the
state. We want to ensure that this technology is
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made more accessible to low to moderate income
families who, you know, any reduction in the burden
of energy costs to them plays a significant role in
their overall household income. So that a really
important part. You know, we had always, we didn’t
anticipate Public Act 18-50. We had always just come
from the perspective of implementing Public Act 15-
194 which was the Resident Solar Investment Program
in net metering and when 300 megawatts was hit net
metering would continue to be the market, right. So
we’re currently at 30,000 households. We have about
850,000 owner occupied households so we are at less
than, you know, three to four percent market
penetration. So I find it hard to think that we are
cost shifting to other ratepayers at this rate. If
we have higher penetration rates maybe in the ten to
fifteen percent then we are starting to cost shift
but they’re also benefits that these systems are
providing as well. We know this past summer during
the heat and humid days of late June, early July
that these systems were producing at peak in
Connecticut and collectively reducing all ratepayer
costs across the New England region and in
Connecticut. So we are now working on a report to
value that and to bring to the conversation what
these systems are also doing to benefit other
ratepayers. So net metering is important. We see
the prospect of the tariff ahead of us. What I was
eluding to in the reasonable rate of return is a
really interesting aspect of Section 7 which means
that if in 2020, 2021, and 2022 the Federal
Government reduces the investment tax credit which
is what is going to happen then reasonable rate of
return policy under the tariff would require the
tariff to increase to offset for that Federal
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reduction. So the tariff actually gives us an
interesting ways to weather external impacts in our
market but we need to figure out how to get from
here to there and what we’re hearing from the
contractors is more time. We know we know we need
the metering and billing systems in place to be able
to appropriately cost solar PV out to customers and
I think what we’re looking at in terms of
potentially this date certain of a January 1, 2021
date, net metering to that point would allow us to
transition to this new era of pricing and consumer
compensation.
That covered a lot of ground there but I think we
see the potential of the tariff and we want to
constructively get there.
REP. GRESKO (121ST): Thank you. You answered all
of my questions too so Thank you, Mr. Chair.
SENATOR NEEDLEMAN (33RD): Representative Cheeseman.
REP. CHEESEMAN (37TH): Thank you. Thank you, Mr.
Chair. You say you want to be to qualify as a
Community Development Financial Institution. What
preciously would that involve?
BRIAN FARUHAM: [Not on microphone]. I don’t think
that Green Bank.
REP. CHEESEMAN (37TH): So you would create a sub-
entity.
BRIAN FARUHAM: That would be one potential option.
REP. CHEESEMAN (37TH): And through that you would
then apply to the Department of Agriculture for the
Rural Electrification?
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BRIAN FARUHAM: Yeah, and we’re open to other
potential options. We’re just trying to get USDA to
yes. I don’t think that the Connecticut Green Bank
could become a CFI but we could set one up and
hopefully then.
REP. CHEESEMAN (37TH): Okay so sort of under your
umbrella, your little cousin as it were. And I’m
getting back Representative Gresko’s point, one I am
constantly amazed by what areas are eligible for
Department of Agriculture loans. It was My
Children’s Museum in Niantic and apparently East
Lyme qualifies for Department of Agriculture loans
and I have been assured by the Governor that he is
in the process of seeking Federal authorization to
have our Cogs treated a county equivalence for the
purpose of federal loans. So I think it’s a step in
the right direction. Thank you for your answers.
Thank you, Mr. Chair.
SENATOR NEEDLEMAN (33RD): Anyone else? Thank you.
I just want to say probably the other person in the
room that’s actually done a series of USDA Loans,
they are a great agency to work with and they have a
great track record. They are not as bureaucratic as
many of the other agencies out there and we’ve done
a number of projects with them and I hope that it
works out. Happy to give you guys the authority to
do that, thanks.
BRIAN GARCIA: We may solicit your support, Senator.
SENATOR NEEDLEMAN (33RD): Call me anytime, I know a
few of them that are still there. Thank you. I
have to say one of the benefits of working with them
because they do a lot of municipal, quasi municipal
and non-profit, they do 40-year fixed rate loans
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which is almost, it is unheard of. I’ve never
actually seen an agency, low interest, 40-year fixed
loans for a wide range of contracts. So I think
they’re a great option.
BRIAN GARCIA: That’s a great point, if we can get
there you can understand all the benefit that can be
achieved with that long-term maturity and the low
cost capital it can really help us keep costs down
and decarbonize our system.
SENATOR NEEDLEMAN (33RD): Yeah, I don’t know of any
other organization that will lend you money for that
amount of time. Mayor Hendrick from Groton.
MAYOR HENDRICK: Good morning, Co-Chairs Senator
Needleman, Representative Arconti, Ranking Members
Senator Formica, Representative Ferraro and
Distinguished Members of the Energy and Technology
Committee. My name is Keith Hendrick, I am the City
of Groton Mayor and I am here to speak in opposition
to Raised Bill 961 AN ACT CONCERNING MUNICIPAL
ELECTRIC UTILITIES AND MUNICIPAL ELECTRIC ENERGY
COOPERATIVES.
The City of Groton owns Groton Utilities and own
Bozrah Light and Power as such I am the Chairperson
for the Groton Utilities Commission and for Bozrah
Light and Power Utilities Commission. Between
Groton Utilities and Bozrah Light and Power we have
57 percent ownership of CMEEC. CMEEC includes
Groton Utility, Bozrah Light and Power, Norwalk
Public Utilities, South Norwalk the third taxing
district of Norwalk and Jewitt City.
My major customers with Groton Utilities and Bozrah
are General Dynamics Boat Division, Pfizer,
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Submarine Base New London, University of Connecticut
Avery Point Campus and Air Gas. We also have
approximately 15,000 to 20,000 customers which are
residential and for full disclosure Senator Somers
does reside in the City of Groton and does have
Groton Utilities as her provider.
So the question is why do you have a public utility?
We have a public utility provides low cost,
reliability, good will with the local ratepayers and
the return to the municipality. My cost is
currently 15.7 cents with kilowatt hour compared to
Eversource which is at 20 per kilowatt hour, it’s
about a 25 percent increase if we had to go to those
rates.
Reliability, my outages are typically measured in
terms of hours as opposed to days and weeks with
Eversource. The return to the municipality from the
utility is about $4 million dollars directly to the
utility as well as Concerts in the Park, Concerts at
the Beach and other events that they sponsor.
How are we able to do this? We are able to do it as
part of the cooperative that is CEEMC. We get low
cost energy through hedges of betting, hedges of
power and also physical hedges from our projects.
CMEEC has power generation projects and one of the
things there is two parts of that. Last year it was
$12 to $14 million dollar direct return in money to
the utilities and more importantly there was an
offset of power as far as a deferred cost for peak
production periods. So for peak periods and we have
these generation plants they can offset the power
cost and therefor there is a cost that we don’t get,
that we don’t have.
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As you know Public Act 1773 was adopted and enacted
in November 2017 and it added a ratepayer
representative, it added the annual reporting
requirements to the General Assembly, the five year
forensic examination, the monthly reporting on board
related expenses, it added the MECA, it implemented
new ethics and conflicts of interest travel policies
those kinds of things. The MECA has provided some
benefit so therefore I have said in my written
testimony that continuing with having MECA there
would be okay but most of what MECA has identified
is after we have been transparent with things that
have been released, either through the forensic
examination or through board meetings or through
other things hat CMEEC is trying to change.
There were a couple of things that I wanted, the
other thing, since the enactment of Public Act 1773
there have been no new violations that have been
identified. The MECA has not identified any, FOIA
has not identified any, whistleblower hasn’t
identified any and the newspaper has not identified
any. So my recommendation is you continue with PA
1773. There have been no new allegations. The FBI
indictments resulted as a result of the initial
information that came out about the Kentucky Derby
and that’s what fostered 1773.
Now a couple of things on the paying of the
attorney’s fees, CMEEC is paying the attorneys fee
because there’s a judge order in regard to Ed Prior.
So we went to the judge and said, nope we don’t want
to do that and the judge said you have to do it
because a previous internal legislation from CMEEC
and since then there are things that are being
changed. CMEEC is looking at the findings from the
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forensic examination and the Board has already asked
for a plan of action and milestones to make sure
that those examination findings are going to be
implemented.
The weighted vote, I wanted to address that real
quick. We have not had a weighted vote. I do have
that option to call for a weighted vote but the way
it’s setup is that each municipality has two member
delegates and a ratepayer representative, so
everybody gets equal votes, equal footing on that
and when we have our meetings we follow Roberts’
Rules of Order. So as long as we have a quorum and
things come up we have a vote. There could be a
case where one of the municipalities doesn’t have
all its representatives there but the meeting is
still held as a result of the way we follow Roberts’
Rules of Order.
The FBI indictment was for specific individuals and
specific acts that they found, that they conducted.
It was not CMEEC in general. There had been no
allegations that CMEEC as a body of the Board of
Directors as a body are not doing the job that they
are supposed to do and not providing low cost power
to the MEUs and therefore to the ratepayers. There
has been a turnover of staff and there has been a
turnover of Board Members. Currently on the Board
Members we have 11 of 15 Board Members that sit
there now are new since May of 2017 and none of
those members were on the, none of the members when
to the Kentucky Derby. One of the challenges we do
have is that Senator Somers alluded to, mentioned
that Drew Rankin was voted back as CEO was because
he was indicted, we had not placed him on leave
without pay yet and so therefor the way this were
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set up we had to put that name on there. There are
also current members that are officers that went to
the Kentucky Derby but if you look at the reason
why, part of that is because if you look for
experience most of our member Board Members are only
a year to a year-and-a half one and so that is one
of the challenges. I do believe that in December
when we have a new vote that all those members will
be voted out and you will have new voices on the
Board at the office level.
CMEEC has stopped the margin fund that is self-
governing. As regards to FOI, as far as I am aware,
the State FOI Commission has not made CMEEC disclose
anymore than they already have disclosed and have
sent out additionally CMEEC in June of 2018, CMEEC
sent a 200 page Annual Report out to different
people including Senator Somers.
There was something about the formation of CMEEC.
Prior to CMEEC, MEUs were captive wholesale
customers of the CLMP who is now Eversource. The
MEUs were subject to price squeeze with CLP
wholesale rates, higher than CLP large customer
retail rates, stifling economic growth in the MEU
service areas. CLMP also imposed conditions of
wholesale services in some instances that prevented
MEUs from serving large customers. Connecticut MEUs
entered an antitrust charges again CLMP in pursuit
of rights to jointly purchase and transmit power to
engage in the wholesale market including acquiring
ownership in nuclear plants and regional interacting
transmission facilities. The result was Chapter 101
(a), section 7-233 of the Connecticut General
Statutes that allowed CMEEC to join, correction, to
form the Joint Action Agency. The antitrust case
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settlement secure joint transmission and generation
resources from CLMP to form the initial CMEEC power
supply for aggravate loads of MEU. CMEEC began
delivering power to MEUs in 1980.
SENATOR NEEDLEMAN (33RD): Excuse me, do you think we
could sort of wrap it up a little bit?
MAYOR HENDRICK: Yes, sir.
SENATOR NEEDLEMAN (33RD): Thank you.
MAYOR HENDRICK: So one last thing, one of the
things I’m concerned about is the withstanding
language, correction, the notwithstanding language
in Section 7. Basically what that’s saying is you
can do everything that you’re allowed to do except
you can’t. So all it’s gonna allow us to do is just
to purchase power and sell it to the cooperatives
and the legislation that allows projects, it allows
sell power in state and out of state and, like I
said that money, those monies and cost avoidance are
translated to savings down to the ratepayers through
the rate stabilization fund which offsets power,
power costs and gives us reduced cost and then I
also have a rate stabilization fund at the Groton
Utilities. We had a cost of service study done, we
actually raised rates but the cost of energy stayed
the same, customer’s bills stayed the same because
of our rate stabilization funds due to the money
that we had from projects that we put into our rate
stabilization fund. Thank you for your time.
SENATOR NEEDLEMAN (33RD): Thank you, Mayor.
Anybody have any questions? Senator Fonfara.
SENATOR FONFARA (1ST): Thank you, Mr. Chairman.
Good morning, Mayor. I think we have a few more
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minutes for this morning. You heard Senator Somers
testimony I believe.
MAYOR HENDRICK: Yes, sir I did.
SENATOR FONFARA (1ST): She made mention to the
requirements regarding an individual town exiting
CMEEC that one had to sue, is that accurate?
MAYOR HENDRICK: That is correct. Wallingford sued
but I don’t know that they sued to drop out as much
as they were suing as a result of one of the charges
that they felt was inappropriate. But Wallingford
has exited and they have also left some projects and
as a result there are projects that are out there
that are now, are coming back to the individual MEUs
to see if the MEUs want to pick up extra share in
those projects.
SENATOR FONFARA (1ST): If Groton were to want to
exit, what would it have to do?
MAYOR HENDRICK: Ask me that again, sir.
SENATOR FONFARA (1ST): If your town wanted to exit
CMEEC what would it have to do?
MAYOR HENDRICK: I honestly don’t know cause it’s
never really come up. We’re happy with the way
CMEEC is providing power to us, the cost of the
power, the way that we’re delivering power. The
concern that I have is that the one section, the
notwithstanding section, that could emasculate or
kill CMEEC and then therefore CMEEC goes away then
we’re left with Eversource or we have to go figure
out how we’re gonna provide that power. How are we
gonna get that power? Some of the smaller MEUs
would not survive that because they are not big
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enough in order to pick that up. Groton Utilities
might be able to, Norwich Public Utilities might be
able to but others might not be able to do that.
And so that’s one of the concerns that I have. The
other thing is this is a regional issue. I have an
electric boat here. General Dynamics makes, is
hiring 5,000 additional new employees in the next
five years for the Columbia Class they are building.
We have the submarine base there. We have worked
hard with the submarine base with the solar power
that we did with the cells there and with the fuel
cells they’re doin onboard to help them so that they
are resistant to any future attacks from BRAC. I
also have other large employers, Pfizer and Airgas
that could be influenced to relocate if the power
costs to them skyrocket or it is increased. And so
therefore that is a regional aspect, you’re talking
the Southeast Region of Connecticut and that is a
concern that I have with this Bill.
SENATOR FONFARA (1ST): Also are there any aspects
of 961 that you feel, I mean we’re, none of us have
all the answers, and this process helps to hopefully
find the best path with the issues that come before
us. From your perspective are there any aspects and
you don’t have to answer today if you can report
back to the Chairs of the Committee what aspects of
961 might be worth supporting from your perspective
in other member towns?
MAYOR HENDRICK: Well in my written testimony I did
support the continuation of the MECA at the $70,000
dollar level. I do think though if the MECA is
gonna do the job the MECA needs to do the job. And
what I mean by that either he is qualified to do it
or he’s not qualified to do it and I am against the
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additional $30,000 dollars for consultants and
things like that. He has, there have been some
recommendations he has made and that have been
embraced by CMEEC and by the Board and we have done
that. There are things that I think we might do on
our own. One of the challenges you run into is that
some of the problems that have been identified
occurred several years ago and now you have new
management and leadership there and we’re trying to
turn the corner and we need that opportunity to do
this. Some of this regulation is intrusive enough
that it is almost like trying to take somebody’s
pulse by putting your foot on their neck and that is
hard for us to do. And just because you can’t see
everything doesn’t mean that somebody is trying to
sneak around and do something underhanded. That is
a challenge that we face. I do think that in the
beginning there was a missed opportunity to go the
ratepayers and say, “We are sorry for what we did we
understand why you’re upset, we understand why
you’re made and this is what we’re doin to fix it.”
That opportunity was missed then but under the new
leadership that we have with the Board and with
CMEEC I see that we are trying to turn that corner.
SENATOR FONFARA (1ST): Thank you, Mayor. Thank
you, Mr. Chairman.
SENATOR NEEDLEMAN (33RD): Thank you so much.
Anybody else have anything? No.
REP. LANOUE (45TH): Good morning, Mr. Mayor. Thank
you for joining us today and testifying. I
appreciate it. As you know I’m the Representative
for Jewitt City which is one of the public utilities
in CMEEC. When I first learned that ratepayer
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dollars were going to trips for the Kentucky Derby I
was fuming, that’s unacceptable. You know I see
people working very, very hard in Jewitt City. A
lot of people are on fixed incomes. We have elderly
and to see those dollars being abused for people
going to the Kentucky Derby is unacceptable. With
that said, we need to make sure it doesn’t happen
again. I know you’ve addressed that, we’ve talked
about it but I’m just trying to understand. You
said in your written testimony here that having more
audits, a general audit would increase the
ratepayers rate fees? Did I read that correctly?
MAYOR HENDRICK: Well, yes. Now here’s way.
Anything that has to be done additionally that is
gonna cost money ends impacting the ratepayers and
that is the challenge that we have. Now somebody
needs to weigh out is that worth it doin that and I
don’t know that, I don’t know that an additional
audit would hurt or not hurt. I know there is gonna
be, the one thing that I’m concerned about is if
we’re doing forensic audits and I may have a
misunderstanding of this but if it is a five year
lookback and then I’m doing the next year and it’s a
five year lookback there’s duplication in that
redundancy so I wouldn’t like that but if you did a
five year, an every five years, you look back then I
could understand that and I could see the benefit of
that. On your first comment, I agree with you. I was
appalled. I was the Deputy Mayor then when this
first come out on Kentucky Derby and one of the
things I asked the Mayor at the time was did they
have any deliverables when they came out? Was there
an agenda? Were there meeting minutes? Was there
anything else and she said, “No.” I said they were
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on a boondoggle and they need to be held accountable
and two of the members that went, my director and my
finance director went there, they went through an
ethics hearing at the City of Groton and they were
found that they had violated the ethics policy and
there were things that they had to do and they have
completed those things and so in my mind, I put them
behind me because they have been held accountable
and we just moved forward.
REP. LANOUE (45TH): My, again my concern is that
this will happen again. Now where I struggle a
little bit, maybe I am over simplifying this, I’m
not an engineer, I’m not an electrician but there
was excess money essentially to take a trip to the
Kentucky Derby that didn’t effect ratepayers but an
audit would, that’s where I struggle a little bit.
MAYOR HENDRICK: Well I never said that, I never
said that the ratepayer money is ratepayer money,
whether it is used for just a good purpose or if it
used for an illicit purpose. So if it doesn’t get
back to the ratepayer I have some issues with that.
So I agree with you. You know, one of the things
that we’re starting to do now is when are meetings,
we’re having meetings at reasonable locations.
Another thing we’re doing is we’re not doing any
junkets. Junkets are off the table, period. We’re
also not doing any strategic retreats or anything
else. Now PA 1773 specifically talks about if
you’re gonna do those, it needs to stay within the
State of Connecticut but one of the things that I’m
trying to get us to understand is we need to stay
local. We need to be in touch with our ratepayers.
We need to walk in their shoes and we need to
understand why they were upset. We need to
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understand why they are still upset. There are
people that have come to me that have said, this
happened two years ago, why are people still mad.
And I’m like that attitude is the reason that CMEEC
is under the scrutiny that it’s under and the MEUs
are under the scrutiny they’re under. And I agree
with you 100 percent. Now goin back to trying to
answer your question any cost that we have, any
profits that we make need to get back to the
ratepayers someway. I don’t know what the cost of
the audits would be in time or in money but I agree
with you the junkets and Kentucky Derby, golf
outings and those kind of things, they are not okay
and I’m not sure what kind of group think got us
into that. That was before my time. I would like
to think that I wouldn’t have went but then again I
wasn’t offered that choice so I don’t know. But I
don’t think I would have went to that cause that
just doesn’t make sense to me. But because I think
that the money that we have should go to the
ratepayers to try to keep low rates.
REP. LANOUE (45TH): Okay, now the forensic
examination every five years what is the difference
between, can you define what a forensic examination
is say compared to a standard audit?
MAYOR HENDRICK: Well and that is the question I
have with this legislation is when you’re talking
about an audit are we talking about an audit of
practices or are we talking about an audit of
financial records. The reason we have, the reason
my understanding is the reason the forensic
examination was used, that term is instead of a
forensic audit was because there was no definition
of a forensic audit. And goin back to this there
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were and CMEEC can talk to this when they come up
here but there were RFPs that were put out to try to
find somebody to do that forensic examination and no
body wanted to bid on it because one auditor doesn’t
want to rat out another auditor and our one
financial person, they all work together, different
projects doesn’t want to say you didn’t do financing
auditing right. And so that’s why they originally
started and we’re gonna go down the path of here’s
the only auditor we have which happens to be the
auditor we have. And then the problem with that
obviously is how do you audit yourself. How do you
do a forensic audit of an audit that you’ve already
conducted? Bill Kowalski did bring that up, it was
resolved, Cohn Resnick did the audit, correction,
did the forensic examination. They identified some
things. The MECCA Bill Kowalski has asked for
additional information on that, CMEEC is gonna
provide that additional information and that came
us. Now the other part of this is the audit, is
that an audit of business practices and I’m not sure
that’s where I get confused with the legislation is
what are we trying to look at? Are we trying to
audit the businesses practices of CMEEC and of the
Board or are we trying to do financials or are we
trying to do both and I’m not sure of the added
benefit? I will tell you we have a young board and
as a young board we are learning, we are growing, we
are getting smarter and more knowledgeable in the
requirements so that we can be a stronger force so
that we can be the oversight that is needed for
CMEEC cause the question gets asked sometimes who
works for who? Does CMEEC work for the Board or
does the Board work for CMEEC? CMEEC should work
for the Board and the Board as we get stronger will
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be able to evaluate and look at and ask the hard
questions to make sure we’re not gonna get into this
situation again.
REP. LANOUE (45TH): So currently the five year
forensic examination who or what entity will conduct
the examination?
MAYOR HENDRICK: Well I guess we will have to go out
for bid again. Cohn Resnick is the group that just
conducted the forensic examination that was
completed in December. So it was completed in
December, was made public at the end of December and
then, since then here we are in March now but CMEEC
and the Board are lookin at this. The Board has
only met, I think officially twice sine the results
of the examination came out.
REP. LANOUE (45TH): So there any those five years
of forensic examination is there some type of audit
that will be conducted internally to make sure two
plus two adds up to four, the money checks out, the
things that.
MAYOR HENDRICK: Yes, sir. There is by normal
business practice and I think also required by law
CMEEC has an annual audit of their records. I mean
they have their own records that they keep and they
are audited annually. I know for example the
municipality we have our CAFR Consolidated Annual
Financial Report and that is done by an outside
agency to look to see if we are following practices
and look to see if there is any glaring oversight.
REP. LANOUE (45TH): Thank you, Mr. Mayor. I’ll
just close by saying, you know, what happened was
aggreges. We agree on that. What I need as a
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legislator, as somebody that one of the public
utilities in my district I need to ensure that this
doesn’t happen again and we put stopgap measures in
that this don’t happen again, again at the same time
protect the ratepayer from this and make sure that
what we put in fair to the ratepayer, essentially
the taxpayer and the citizens, not only of Jewitt
City buy all the ratepayers that fit within CMEEC.
Thank you for your answers and Thank you, Mr.
Chairman.
MAYOR HENDRICK: And going back to this, your Jewitt
City would be one, because it is a small MEU, Jewitt
City is potentially one of the MEUs that could be
negatively impacted if this legislation, if this
Bill is implemented in it’s entirety. That is a
concern that I have.
REP. LANOUE (45TH): I look forward to all of us
workin together to make sure that it doesn’t
negatively impact the ratepayer but at the same time
make sure this don’t happen again. I applaud
Senator Somers and some others that are taking this
initiative. We want to make sure this does not
happen again and make sure there is accountability.
Accountability is important and we need checks and
balances.
MAYOR HENDRICK: I agree with you. It’s a delicate
balance between how do you have the accountability
and not squash somebody and still have the ability
to run a business to make money so MEUs can use that
and to have low rates for the ratepayers. There
needs ultimately to be about the ratepayers.
REP. LANOUE (45TH): Thank you, Mr. Mayor.
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SENATOR NEEDLEMAN (33RD): Anybody else? I just
would like say for a minute that I’ve been involved
in one other quasi-public agency, Essex was the host
town, I’m First Selectman there of one of the old
CRA facilities and these quasi-public agencies in
general you’re either in or out. You’re either
public or you’re private and I think that, I’m not
sure how much intervention the State should do but I
think that it is, there is no question about the
fact that the organization reports to your board.
You have a fiduciary and legal obligation to make
that happen but the psychology of running a private
entrepreneurial kind of business with all of it’s
incumbent good, bad and ugly can lead to the kind of
abuse that you saw there. That you are either a
private agency or you’re out there for the public
good and so I think that you guys really need to
figure out what’s appropriate. I think the pendulum
may swing, you know, to the point were you won’t let
anybody leave the state on the agency’s dime and
that may not be the smartest decision either. You
want to be creative and innovative but you are
talking about ratepayer money, you know, you’re
statutorily empowered so that can lead people to
feel that they have protections that they can abuse.
So the Board really needs to have a solid hand on
the organization and make sure that management is
totally accountable to the Board because ultimately
the Board is on the hook and you guys are the
responsible parties. So with that I want to say
thank you for coming. Appreciate your willingness
to testify today.
MAYOR HENDICK: Thank you, sir and thank you to the
Committee.
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SENATOR NEEDLEMAN (33RD): Next up is Commissioner
Dykes from DEEP. Good morning -- afternoon.
CMSR. DYKES: Good afternoon. So pleased to be here
and to be joined by our Deputy Commissioner for
Energy Mary Sotos. I know you have a big docket in
front of you for today’s hearing so I’m just going
to offer oral testimony on two Bills although we
have submitted written testimony on a number of them
and would be happy to take questions.
The first Bill that I would like to comment on is
the Governor’s Bill HB 7151 which is AN ACT
CONCERNING ENERGY EFFICIENCY STANDARDS. This is one
of those where unfortunately because of the failure
of leadership at the federal level in terms of
continuing with, you know, appliance standards which
has been embraced on a bipartisan standpoint by many
administrations in Washington, we see unfortunately
the U.S. Department of Energy backsliding on it’s
requirements to move ahead with efficiency standards
for a broad range of different products. So the
Bill here today reflects not just Connecticut but a
number of states in the North East who are
considering or committed to filing identical
standards to help fill the leadership gap at the
federal level to ensure that we can continue to make
progress in providing families and businesses in our
states with the energy and water saving appliances
taking advantage of cost-effective technology that
is out there to ensure that we can provide bill
savings to our customers. Specifically there is
lightbulb standard that the DOE has indicated in
February that they intend to rescind a prior
expansion of an eligible lightbulb that would be
subject to stricter efficiency standards that will
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come into effect in 2022. So this is just
backstopping that previously announced commitment
from the Department of Energy to ensure that this
rollback will not occur.
I should also say that these appliance standards
that are done at the federal level will typically,
are really the foundation, the bedrock for cost
effective efficiency savings because they ensure the
products in the marketplace are already at an
appropriate level of efficiency and that saves the
states from having to through our Utility
Administrator Efficiency Programs for example to,
you know, invest in marketing dollars or other sort
of rebates and buydowns on the price of more
efficient products that become necessary to steer
customers to those that are most cost effective in
the marketplace. So we are achieving very
significant saving on our energy bills everyday
because of this appliance standards the Federal
Government is putting into place and so it is really
important that these can continue. Then of course
the fact that we are not just doing this alone but
recognizing that we want to make sure that
manufacturers are intended to bring forward these
products, it’s key that we are doing this with a
group of states that we are providing identical
standards across the different states that are
participating to help make it easy for those
companies to comply and do the right thing here. So
we are excited to see this Bill raised for
discussion and happy to take any questions on the
appliance standards.
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And then also I can take questions there or move to
the other I was going to talk about which was 7251
but at your pleasure.
Okay, so House Bill 7251 this is AN ACT CONCERNING
LONG-TERM CONTRACTS FOR CERTAIN CLASS I GENERATION
PROJECTS AND THE RESIDENTIAL SOLAR INVESTMENT
(RSIP)PROGRAM AND REQUIRING A STUDY OF THE VALUE OF
SOLAR.
So we are supportive of the intent of this
legislation which would provide more time for the
process that is already underway with respect to a
transition to a new framework for compensating
behind the need for renewable resources. It is no
secret this has been a very controversial issue and
there has been a lot of work underway at the Public
Utilities Regulatory Authority implementing Public
Act 18-50 from last year or Senate Bill 9 which
began this transition to two new types of tariffs
for both commercial industrial and also residential
facilities. You know the administration is really
committed to ensuring that we have a sustainable
pathway for behind the meter facilities for
customers to be able to adopt these. We know there
has been a, you know, this is one of the sort of
shining examples of a transition to a clean energy
economy that we see customers not only being able to
participate in lowering their bills through
installing behind the meter renewable facilities but
also that we’ve seen companies develop and invest in
Connecticut in the jobs that are providing the, you
know, helping to get these facilities installed and
that has been a great success story for the State.
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We also in the comprehensive energy strategies at
DEEP issued now over a year ago recognizing the
importance of having a portfolio of different types
of resources that will help renewable resources that
can enable the State to make its transition to our
ambitious and urgent requirements to reduce our
carbon emissions from the power sector. So we
believe in that portfolio approach. We have a
balance of grid scale procurements for example that
are bringing forward very cost effective renewable
facilities on a larger scale as well as the
framework of Public Act 18-50 which is enabling a
transition to a new compensation scheme to ensure
that, for a portion of that portfolio of meeting our
climate goals that are behind the meter resources
continue to have a sustained pathway for growth.
And we know that there are a lot of benefits that
behind the meter facilities provide that for example
grid scale renewables can’t. For example in helping
to optimize for the efficiency you don’t have the
same types of line losses, of delivering the
electricity from a grid scale project to a customer
when it solar on a customer’s roof for example.
There may be opportunities to help with avoiding
some of the costs or investments the utilities may
need to make on their distribution system by
collocating distributed generation with, paired with
electric vehicle charging for example or in an area
where you might have increased demand distributed
generation can help to address those issues and help
to avoid utility costs.
This as well, you know, we struggle with sightings
in our state. We are a very dense state and we have
a lot of focus on maintaining our core forests,
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maintaining prime agricultural land and behind the
meter resources where they can be sighted on a
customer presence is obviously help to optimize for
those sighting issues. So these are just a few of
the examples of benefits Behind the Meter Resource
provide that we know there is also a lot of changes,
positive changes in terms of the install costs, the
technology costs coming down for solar panels for
example and we’ve had a history if our State of
using things like competition, more transparent
pricing mechanisms as we see with LREC/ZREC Program
that has been very successful over the last couple
of years to ensure that we can continue to make this
a market opportunity for distributed generation
possible but at the same time maximizing for
ratepayers to benefit helping to, you know right
size the amount of incentive that is necessary for
developers to move these projects forward.
So there’s a lot of work ongoing and there is a lot
of work yet do to in the implementation of 18-50.
We have been pleased to have to start to have some
discussions cause I know many of the stakeholders
involved in that process and who I know are very
eager to testify and be involved in the discussion
with the Committee about what the future of Public
Act 18-50 Program will be so we’re happy to engage
in those discussion with the Committee. We’re open
to, you know, the ideas people are brining forward
but we think that it is really important that, you
know there is allowance of some additional time so
that we can address some of the technical challenges
and clarifications that may be necessary in Public
Act 18-50 that is something we could be supportive
of. We believe that it would be important to specify
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though perhaps a date certain for the transition to
the new program for the residential programs as
opposed to tying that extension to an extension of
the Residential Solar Investment Program. I’d be
happy to talk more that. We included that in our
written testimony.
And then finally with respect to the Bill’s
direction around the Value of Solar Study we are
simply recommending, we see the important benefit of
undertaking that type of investigation. We think
that DEEP and also PURA have some important
expertise in this area, PURA with respect to its
modernization docket which will help to provide more
input and around the potential opportunities to
avoid distribution costs behind the meter resources
and then DEEP of course has the integrated resource
plan underway that will help to clarify and project
forward what the value of avoided generation
capacity cost will be. So we think that this is,
you know, the type of study that will be
informative. We are open to doing it and we think
it may be helpful to authorize give DEEP and PURA
the discretion to conduct such as study jointly
given the relevance to our various proceedings. So
what that, happy to take any questions.
SENATOR NEEDLEMAN (33RD): Thank you, Commissioner.
Anybody have any questions?
REP. PERONE (137TH): Thank you, Mr. Chairman.
Thank you, Commissioner for your testimony, I
appreciate it. On 7151 it is my understanding we
have adopted the California standards as far as the
appliances.
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CMSR. DYKES: We have in some cases adopted those
4Ds though we believe that this additional statutory
language is necessary to authorize us to move
forward with these particular class of appliances
and Mary feel free to jump in if there is anything
to add there.
REP. PERONE (137TH): And did you want to say
something, Mary?
MARY SOTOS: Just to note that, you know, there are
a variety of products listed, I think at least 18
different products and I was going to say think
about the lighting products as sort of a separate
category so of those 17 product categories in terms
of why they were chosen and sort of what is their
other relative benchmark, so these are all product
categories that at the federal level did not have
standards in place previously. But there are
relevant certifications from California or you know,
you may be familiar with an EPA EnergyStar or Water
Sense Certification so in all these cases there are
already an existing certification, it is not the
State coming up with what the standard should be and
again as the Commissioner pointed out these are the
same categories and the same specific standards or
certifications referenced that our being embraced by
other states using this model Bill.
REP. PERONE (137TH): Thank you, Mary and so we are
going to setup our own standards for these newly
added above and beyond EnergyStar, we’re gonna setup
our own standards with this regional?
MARY SOTOS: So this, the language here would be
referencing some of those existing certifications,
so it wouldn’t be us determining what the right
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level of efficiency it would be, it would be relying
on either existing certifications or you mentioned
California. California has often the leadership role
here in doing that additional testing and
determination of what the standards should be so
when some of the product cases you reference there
is a reference to an established California
standard.
REP. PERONE (137TH): Thank you. Thank you, Mr.
Chair.
SENATOR NEEDLEMAN (33RD): Senator Petit.
REP. PETIT (22ND): Demoted again. [Laughter] Thank
you, Senator.
SENATOR NEEDLEMAN (33RD): Sorry about that. You’ve
been promoted or demoted.
REP. PETIT (22ND): Maybe everybody that knows the
answers to this so, excuse my naivety. So the
manufactures do in general do they manufacture to
the most rigid standard and use it as marketing tool
or do they divide up their manufacturing and
manufacture some products that are more energy
efficient and perhaps, I don’t know if it costs them
less to have some products that are less energy
efficient do they do a bifurcated or trifurcated
kind of marketing scheme across the nation or they
all manufacture to the lowest standard?
CMSR. DYKES: So where there is the federal standard
in place obviously they’re complying with that
across the country. The challenge here is that we
see the Federal Government not taking this role so,
you know, different manufactures may have different
strategies reflecting, you know, and for different
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products, the goal for states taking action here and
this is certainly why California has been able to be
a leader is where we can establish standards that
are uniform across a broad segment of the market
then obviously that creates the incentive for
manufacturers to comply with the standards to, you
know, they may consider making, focusing on product
lines that are conforming with those standards and
perhaps making that available even in states where,
you know, the standards aren’t in play.
REP. PETIT (22ND): So do you have any feedback. You
say other states have done this so have you had
feedback from any manufacturers where they are
already do this but won’t be an issue or will it
create costs for them to make some of these changes
or again will they use it as a marketing too saying,
hey we are more energy efficient now and we’ll save
you money as a marketing tool in a positive sense?
MARY SOTOS: Sure, um I would point to what the
Commissioner said other states have already had
begun this process so this model Bill was passed in
Vermont so that is the sort of one example that we
can see of this full suite of products but both in
Vermont and Massachusetts where this is being
discussed there has been feedback on specific
product categories where, you know the industry has
said we’re not quite ready to be able to produce
products at that level so I think we can have, you
know, a dialogue with the Committee and manufactures
here to see if there is that level of specific
feedback. But again that is one product out of the
list, you know, of 17 that we’ve seen that has
gotten that feedback.
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And then on the lighting side, California was
actually sort of early in putting into place at the
state level those same sort of federal standards.
So on the lighting side that has been going very
well in California.
REP. PETIT (22ND): Are any or many of these
manufacturers in Connecticut or New England and how
does it impact international manufacturers?
CMSR. DYKES: It’s a great question with respect the
international. I know that this is an area where we
relied and speaking to my past experience I’ve
worked in the Department of Energy in the Counsel’s
Office there we were very focused on ensuring there
is a level playing field for American and foreign
manufacturers which relied on coordination with
Customs and ensuring that there is proper
enforcement against those international companies
who are selling into the U.S. market subject to
these regulations when they enter the stream of
commerce in the United States. So with respect to
manufacturing we could certainly get back to the
Committee unless Mary you have specifics in terms of
the manufactures that maybe headquartered here or
have operations here for some of these different
appliances.
MARY SOTOS: Yeah, so I think we will likely hear
from associations of different product manufacturers
so you know, on the lighting side at this point in
the global market there is very little lighting or
light bulbs that are manufactured here in the U.S.
but the other product categories you know I thing
there’s, you’re gonna hear from a few that may have
a presence in Connecticut but this Bill also, I
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should just clarify, you know, is a requirement at
the point of sale. So it’s not a requirement for any
business or household to you know, change out what
they currently have, it is about what is going to be
actually available sort of at your Home Depot or
other places again starting in a phased approach so
that the less efficient products, you know, vendors
would have an opportunity to deplete their inventory
but then only be required to source these higher
efficiency products for sale going forward.
REP. PETIT (22ND): I realize it could be a long
answer but the shortest answer is good, in a global
economy will these standards be better than most of
European or Asian standards or do we lag behind
other industrialized areas of the world in terms of
these guidelines?
MARY SOTOS: I would say generally speaking, we’ve
seen examples in Europe being at the forefront of
many of these product specifications. But again
thinking about the standards being set here would be
setting a floor also know that here is voluntary
certifications that are sort of trying to take us
into more of that leadership role that would get us
closer to, you know, to where we see sort of the
leading edge of some of that, but I think we would
be confident that this suite of standards actually
represents high efficiency, you know, sense of
progress for Connecticut.
REP. PETIT (22ND): Thank you. Thank you, Mr.
Chair.
REP. ARCONTI (109TH): Representative Ackert.
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REP. ACKERT (8TH): Thank you, Mr. Chairman. Just a
follow up, so do we know, back on the same
legislation, the same Bill, and I see that we like
another 50 items approximately that are in the list
now that I’m seeing, is that about right? Oh no,
maybe not. Air compressor on it looks like new, so
are these now being sold that you know of that are
being promoted and sold at this time in Connecticut.
I think most times I see something that does already
say, you know, energy rating out there now and it’s
not a mandate, it seems to be, you know, a choice.
Is that?
MARY SOTOS: So all of the products that are in this
list are already available, are meeting the standard
and available from multiple manufacturers. So yes,
this is not trying to set some new product that
hasn’t even been created yet. These are all
products that there is a version from multiple
manufacturers that meets the specifications.
REP. ACKERT (8TH): Okay and do we know and I’m
just, you know, thinking about price costs, you know
of a product. I imagine as the more they’re being
sold sometimes I think when there is a mandate that
maybe here is a percentage being added on so you can
sell now something, thinking about the family, you
know, that they just lost their refrigerator,
probably their paycheck and they’re going in and
trying to find a refrigerator to replace that. So
I’m just thinking have we noticed any price bump in
the market because of that, it’s just a question I’m
thinking of in terms of some of items here are kind
of high cost items. That’s all I was thinking of.
Do we know?
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CMSR. DYKES: I mean our focus with these policies of
course is often times consumers maybe looking at the
cost of the appliance but not factoring in what the
operating costs are going to be so the whole key of
this is that, you know, LEDs are a great example of
that. That you know, an incandescent bulb is going
to be cheaper on the shelf but when you factor in
the savings on your electricity bill from operating
with, you know, and LED as opposed to incandescents
are like little heaters frankly that these appliance
standards help to make those savings more
transparent and more reflected in the customer
choice of front.
REP. ACKERT (8TH): Actually in Connecticut I think
we’ve done a great job is subsidizing LEDs they’re
cheaper than incandescent now if you go to the
store, I buy a whole lot of lightbulbs.
CMSR. DYKES: And part of that is because the
conservation movement matching program where we are
helping to make the cost lower at the point of sale
but to the extent that we have, you know, progress
with these federal standards to basically make that
what is available as the baseline on the shelves
that become less necessary for us to then place
additional incentives at the point of sale to
encourage people to make that more efficient choice.
So that’s why these are highly, highly cost
effective sort of framework for our efficiency
programs and help us repurpose those end dollars to
other types of savings.
MARY SOTOS: And I might just add the analysis that
has been done and not by Connecticut this is by,
again industry associations that are forwarding,
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they are doing research in this area as well as
again examples from other states, that the payback
from the customer perspective for these different
products, these higher efficiency products would
range from zero to three years so again paybacks
thinking in terms of you may pay a little bit more
up front but you’re recouping that in this case,
very quickly through savings on your energy bill.
REP. ACKERT (8TH): Thank you and I appreciate that
just making sure that the folks that need to buy
that day, you know, an item that they have to have,
that is affordable granted we would know well but it
will pay off but right now this is how much I have
in my checkbook so that’s what I want to keep in
mind on that. Thank you, appreciate the answers and
thank you, Mr. Chairman.
REP. ARCONTI (109TH): Thank you, Representative.
Representative Steinberg.
REP. STEINBERG (136TH): Thank you, Mr. Chair and
thank you Commissioner for bring forward this Bill
today. It seems high time that we consider energy
efficiency standards. But I was wondering if you
had seen the testimony presented by the Association
of Home Appliance Manufacturers that call out at
least one section of the appliances that could be
problematic, putting on my Chair of Public Health
hat, there is the conversation about air purifiers
and striking the appropriate balance between
reducing energy use and optimizing the performance
of a lot of those products to make sure that they
really serve the function, the important health
function to which they are intended. Have you
thought at all about maybe needing to moderate the
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EnergyStar minimum standard in that specific context
or is that just, you know, one association not
wanting to be singled out?
CMSR. DYKES: I think that, I think as we indicated,
you know, looking forward to and would welcome the
opportunity to have the discussion with the
Committee as you consider all the feedback that you
are receiving from manufacturers and others in terms
of these impacts but I don’t know with respect, we
would be happy to have that discussion.
MARY SOTOS: And I think as I was alluding to before
that in other states there have been at least one
product that I’ve said has gotten feedback or sort
of push backed in the industry so air purifiers is
one of those products and so I think taking into
account the high asthma rates we have in Connecticut
and the importance of air quality I think we would
want to look thoroughly, you know, if there were
going to be changes or trade off there because I can
agree with your goal here, you’re Public Health and
I’m sure that not only we have high efficiency
purifiers but purifiers that are actually working to
improve the health and indoor air quality.
REP. STEINBERG (136TH): Well thank you for your
consideration and potential flexibility. Thank you,
Mr. Chair.
REP. ARCONTI (109TH): Any other questions?
Representative Gresko.
REP. GRESKO (121ST): Thank you, Mr. Chair. Thank
you for your testimony. Obviously you’ve heard the
outcry from the solar industry concerning the
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successor tips and I’m wondering do you feel that it
is justified?
CMSR. DYKES: Well you know I think that there are
technical issues particularly with respect to the
implementation for the netting tariff that was
included in Section 7 of Senate Bill 9. I think
there is things that could benefit from better
clarification there addressing the timeframe for the
installation of metering infrastructure for example,
for the utilities to be able to implement whatever
netting period PURA ultimately choses I think is
something that again will benefit from more time to
address. I think that we are, you know, within this
goal we recognize and we hear from folks saying, you
know, there are challenges with metering. You see
jurisdictions across the country looking at how to
you transition to something to what is the next
more, the next 2.0 sort of approach to compensating
this __22242___ generation. We are, you know,
looking at other jurisdictions. We’re listening to,
you know, folks that are suggesting that, you know,
some of the challenges with this particular
approach. But we think that, you know, there’s a
lot of work that’s already underway at PURA and
understanding and addressing some of these issues.
We think that with additional time it is, you know,
we can also work with the Committee to ensure that
there may be clarifications around particularly
there technical issues that may challenge the
implementation. There is a lot of work, you know,
yet to be done but with think the core of what’ in
Public Act 18-50 is what we should be working from.
We think there is a lot of flexibility that is
provided in that Statute for PURA to consider things
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like, you know, electric system benefits, time
abuse, how to address, you know, storage some of
these other elements that are going to be critical
and hopefully informed by the grid modernization
work that PURA has underway. So I think that is
where I’ll end my comment there but we’re listening,
and we’re geared to be a productive part of, you
know, participant in this discussion.
REP. GRESKO (121ST): Thank you, Mr. Chair.
REP. ARCONTI (109TH): Any other questions? I have
a quick question. Representative Demicco?
REP. DEMICCO (21ST): Thank you, Mr. Chair. Thank
you for coming to testify, both of you. I am going
to ask a question or two about 7251 specifically
about the current net metering program. It was
suggested to me by several groups who are concerned
about last year’s SB 9 and Section 7 in particular
that we should hit the pause button and maintain the
current net metering system, net metering program
while we’re doing this study of the value of solar.
Is there a reason why that is not being
contemplated?
CMSR. DYKES: I think and I apologize if I misread
the Bill but, Representative I believe that’s what
this Bill does. It extends the timeframe for when
that metering would sunset which would enable, you
know, a valued source study to be conducted, it
would also enable, you know, the possibility to
address some of those technical implementation
examples that I cited. So we think that is what the
Bill does and not, you know, we understand
additional time may be needed in order to ensure a
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sustainable predictable transition to a new
framework.
REP. DEMICCO (21ST): Well then I apologize, maybe I
misread the Bill in that case but in any event, the,
you know, this whole I guess we’ll have to wait and
see what the value, you know, the study comes up
with. But is has been suggested to me that
considering the small amount of solar that is
actually present here in Connecticut that this cost
shift that seems to be a big concern is really
unfounded. That we have such a small penetration of
solar, roof top solar in Connecticut that there
really isn’t any significant cost shift and that
we’re kind of exaggerating things, the danger. You
care to comment on that?
CMSR. DYKES: Sure, I mean, well I think that it’s
not so much a question of a cost shift, I think the
question is, you know, we know that behind the meter
facilities tend to cost more to install than let’s
say a grid scale facility just given economies of
scale, the cost of interconnecting and so on and so
forth, right. So the question is kind of two-fold.
One is what are the benefits, are there additional
benefits or different types of benefits that the
state values that behind the meter resources can
provide that, you know, indicates to the state that
it’s important to continue to, you know, ensure that
distributed resources are a part of that portfolio
and how big of a part of our portfolio of resources
that are contributing to meeting our carbon goals,
right. And then at the same time I think there is a
separate question of how do you compensate those
behind the meter resources. Is the way that you’re
compensating them ensuring them you’re also, you
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know, providing incentive for facilities to be
installed in the way that maximizes those benefits.
For example focusing competition in your larger
commercial industrial projects on those facilities
that will be best served optimizing your siting
concerns or on directing, you know, in the
development of the tariffs forms behind the meter
residential facility, you know, incenting those
customers who install them to, you know, do you want
them to be trying to time their consumption right on
site to use the energy that they’re generating on
site or do you want them to be exporting it to the
grid, do you want to try to signal to developers
that they should be focusing on, you know, locations
where the utility may have a distribution system
cost to be avoided by focusing on more deployment of
meter resources. So there’s a lot of kinda planning
and policy that goes into the design of a good
tariff and some of these may be competing and it
also can get very confusing and if becomes really
unwieldy then, or we don’t have enough data provided
to developers to be able to help them find these
opportunities in terms of knowing what the customer
load profile is, where the utilities have
distribution systems, challenges that could be
avoided with distributed generation. Then that’s
part of being successful with this too. So I think,
I didn’t comment on this that one of things that
would be helpful is, you know, to the extend that
PURA is able to make continued progress in their
grid modernization docket while all this is pending
will help to unlock some of those opportunities.
But that is where the value of solar of the value of
distributed generation study can be helpful because
you’re looking at basically all of those different
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benefits right, that distributed resources can
provide and understanding what, just how sizable
those benefits are, design and I think the really
important question is how to design a tariff that is
not just, you know, where we can assume those
benefits will accrue but where you are providing the
right signal so that we can actually achieve some of
those benefits if you will. I guess it’s a more
complicated, you know, I think there is a lot of
discussion about a cost shift but I don’t think that
is sort of the primary driver of moving towards new
tariff designs. I don’t know if that’s helpful.
REP. DEMICCO (21ST): If I may, Mr. Chair. So I
appreciate your explanation. My concern is, and I
think the concern of a lot of people is that by
going down the road that we’re going down that
individual solar is being disincentivized and will
continue to be disincentivized to really to the
determent of everyone. And I haven’t heard an
explanation that counters that. I don’t know,
that’s not really a question but that’s my question.
Could you assure me that this incentive is going to
somehow be changed?
CMSR. DYKES: I think that there, this is why we’re
supporting having more time in the process but we
don’t want to end the process entirely because there
has been, you know, discussion going on a record
that is being built so, you know, issues are getting
flushed out and so we think this bill pushes out the
timeframe for that transition and that’s important
because as you’re hearing, right, there is a lot
involved and it is impacting businesses in our State
that we support from the standpoint of a cleaner
energy economy so we don’t want to do something that
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is abrupt, that is going to have unintended
consequences that businesses aren’t going to be able
to plan for these are not regulated utilities.
They’re maintaining, you know, a payroll taking on
that risk themselves so we are very clear eyed
about, you know, ensuring that whatever, however
this transition occurs that is done in a way that
gives enough that has a lot of stakeholder
involvement or we can hear about all the impacts and
make sure that the point of time when the new
tariffs come into place is far enough out people
understand what it is, it is properly informed and
they have time to plan. What the challenge is right
now is that we haven’t nailed down what we are
transitioning to. So I think we know what we’re
moving away from and I think there is that
uncertainty which is concerning to many because we
haven’t allowed what we’re transitioning to. We
have a framework in 18-50 that lays out for the
structure of the tariff but what is open ended and
hasn’t been addressed yet what the price is that you
are paying for example through that structure.
That’s a really, really important part of
understanding the economics of how, you know,
marketable this will be for solar businesses in the
State that needs to be filled in, in addition to
sort of addressing some of the technical issues with
the framework itself. I think the value of solar,
you know, type effort will inform both of those
things to understand. The structure of the tariff
is, you know, critical for how you incent the use,
deployment and operation of these facilities to
maximize some of the benefits that we’re trying to
obtain, right. It also can inform as well as other
kinds of data points how much you pay for the output
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too. We don’t disagree that it is important to do
the evaluation and I understand why there is concern
because there is a lot of these pieces that haven’t
been filled and yet and we think it’s important that
the process can continue and build but we recognize
that it could benefit from more time.
REP. DEMICCO (21ST): Thank you. Thank you, Mr.
Chair.
REP. ARCONTI (109TH): Representative Steinberg.
REP. STEINBERG (136TH): Thank you. I wasn’t planning
to weigh in on this but I do want to comment on a
couple of things that Representative Demicco said.
First of all, as you know, I’ve been lobbying for a
study on the value of solar for a longtime and I am
a little bit less sanguine as perhaps you are that
that’s gonna happen on a timely nature and that
we’ve sought it with PURA why should I believe that
it’s gonna happen now and certainly on the timetable
that has been offered as part of a delay in
implementation of the metering and tariff portion.
So that is my first concern. My second concern is
that while, I think to your point, the causative
argument has not been the only argument used to
justify this shift to this new 2.0 paradox, it is
used by many as a significant justification so my
question is if this is what people are really
concerned about it has been the basis for a lot of,
I would argue, a lot of bad decisions by other
states attempting to address the causative argument
why is it we’re not looking at a new electric bill
transparency whereby we separate it out those things
which are in theory fixed costs that are caught up
in volume metric rather than assume we know what
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that cost shift delta really is. We are taking it
at the word of the utilities that it exists, it’s a
problem and yet we do not know factually to what
degree the fixed costs are not being adequately
captured and being burdened by those who don’t have
solar on their own. I had a Bill in to see if we
could an electric Bill 2.0 that would separate out
for the benefit of consumers exactly what those
fixed costs are to reform our systems so that the
theory of cost shift could be verified by a Bill
that was fully transparent and both costs and
benefits that could be clearly explicated on the
Bill for benefit of all consumers generally it would
be very valuable going forward when we get to grid
modernization and there may be costs that we are
going to ask rate payers to pick up. But going back
to you, I guess a measure of skepticism about
whether we are following the right reasoning to take
us down the path of tariffs at this point in the
game and shouldn’t we have an indefinite pause until
such time as these broader issues are resolved and
not count on the expectation that we can get this
done in the next two years.
CMSR. DYKES: Well, I you know, [clapping}
Representative I think that.
REP. ARCONTI (109TH): Please, please hold, hold on
that please.
CMSR. DYKES: I know that this issue has been
brought up many times in terms of doing value source
study or we would say value distributed generation
study, you know, I think that we recognize and with
the progress on the grid monitorization docket at
PURA I think it poises us to, that this is a very
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productive time for DEEP and potentially working
jointly with PURA as we recommend to be able to
address and start to quantify what these benefits
look like, what these costs look like. I think
that, you know, I have again the focus this year is
on, you know, we’ve seen those studies undertaken.
We have to understand both what the cost is and the
benefits are of the distributed generation itself as
well as the cost and benefits are of what the
utility may need to install on the distribution side
in order to help us maximize right and actually
obtain the benefits. That is part of why the grid
modernization piece has to be involved in this. The
utilities need to have for example that our
visibility on their side of the systems we know that
CL&P for example should be on the cusp of, you know,
adopting more advance meter infrastructure, that’s
been an issue with the implementation of Public Act
18-50 for example kind of shining a spotlight on the
limitations of the metering infrastructure of the
DLNT currently has so these are sort of all
interrelated if you will and I think this is again
very timely now to have a solar value of
distributive generation study undertaken to be able
to inform how these tariffs can be designed to
maximize the benefits that all ratepayers receive
from these facilities at the same time we can
minimize the cost of, you know, that ratepayers are
paying through the tariffs to get these facilities
deployed in a continued sustained manner. I am not,
I’m just going to very clear, you know to the extent
that you reference the utilities representations
with respect to cost shift. That would be a
question for the utilities. We are not testifying
on their behalf or adopting their testimony.
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REP. STEINBERG (136TH): I take your point and I was
trying to sort of capsulate the entire history we’ve
had here over a number of years but do you choose to
comment or not about the prospect of using the
electric bill to more transparently explicate what
really are fixed costs so that every ratepayer knows
exactly what they are paying for a lot of these
infrastructure things and we could really see for
ourselves to what degree the cost shift is taking
place?
CMSR. DYKES: I think I just entertain the premise on
the cost shift. I mean I think that, you know, I
mean does the legislature for example has put
forward in 2014, you know, directives around the
fixed customer charge for example residential
customers which PURA implemented, you know. Some of
these, there is a lot that goes into rate design and
I don’t want to take up all the time today but I
would be happy to follow. I think this is a real
benefit as we always have from a good conversation
and understanding, more specifically the concerns
and where those opportunities might be to make the
value that customers are getting from, you know,
what they are paying and how they are paying on the
bills more transparent and I would be happy to have
that conversation with you.
REP. STEINBERG (136TH): Thank you, Commissioner.
Thank you, Mr. Chair.
SENATOR NEEDLEMAN (33RD): Thank you.
Representative Meskers, I’m not going to call you
Senator.
REP. MESKERS (150TH): No, I don’t get the promotion,
thank you. So I guess the question I have is
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concretely and less eloquently than Representative
Steinberg on solar. So the questions arise around
the retail level of solar for the individual use,
the more industrial solar looking at development and
then assigning a weight to battery backup storage
and then trying to figure out the pricing for both
retail and institutional development of solar.
Because the conversation is a lot more complicated
than that [Laughter] and is that where we are in
trying to figure out how we price the solar and the
benefit of solar?
CMSR. DYKES: That’s correct.
REP. MESKERS (150TH): Well that makes it a lot
easier for me. Thank you.
SENATOR NEEDLEMAN (33RD): Thank you. Yes.
REP. WINKLER (56TH): If the infrastructure was
there to do instantaneous netting would you be
calling for any delay?
CMSR. DYKES: You know, we have. It’s a great
question. I think I’m in my head doing it because I
worked on this docket when I was the Chair of PURA
so I have not been involved in directing the work
that the department is doing in the PURA docket
myself, I recused myself from that for the matters
that I’ve worked on. So we have not had
conversations yet as a department on that specific
question since I moved to this Commissioner role. I
think that there are, you know, I will say the
general matter, you know, recognize that there are
challenges with respect to the implementation of
instantaneous netting that go beyond just the
availability of the metering infrastructure. The
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installers would have to have very concrete
information around the customer load profile to be
able to estimate what the savings would be for a
customer depending on when they are instantly
consuming right at, you know the contemporaneous
with their production so that from a consumer
protection standpoint we can be ensuring that they
are sizing their facility correctly to produce the
savings the customers would expect. So when I
mentioned the technical challenges with some of
these different designs, you know, that’s an example
of one. But I don’t know if that’s helpful.
REP. WINKLER (56TH): That’s enough. Thank you. In
another life I used to represent the professional
employees at your agency and they gave me the crash
course on what you do and what you do is the most
complex work done in state service and having
represented people all over this state I stand by
that. But for us then, most of us, your agency is
like a black box, input comes in, stuff comes out,
what happens in between we have no idea. But I do
have a small idea so my question is when you use
terms like “benefit” and “ratepayer value” let us
pretend that we think your agencies definition of
“benefit” and “ratepayer value” is too narrow. Let
us say that it doesn’t take into account things we
think are happening more globally that for instance
should push development of solar. How would anybody
change either the culture or the definition of terms
that your agency uses to make it more expansive?
CMSR. DYKES: Well I should say first,
Representative I appreciate your comment and I am
disappointed to hear, you know, of that perception.
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It’s certainly not been my experience in the years
that I worked at DEEP.
REP. WINKLER (56TH): Which perception are you
talking about, the black box?
CMSR. DYKES: The black box.
REP. WINKLER (56TH): Do you think most of us
understand what happens in rate setting?
CMSR. DYKES: Well DEEP does not set rates, we are
participants in the PURA proceedings. And I should
say that, you know, to the extent that we undertake
and we know this has been.
REP. WINKLER (56TH): I apologize for conflating the
two. Go ahead.
CMSR. DYKES: Okay we’ve reviewed the value of solar
studies for example that have been undertaken by
jurisdictions around the country. There is always,
you know, been a lot of debate around which types of
benefits should be considered and should be
materially considered in setting the level of
compensation for the facilities right, that are
associated and I think that, you know, Best Practice
for all jurisdictions that have undertaken this is
to engage in those studies with a robust public
process to hear from a broad range of stakeholders
about what type of benefits are cognizable. But
certainly within the construct Public Act 18-50 it
would be PURA’s discretion and PURA has the
jurisdiction to set the rates that facilities would
be compensated under that Public Act 18-50. And so,
you know, DEEP is a participant in that process. I
think that any development of a value of distributed
generation study, those insights would certainly be
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something that we would want to engage with
stakeholders on, that would certainly be my
preference as the Commissioner of DEEP currently.
But in any case I think to the extent that those
insights would be incorporated into tariff setting
that would also be part of a PURA process which I
believe is a contested case.
REP. WINKLER (56TH): Okay so in answer to my
question if we, after all of that, if PURA made a
decision or DEEP and people still disagreed with the
final outcome to expand the definition of benefit or
value we would have to change 18-50?
CMSR. DYKES: You would. I guess I would be
interested to hear more from the Committee about
what the interplay of the value of distributed
generation study or value solar study would be with
the tariff setting authority for PURA and not
circumstance.
REP. WINKLER (56TH): Thank you, Mr. Chairman.
SENATOR NEEDLEMAN (33RD): Thank you. My Co-Chair.
REP. ARCONTI (109TH): Thank you, Mr. Chair. In
your testimony you suggest that we tie the end of
the current net metering to a specific time and date
instead of the threshold we have in the Bill. Do
you envision that date being further out than
January 1, 2021, if so what I guess would you
recommend if you had one?
CMSR. DYKES: You know, I think we are not prepared
today to suggest a date but we would be happy to
talk with the Committee about it. I think there’s
just two reasons why we suggested picking an end
date and not tying it to RSIP. First off RSIP was
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scheduled to sunset to end, you know, at reaching
300 megawatts and I think that, you know, hearing
from, understanding in the context of RSIP itself
whether to continue the availability of an
additional incentive on top of the current net
metering is necessary to continue to sustain
activity that we are seeing in the solar market it
would be important to understand. And then beyond
that when, you know, I think we’ve seen some of the
uncertainty just in the PURA proceeding to date with
knowing when net metering would sunset where it is
tied to the, you know, subscription of the quantity
of megawatts that’s allowed under RSIP there is less
ability to predict when exactly when that expiration
would occur so we think again to the spirit of
ensuring, you know, predictability that people can
plan around with respect to a transition to a new
program that is why we would recommend that the
Committee adopt this specific calendar date. I would
also say if I may to, that we believe in the
commercial industrial programs however extension of
LREC/ZREC maybe necessary. That again is a long-
term contract for RECs that is available on top of
the current net metering framework and just our
cursory sort of look at, you know, the economics for
those projects that may be necessary to continue.
SENATOR NEEDLEMAN (33RD): I have just a couple of
quick questions. You have a great command of the
facts but I agree that to the layman rate setting is
sort of a black box, it’s not there’s formulas,
there is a lot of thought that goes into it but it
is difficult to comprehend which I guess would be
the black box nature of it. Do you think from a
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residential solar point of view that battery on-site
storage is a gamechanger?
CMSR. DYKES: I do, yes. That is one of the reasons
that, you know, having a new tariff design that
would go forward. I mean currently we don’t,
batteries are not free, right? Customers have to
undertake an additional cost to install a battery.
That ensures that they system, the battery paired
with the solar for example can provide new types of
benefits that solar by itself can’t because then you
can time the deliveries or the export of the
consumption of that power around demand and or
distribution system needs. So it’s like an
additional benefit and an additional cost. And so,
you know, I think that is one of the elements of 18-
50 that is important, that it enables some
consideration of those types of additional benefits
and costs so that you could design a tariff that
could better, you know, incent the deployment of
solar with, sorry, storage with solar.
I also want to say that, you know, to the point
about residential rate setting being a black box I
think it is just important to note that, you know,
where we have the current net metering structure, I
think that has been some of the frustration with the
current net metering that, that in a way is a black
box too because it is essentially tying the level of
compensation to whatever the, you know, the retail
rate is at present. And that is not, you know, the
retail rate reflects the cost of generation, the
cost of transmission, the cost of capacity but also
let’s say if you have, you know, storm, a major
storm or major storms like we saw in 2011 and 2012.
You know that is going to mean that the utilities
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are going to be incurring cost for restoration of
power that is going to be rolled in at the tune of
hundreds of millions of dollars potentially as we
saw from 2011 and 2012, you know into customer bills
which has an impact on distribution rates. So
current net metering has been really, really
successful at jumpstarting, you know, a resident
distributed generation industry. At getting
customers to put solar on the roof in a level that
was, you know, just hard to imagine several years
ago, right. But now we want to be able to
transition into a tariff design that is better
incent to be an inclusion of other types of
technologies like storage, actualizes other types of
benefits in terms of, you know, helping to focus the
deployment in those locations where the distribution
system could especially benefit from it. All of
these different types of things and as part of that
trying to move away from a compensation system that
is just tied to whatever the distribution rate, you
know, the retail rate might happen to be. It’s just
obviously one piece of the puzzle, it is not a
comment that like drives, you know, the whole sort
of policy posture for the Department. But there are
challenges with rate designs, you know, it’s
complicated and there are parts of it that are not
really in our current scheme that are not really
tied to the value that distributed generation can
provide. So I think it is a challenge with the
current construct as much as it is an aspiration
with a future construct to be able to better tie the
tariffs to the benefits that we as Connecticut
ratepayers want to achieve.
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SENATOR NEEDLEMAN (33RD): So I understand and we’ve
had other conversations. I think I have a sense of,
I’m new to this game, and understand where
residential solar and the amount that we are
requisitioning here is actually how it plays into
the overall grid taking a lot to sort of go to grid
level thinking on this. Yeah, it’s probably the
most emotionally charged issue because you see we
have a lot of people who are heavily committed to
ensuring reducing carbon at our personal level,
reducing their footprint however they can. So I ask
you, your explanation about the business case about
why we want to move away from subsidies here that
you have a deeper understanding of this market than
I do but it appears that the general consensus is
that maybe we’re looking to move away too quickly
from the subsidy base incentive that we had. The
basic research is no longer being funded by the
government which is the way basis research was
funded when I was younger. Now it is left to the
businesses and with all that is incumbent pluses and
minuses I’m not sure if the public will, you know,
be told here I think there is some incentive that we
might want to keep in place a little bit longer.
CMSR. DYKES: And, you know, I appreciate that,
Senator and that is why we are supportive of having
this additional time in the process. It is
important for us from the standpoint of working on
energy policy for the State trying to, you know, map
this pathway to achieve our carbon reduction goals
at the least cost and maximizing benefits to
ratepayers that we can make sure that the polices
that we’re advancing are informed as best as
possible buy the Best Practices around the country
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and by the, you know, the voices and insight of
those who are, who have helped make this industry,
you know, as successful as it is, today and that
includes not just the customers but the installers
themselves and I think that is where I welcome and
look forward to more conversations where we can
listen and also share our viewpoint to help to try
to achieve a productive sort of next framework here.
We don’t sell solar panels at the Department of
Energy and Environment Protection, you know, the
individuals that are sitting down in the conference
room or at the kitchen table and having the
conversation with the customer to explain, you know,
how they would achieve these savings and what, you
know, a lease looks like and this is a complicated
thing and it only, the success of a tariff is not
that we can adopt something new that is sustainable
from a cost perspective that it is helping to better
optimize for all those different benefits that we’ve
talked about here today but something that customers
can understand, right and so that they’re, you know,
and they’re willing to take action to invest in.
That is a really important criteria for success here
and I recognize without that, you know, this won’t
work so that’s why I’m particularly interested to
hear from those folks, to let this process continue
so that we can understand those insights there from
folks who wee on the ground having those
conversations to convince folks to take part in this
important part of our decarbonization.
SENATOR NEEDLEMAN (33RD): Thank you, last question.
More of a, yes it is a question. Do you think that
battery storage at this point, the cost of battery
storage on site requires the same subsidies that the
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solar panel industry required to get us to a point
where more people can store their power and not
worry about the value of it being bought back by the
utility?
CMSR. DYKES: I think we are seeing the cost of
battery storage particularly coming down
precipitously. It is really exciting not just from
the standpoint of the electric, you know, power
generation opportunities but also for electric
vehicles, it is going to be an important part of
making those vehicles more cost competitive with
internal combustion engines. So, you know, I think
we know that the focus has been, you know, the value
proposition for customers to install solar right now
may be more focused on commercial industrial
customers who want to optimize and want to better
manage their demand charges or provide more
resiliency at their site, same for residential
customers who want to ensure, you know, backup power
and these sorts of things. But overtime as these
costs come down and we design tariffs correctly we
can ensure that, you know, compensation is there to
the extent that the solar backup is helping to
provide greater benefit to leverage more benefit
from the onsite solar, that tariffs are adequately
compensating for that to incent folks to install
that, the storage as well.
SENATOR NEEDLEMAN (33RD): Well, I would think there
would be a relatively calculation for the solar
installers to make because the difference between
what people are gonna get for the electricity that
they sell back to the grid versus what they are
going to be paying for kilowatt hour is going to be
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quite substantial. Thank you for all the time
today, appreciate it.
CMSR. DYKES: Thank you very much for the
opportunity.
SENATOR NEEDLEMAN (33RD): I think we’re gonna start
alternating with public and I think our first member
of the public hasn’t been a member of the public
until recently that I would like to welcome back
Former Speaker Brendan Sharkey. Thank you.
BRENDAN SHARKEY: Thank you, Senator. Good to see
you, Representative Arconti and Members of the
Committee. My name is Brendan Sharkey. I am here
today representing SunPower Corporation.
SunPower is the largest solar panel manufacturer in
the country and they have 11 dealers in Connecticut
through which they distribute their products. You
have the testimony of my colleague from SunPower,
Robin Dutta in your package. But I would like to
just paraphrase his and my testimony within the
timeframe I have.
I think we need to address the elephant in the room
frankly, not to suggest that all the people in this
room are elephants but we have a room full of people
here today who are very concerned about what happens
with SB9 last year. What happened with SB9 is that
we set in motion a regulatory proceeding at PURA
that defines very, very narrowly what their scope is
in terms of implementing a new transition off of net
metering. It specifies that PURA can only evaluate
alternatives and new programs based on either daily
or instantaneous netting, in other words buy-all,
sell-all. That completely changes the financial
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dynamic of how solar installations are financed.
That is why you have everyone here today because
that abrupt transition into a completely different
type of pricing and the fact that this legislature
last year prescribed to PURA that they could only
look at daily or instantaneous netting as part of
the new transition away from net metering is what is
creating so much of the problem.
So it is for that reason, Mr. Chairman that SunPower
cannot support the Bill that this Committee has
produced in its current state. I am somewhat
disappointed by the testimony that we just heard
from DEEP and despite the fact that I have the
upmost respect from Commissioner Dykes and her
expertise in this area, the problem is that I don’t
think that Commissioner Dykes was reflecting the
reality of what I just expressed to you. I think
Commissioner Dykes and DEEP are suggesting that a
delay, pushout of a couple of years is sufficient
and maybe we can all agree that we can do a study
and evaluate but unless we change the fundamental
direction that we’ve already given to PURA to only
go do daily of instantaneous netting all of this is
completely worthless.
We have to actually have to change SB9. We have to
broaden the scope of that PURA can look at if we are
to move to the net metering 2.0 as it’s being
described. I don’t think after last year, after SB9
passed, I don’t want to ask for a show of hands, but
I think everyone in this building left session last
year knowing that there is something wrong about SB9
and that it was rushed through, it wasn’t maybe well
thought out and most folks may not fully understand
what it involves. I think there is a general
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reticent about what we did and why we did it. I
also know that the Governor and Lieutenant Governor
in their campaigns when they were still candidates
did not support SB9 in its current form. And in
fact if you look at specifically whatever SB9 has
and what it did, it is more analogous to Maine’s
system, right. A system that Governor LaPage
introduced and promoted with he was governor that
they are reversing. So it is more like Governor
LaPage and less like Governor Lamott and the way
that this is being presented. We have a real
problem because if, and I can get into specifics
about what is wrong, but fundamentally if we don’t
change this direction and direct PURA to have a
broader scope of what it is that their charge is in
terms of moving off of net metering we’re doomed.
We are going to be just like Maine and just like
Nevada who plowed the same path and saw their entire
solar industry completely disappear in a matter of
12 months because there was no work there.
You’ll hear from all these dealers here today and
installers who will tell you that they are already
downsizing their Connecticut workforce, in some
cases they are going to move out of Connecticut
completely and the 2,300 jobs that we’ve promoted
here in the state overtime will go away. Pushing
the date out and pushing out the implementation
another couple of years is just delaying the
inevitable. We have to fundamentally reevaluate
what it is we did last year, study the issue, look
at what other states have done, positively and
negatively and develop a more comprehensive plan
that really is going to protect the jobs that we all
agree we need to protect and put us on what I think
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the Commissioner and everyone agrees is a more
sustainable path for the solar industry. With that,
I will be happy to answer any questions.
SENATOR NEEDLEMAN (33RD): Thank you. Yep.
REP. ACKERT (8TH): Thank you Mr. Chairman and good
to see you Mr. Sharkey.
BRENDAN SHARKEY: Good seeing you.
REP. ACKERT (8TH): You know so how many states do
you operate in SunPower?
BRENDAN SHARKEY: SunPower, you know I don’t have the
exact number but most states in the country.
REP. ACKERT (8TH): So most states in the country?
BRENDAN SHARKEY: Yes.
REP. ACKERT (8TH): How many different types of
funding’s are there for residential solar? In other
words we’re doing an at metering, you brought up
Nevada, you brought up Maine, how many different
types of metering or metering options are there?
BRENDAN SHARKEY: There are many, I am not an expert
in how those are all, there are folks here today who
will testify later who do have more in-depth
knowledge how other states actually implement their
net metering policies. I raised the Maine and
Nevada example because they implemented a daily
instantons netting scheme and those two states saw
what is happening in Connecticut right now
disappear. Their solar industry has disappeared and
bot now have reversed their own decision, even
Governor LaPage in Maine has reversed his own
position on this recognizing that it was a drastic
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mistake. And instead of evaluating that and looking
at what other states are doing, we’re rushing ahead
and not really stopping for a moment and really
evaluating whether the policy that we set in motion
last year is really the best way to go.
REP. ACKERT (8TH): Thank you and I will address
last year for a moment while you’re here. We’ve had
conversations. We have very good dialogue on this
issue I believe and, you know, being on the Energy
and Technology Committee last year we had, there was
no future, there was our municipal portfolios
standard was going to checkout in 2020. We had a new
administration come in. We didn’t know what was
coming in whether he was going to embrace renewables
or not embrace renewables. That’s what we had and
so the Committee worked diligently as far as I’m
concerned in a short, which we shouldn’t have done
in a short, because that is the only option we had.
So we took that bold move on and brought something
out and I don’t want to downplay what we do here but
we put words in books, it called State Statutes and
guess what we can do with them every year, change
them, with your input, your positive input, but I
would love, I’ve asked this too many times as far as
I’m concerned give us some ideas. What is working
in other states? I’ve asked this from last year and
I’ve asked this the beginning of this year. Here I
hear your company works in let’s say 40 states,
right, and other companies work in another 40-50
states, right. Okay this didn’t not work, I could
not make, I could not employ people. We do have a
higher level of pay wage here than other states do,
we have a lot more regulations and licensing. I
know, I live in that world. So I get it we’re a
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little bit higher. So we may not be equal to solar
going in to Louisiana, I don’t know, just saying.
So I am going to ask again, cause I got three, two
other Committees I’ve to be at today, like a lot of
other legislators, so if you see us in and out folks
it’s not that we don’t want to hear about ya, I’ll
stay till midnight, I don’t think we’re staying till
midnight, but we may [Laughter] and I’ll be here.
But gosh sakes so this doesn’t work. That metering
tariff doesn’t work, right? Is it working anywhere?
Is there a tariff process that is working anywhere
or something similar to that? Maybe it is that our
metering, our metering doesn’t work period. Maybe a
metering discussion, Eversource don’t throw anything
at me, but maybe that’s the discussion. But if
we’re working so many states and we’re promoting it,
what is working. Now its just gotta be the old net
metering that ya got, that’s it. We want, and I
mentioned, I’ve met with you and others, I’m a
business owner right? There are other business
owners in here. You don’t want a six month lookout,
you’re not gonna bring your company here if it’s a
six month lookout. You’re probably not gonna bring
it here if there is a two year lookout with
something else that can improve funding. Show us
how we can make solar viable, workers getting paid
solid so that is really, if this is the only way, if
this is the only one way that works, okay then we’ll
have to make it, but give us some say, listen here
is the metrics that work in this state, and this
other and I think we would embrace that in this
Committee. I think we really would.
BRENDAN SHARKEY: Agreed. Representative, I
couldn’t agree with you more. I don’t think there
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is anyone in this room, I may be proven wrong but I
don’t think there is anybody in this room, in the
solar industry who believes maintain net metering
indefinitely is a solution. I think everyone in
this room understands that we do and should begin to
transition off of the pure net metering that we have
now because ultimately it won’t be sustainable in
the long haul. We do need to move some kind of
alternative to net metering as it stands today.
That is the whole reason why we feel so strongly
that that evaluation of what that successor program
should be needs to take a little bit more time and
be evaluated. If you’re looking for states as
examples, I think that most people would suggest
that what’s in Massachusetts is working very well.
What’s happening in New Jersey is working very well
and those are hybrid programs that have adopted and
they obtained certain portions of net metering but
also have instituted other type of tariff issues as
well. Whatever works for Connecticut is as the
Commissioner said is a very complicated subject it
is not the kind of thing that we can evaluate in six
months as we did last year. We need time to really,
fully reevaluate what is the best alternative that
we can transition to and then develop the plan for
how to actually implement that. But the problem is,
I’ll get back to the fundamental point, what was set
in motion last year is a specific direction at PURA
that does not have any alternative. We have to stop
that. We have to change what we told PURA to do so
that we can have this time to really evaluate along
all the lines you are suggesting.
REP. ACKERT (8TH): Thank you and I think that is
the key. I think what we want to do, maybe that
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component say, okay we’re gonna check, we’re gonna
pause for a timeframe, right, you know, but we need
to redirect what we’ve charged them with last year
to be more broader involved in that component so
that you go, okay cause whatever you’re gonna make
with that tariff ain’t gonna work. I kinda got the
gest of what Commissioner Dykes was going on though
so but truly appreciate that. I think that, you
know, we want this business to grow, I mean we don’t
want to be the handcuffs of the business so, you
know, we’ve set some renewable portfolio standard I
think is huge. It kinda sets the mark though. We
gotta do something.
BRENDAN SHARKEY: And that was one of the good
things about SB9 last year because of the, yeah it
had multiple sections to it, the RPS expansion was
the great thing but you can’t achieve the goals in
the RPS standard if you’re handcuffing your own
solar industry to make it happen.
REP. ACKERT (8TH): Thank you. Thank you, Mr.
Chair.
SENATOR NEEDLEMAN (33RD): Representative Arconti.
REP. ARCONTI (109TH): Does the industry have any
specific suggestions how long the evaluation process
should last if we decide to broaden the scope?
BRENDAN SHARKEY: Well as you know, and attached to
my testimony and it also attached the testimony of a
lot of those who are presenting today, we actually
have the language that we propose to the Committee
for changes to last year’s SB9 and in that we have
recommended frankly a two-year push off with
specific recommendations on how we could analyze the
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value of solar and use that to inform our decision
not just do it and put it on a shelf but have it
become the basis for this transition and this new
2.0 approach. So yes, the industry does, and I
should add last year, I think it is fair to say,
that because the SB9 Bill as presented by the Malloy
Administration was so varied there was division,
right, I mean I think the environmental community
wanted, all of use wanted the RPS standard to be
expanded but that was married to a net metering
change and so it wound up causing dispirit interests
at the time and it made it difficult to sort of
express clearly what the position should be. Since
SB9 was passed both the environmental community and
the industry itself, the solar industry has come
together with a united message to where we stand and
that is represented also in our testimony. A
document and a letter to the Committee signed by
over 40 if not 50 members of both the environmental
and solar community. So yeah, we do have an
initiative. What we’re thinking is two years
implementation date sometime in 2021, that is
generally what we’re thinking about but the study
has to be real and it has to inform the ultimate
decision on how we go forward.
REP. ARCONTI (109TH): Implementation of a new
program in 2021?
BRENDAN SHARKEY: Right but maintaining what we have
right now and extending those so that the industry
can stay here in Connecticut while we are
transitioning into the new paradigm.
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REP. LANOUE (45TH): The chairman asked my questions
so when the Speaker answered it, so I’ll yield back.
Thanks.
SENATOR NEEDLEMAN (33RD): Representative Demicco.
REP. DEMICCO (21ST): Thank you, Mr. Chair. And Mr.
Sharkey welcome back.
BRENDAN SHARKEY: Thank you.
REP. DEMICCO (21ST): Thank you for your testimony.
I have a pretty elementary question I guess for you.
I am curious to know what is the rationale for the
instantaneous netting and what is the theory behind
that?
BRENDAN SHARKEY: Well I think you would have to ask
the authors of that. I think it’s felt by some that
the normal system of monthly netting is what is
creating the exorbitant, what is perceived to be or
is fixed by this cost shift that was discussed
earlier. Monthly net metering allows the customer
to back the excess power that they produce over what
they use, right, and bank it and it is netted at the
end of the month and whatever credits they have
carryover to the next month and then at the end of
the year it is trued up and either credit goes to
the customer or not. I think having a daily
metering system or an instantaneous metering system
means that only what you produce is only offset by
what you are using the moment and then everything
else that you produce goes backout the grid and you
get a value for that but it’s not the retail rate.
So you’re asking me to give the other side’s
explanation for this but what I think what they will
say is that a daily or instantaneous buy-all/sell-
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all as it’s called system is somehow leveling the
price structure so that there is not as great a
subsidy to the customer. I think that is what their
argument is but it is a flawed argument.
REP. DEMICCO (21ST): But would it be fair to say
that system provides a pretty significant
disincentive to the industry?
BRENDAN SHARKEY: Absolutely. I mean there was a lot
of discussion in the Committee earlier about battery
storage and I know Senator Needleman you were,
battery storage is impossible in the case of
instantaneous or daily netting, it’s impossible
because you are not able to store the power, the
excess power that you’re producing on site, right.
You can’t keep it. You have to send it back out and
you get some credit for it but not the same as you
would whereas so it’s a tremendous disincentive to
battery store it which in Connecticut, in fact my
client SunPower is moving into the battery storage
area in other states but it cannot come to
Connecticut if this type of metering structure is
allowed to continue to go on because it is
expensive, you know, as any system is, it’s
expensive, it completely obliterates the financial
incentive to be able to do that storage.
REP. DEMICCO (21ST): Thank you. Thank you, Mr.
Chair.
SENATOR NEEDLEMAN (33RD): Anyone else? So, Mr.
Speaker for coming. Just to summarize we’ve heard
from people in the solar industry who have basically
said that leaving the net metering as it is now
written in the new Law is basically the death of
residential solar in the State of Connecticut.
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BRENDAN SHARKEY: And commercial.
SENATOR NEEDLEMAN (33RD): And commercial also. I am
a little unclear about why the, where in the law the
net metering if you have a battery between you and
your meter, between your panels, your battery, your
house and then the meter why wouldn’t the battery
just divert the power? So you’re not allowed to do
that?
BRENDAN SHARKEY: You’re not allowed to do that,
that is my understanding.
SENATOR NEEDLEMAN (33RD): I don’t know how they
would know [Laughter].
BRENDAN SHARKEY: Well there’s a meter attached to
out plug. So there’s two meters in that system, one
to measure what you are taking in and one to monitor
what you’re sending out. So if you’re diverting.
SENATOR NEEDLEMAN (33RD): But if your battery, if
your batter is from your panel, to your battery, to
your outflowing meter, and you’re filling up that
battery prior to it’s hitting the meter going out.
BRENDAN SHARKEY: Our understanding is that would
not, well the financial benefit of holding on to
that power is one thing, my understanding is you can
keep the power in your battery and then send out the
rest. But what you’re sending out, the rest is at a
much lower rate and so, therefore. Yeah, you’re not
getting the retail.
SENATOR NEEDLEMAN (33RD): That I get. I understand
that that’s.
BRENDAN SHARKEY: I’m sure a subsequent speaker can
give you a little bit more.
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SENATOR NEEDLEMAN (33RD): But I still think that if
your build your battery large enough and you store a
day’s worth of, an average days worth of power
anything else that goes out, you know, if you’re
building your system to not be a private power plant
where you are looking to supply to the grid but
they’re really looking to meet their needs, if your,
you know, before the meter battery restorage is
adequately sized or correctly sized you would store
the rest of the days worth of power and I don’t know
how they could stop you from doing that.
BRENDAN SHARKEY: Let me allow one of the more
technical folks to answer that question.
SENATOR NEEDLEMAN (33RD): Thank you so much for
coming. I appreciate it. Thank you. We’re gonna
flip back to our other list, Representative
MacLachlan is here. Good afternoon.
REP. MAC LACHLAN (35TH): Good afternoon, Mr.
Chairman. How are you?
SENATOR NEEDLEMAN (33RD): Great.
REP. MAC LACHLAN (35TH): Good to see you up there,
sir. Thank you for allowing me the opportunity to
testify on 7251. Members of the Committee thank you
very much. My name is Jesse MacLachlan, I represent
the 35th District, the towns of Westbrook, Clinton
and Killingworth and I want to offer some thoughts
on how 7251 can, and I believe needs to improve for
the benefit of the State, the solar industry and
hardworking men and women in the industry.
Having formerly worked in the solar industry as a
developer in a Connecticut based company I saw
firsthand how sensitive the industry is to even the
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slightest policy change at a federal level and a
state level. Even when the 51 Trade tariff was
officially field we saw modules disappear off the
market and prices increase by 40 percent. And that
was even before the tariff was implemented so I
wanted to just offer some feedback on language in
this Bill and some suggestions just from some
firsthand experience.
We really shouldn’t rush into implementing a
successor to the net metering policy while also
tying our own hands as to how we do it and limiting
ourselves to two options. I don’t know what the
final answer should be but I think we absolutely
should take, you know, the two to three years other
states have taken to look at the value of solar and
allow PURA to come up with what is best for our
State. As you know the numbers have been discussed,
thousands of industry workers in the State of
Connecticut, even slight policy changes have serious
repercussions from the reasons that I’ve mentioned
earlier. We say, I think a 15 to 20 percent
decrease in the total installed nationwide capacity
just from the federal trade tariffs that passed so
we do need make sure that we don’t fall into the
same position that states like Maine have fallen
into or Nevada. I don’t think this should be rushed
into.
There are some great things in SB9, I voted for it.
We extended the ZREC. We looked at increasing the
portfolio standards, that’s all good stuff,
definitely keep it. But lets now shoot ourselves in
the foot in here. You guys have a hard job ahead of
ya. Love to be a resource anyway I possibly can and
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I hope we can take a step back, take the handcuffs
of PURA and do this the right way.
SENATOR NEEDLEMAN (33RD): Thank you,
Representative.
REP. STEINBERG (136TH): Representative, thank you
for taking the time to testify today. It is good to
see all of us who had hoped for the best in SB9 now
recognize how deeply flawed it is and how important
it is to get it right this time. I’m taken by your
testimony urging prudence and patience to get it
right. There seems to be a general sense ever since
we tried to come to a compromise in SB9 that’s sort
of hurdling to some outcome with perhaps a false
sense of urgency. I think the point’s you’ve taken
about other states having actually damaged the
progress of their solar industry by going down the
path of tariffs without having though through the
consequence. I have actually very good examples for
why Connecticut should take a more deliberate
approach in making sure we get it right before we
start instituting a tariff program so I really
appreciate your coming today and outlining the fact
that this is not a partisan issue it is an effort on
behalf of all Connecticut ratepayers to get it right
at the same time supporting important jobs in the
solar industry. Thank you, Representative.
REP. MAC LACHLAN (35TH): Thank you, Representative
Steinberg for your leadership on the issue.
SENATOR NEEDLEMAN (33RD): Thank you. Anybody else?
Thank you for coming.
REP. MAC LACHLAN (35TH): Thank you, Mr. Chairman.
SENATOR NEEDLEMAN (33RD): John Emra. Good afternoon.
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JOHN EMRA: Good afternoon, Mr. Chairman, Members of
the Committee. My name is John Emra with AT&T. I am
here to testify on behalf of House Bill 5152 in
support of the legislation. I want to first start
by commending Governor Lamont and his Administration
for the introduction of this Bill. He has shown
continued leadership on the issue of 5G deployment
and availability and I also want to thank the
Committee for it’s consideration of the legislation.
Making 5G a reality in Connecticut is dependent on
rule that allow for the deployment of wireless
infrastructure. Small cells and typical macro
wireless cells alike. Now Connecticut already does
a very good job in some respects in that regard.
Deployment of small cell on utility poles, the
electric distribution system for example is a very
good process. The system is working very well and
is leading to deployment. Now where Connecticut can
do a better job of frankly is in the use of existing
state property for the deployment of wireless
infrastructure and also making some efforts around
the use of municipal property like light poles,
traffic signals and the like. House Bill 7152
address both of those needs.
Under the terms of the legislation the proposed
Council will provide a process or a front door if
you will for the industry to come and apply to the
state for the use of state property for placement of
wireless infrastructure. Now I want to be very
clear, it doesn’t obligate the state to accept any
proposal we have or request to use state properly,
it just creates a process for us to apply to do so.
The state retains the opportunity to say no to any
application which we think is smart.
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And finally Section 2 of the Bill by trying to pull
together in a collaborative process all the state
actors as well as municipalities to determine a
process that would allow for the streamline sighting
of wireless facilities on municipal property we
think is a good one. There are a lot of important
questions that go into that. I think the governor’s
office to their credit is taking the right approach
which is to try to bring parties together to have a
discussion to figure out what those right rules are
like and then hopefully to make a proposal or
presentation back to this Committee and the
legislature next session to take further action.
With that, I’m happy to take any questions you have.
SENATOR NEEDLEMAN (33RD): Thank you. Yep.
REP. STEINBERG (136TH): Thank you, Mr. Chairman.
Thank you, John for being here today. I appreciate
you’re giving the new administration credit for
being openminded about finding new ways to both
further the goal of access while also ideally
finding some revenue generation along the way as
well. You also heard the Governor recently talk
about the opportunities about public-private
partnerships. I was wondering if you were aware of
models in other states who were able to move forward
with the agenda whereby there is more of a
comprehensive plan rather than a site-by-site kind
of proposal which we could look at?
JOHN EMRA: I think and part of this legislation does
try to speak to that and we had some good
discussions with the administration in that regard
in trying to make sure the industry does a better
job of consulting with the state. So we don’t come
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in with sort of one-by-one examples but to layout
sort of what does our work plan look like the next
six months to a year. We think that is probably the
right approach to take. We suggested some sort of
clarifying language to the administration on some of
the language in the Bill and look forward to working
with them and with you towards that regard. But we
think there is certainly an opportunity for us to
work with this administration in that regard.
REP. STEINBERG (136TH): And we know that there’s a
challenge to negotiate with a governor who knows as
much about this as many people on your side but it
does seem to be an opportunity for a potentially
grander bargain that could be a win-win for all the
parties involved and I would like to see more of a
strategy inherent in this rather than an approach
whereby we or the appropriate entity considers a
specific site proposal in a vacuum which may not be
clear as to what the ultimate goal is.
JOHN EMRA: Yeah, understood. I think that’s the
intent of the administrations language in creating
that Council is to have that broader strategy
looking at a whole picture what is going on in the
State of Connecticut.
REP. STEINBERG (136TH): Thank you, Mr. Chair.
REP. PISCOPO (76TH): Thank you, Mr. Chairman.
Thank you for your testimony. Appreciate it.
JOHN EMRA: You’re welcome. Thank you.
REP. PISCOPO (76TH): Just a quick follow up on the
site question. What has been your experience with
trying to site on state properties.
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JOHN EMRA: It has been frustrating to say the
least. I think it very much depends on the
particular agency with whom you’re dealing with
whether it is the Department of Transportation, or
DEEP or one of the universities. Quite often just
trying to get any sort of response at all it will
take six months to a year to get any sort of
acknowledgement of a request in some cases, not all,
and it’s been our experience particularly with DOT
property as an example where they said we understand
what you’re trying to do, or actually that was about
a year of them trying to understand what we were
trying to do and then essentially their view was we
just aren’t allowed to do this under the laws as
they exist today. And we had, I thought, a very
good and frank conversation with them about, no
let’s change the law to allow for it. And I don’t
think it’s something and I don’t want to put words
in the DOT’s mouth that they just disagree with,
they just want to make sure they are allowed to do
it under the law and I think that is really the
intent of what the governor is trying to do here.
But the process today is, to be very frank with you,
flawed. I’ll give you two good examples. We were
trying to build a small cell at a weight station in
Greenwich and also at a rest area in Darian. These
facilities are about 12x24 with two radio units that
are 8 inches by 8 inches. It took like I said six
months to a year to eventually be told, “No.” When
I did an appeal up to the Commissioner’s Office for
further consideration again the answer was “No”
because of the law. But frankly a facility of that
size to me doesn’t seem like it should a) ever end
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in an answer of no and b) shouldn’t take that long
to have an answer rendered either.
REP. PISCOPO (76TH): I guess the follow up to that
with your experience with municipal side.
JOHN EMRA: The municipal side is really important.
So as I mentioned earlier Connecticut has a really
good rule with respect to placing small cells on
wooden utility poles in the electric distribution
system and that works great for large parts of
Connecticut but when you get in denser environments
were there is not an electric distribution center,
where there are not utility poles, you need to use
other facilities so light stanchions and the like
and we have done this throughout the country with a
lot of success. In Connecticut what it really
requires is an agreement with the carrier and
between the city so the property you are able to
use, what the process is to apply to use that
property, the rent, terms and conditions which you
will be able to use it. Even getting redline
comments to a proposed draft agreement, a standard
agreement that we’ve used all over the country, has
taken a year if not longer. We have been working to
try to get agreements in five or six major cities in
the State of Connecticut for the better part of two
years and still don’t have an agreement. So I think
it’s ripe for action. I do think the Governor’s
Office to their credit again has taken the right
approach which is let’s get everybody in the room
and figure out what this looks like not just, you
know, offer up instead of recommendations but let’s
work cooperatively together. That is something that
we at AT&T and I think others in the industry would
be welcome to do.
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REP. PISCOPO (76TH): Thank you.
SENATOR NEEDLEMAN (33RD): Thank you. Anyone else?
Have a lovely day, thank you so much.
JOHN EMRA: Thank you, Senator very much.
SENATOR NEEDLEMAN (33RD): Next on our list is Beth
Cooley. Good afternoon.
BETH COOLEY: Mr. Chairman, Members of the Committee
my name is Beth Cooley. I am the Senior Director of
State Legislative Affairs at CTIA. CTIA is a trade
association for the wireless communications industry
and we represent the wireless carriers, handset
manufactures, App companies and their suppliers.
I am here to express our support with amendments to
House Bill 7152. House Bill 7152 outlines a laudable
goal: seeking to create a process for the deployment
of personal wireless service facilities, including
small wireless infrastructure or small cells on
state assets. The legislation is well-intentioned,
but we do have some concerns that there may be some
negative unintended consequences. We look forward
to working with the Administration and this
Committee to address these concerns.
Firstly, House Bill 7152 addresses the key issue in
the State Connecticut the fact that there are more
wireless devices than there are people and over one-
third of residents of Connecticut are within
wireless only households. Now believe it or not,
you actually can make a phone call on your wireless
device. The trend is toward an insatiable amount of
appetite for mobile data which has been breaking
records year over year. Because of these demands
from the wireless industry’s customers, your
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constituents, wireless networks need to be both
updated to meet todays’ demand and readied for the
next generation of wireless networks called 5G.
House Bill 7152 addresses this key issue.
So as Mr. Erma mentioned, we’re talking about House
Bill 7152, what does it do? It recognizes the
existing rules governing wireless networks. They
are designed for wireless facilities that can be up
to 200 feet tall or higher. Tomorrow’s networks
will rely on new small cell technology which will be
placed on structures such as utility poles and
streetlights. These new networks need new rules and
House Bill 7152 establishes a common sense framework
for deployment on state facilities.
House Bill 7152 is also a step towards realizing 5G
or Fifth Generation in Connecticut. 5G networks
will provide needed additional capacity to
accommodate growing consumer demands and help
connect 100 times more devices, up to 100 times
faster than today.
This is also an exciting economic development time
as Accenture has found that 5G and small cell
deployment will provide tremendous economic benefit.
Specifically Accenture estimates that wireless
operators will invest as much as $275 billion
nationwide of their own money, not taxpayer money
creating up to three million jobs nationally. In
Connecticut and specifically in a community like
Bridgeport we could see the creation of 1,300 jobs
and an increasing GDP by over $220 million dollars.
Now you may have recently heard the FCC, the
Federal Communications Commission took action in
this space by setting clear timelines and cost based
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fees for state and local siting purposes. Now what
the FCC leadership in this role in states remain
critical, states still play a critical role in
operationalizing the order and that is what House
Bill 7152 helps to do. Over 21 states at this time
have passed statewide small cell legislation and we
expect approximately a dozen states to consider
similar legislation this year.
House Bill 7152 acknowledges that date certain
action after an application for small cell if filed
is needed and that is compliant with the FCC Order.
So in closing, CTIA and our members support House
Bill 7152 with amendments. We applaud the
Administration and look forward to working with the
Administration and interested stakeholders to move
it forward. Thank you.
SENATOR NEEDLEMAN (33RD): Thank you, Beth. Anybody
have any? Yep.
REP. WINKLER (56TH): Just one question. Is it the
industry’s belief that the radio frequency radiation
issued by these small cells is harmless despite, you
know, location in buildings or at beaches or
whatever?
BETH COOLEY: So CTIA, we are not a scientific
agency. We defer to those agencies and experts who
are. First and foremost we comply with the FCC’s
radio frequency guidelines so all of our facilities
have to adhere to those emission levels which are
very conservative and hundreds of times set below
any such issues that may have been found to humans
which there have not been. It is important to
remember that the RF emissions for small wireless
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facilities in the spectrum that is anticipated to be
used is nonionizing. So again, I’m not the
scientific agency, we defer to those that are and
the science that is out there which we would be
happy to provide to you did not show a linkage
between.
REP. WINKLER (56TH): Are you aware that the Federal
Government forbids the states to take radio
frequency radiation into account when dealing with
or siting these locations.
BETH COOLEY: Yes, I am aware.
REP. WINKLER (56TH): Thank you. Thank you, Mr.
Chair.
SENATOR NEEDLEMAN (33RD): Thank you. Anyone else?
Thank you so much.
BETH COOLEY: Thank you very much.
SENATOR NEEDLEMAN (33RD): Amanda DeVito. Good
afternoon.
AMANDA DEVITO: Good afternoon Senator Needleman,
Representative Arconti and other Members of the
Committee, thank you so much for giving me the
opportunity to appear before you today. My name is
Amanda Devito Trenzy and I am here on behalf of the
Connecticut Industrial Energy Consumers or CIEC.
Take a little break from solar, we’re gonna talk
about energy efficiency and I am here to talk about
HB 7252 which proposes putting a limitation on the
monthly charges that commercial and industrial or
C&I customers would pay energy surcharges --
surcharges that go into the energy efficiency fund.
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So to give you a little bit of background on CIEC,
we are a coalition of large f large commercial and
industrial end-users in the state and we
collectively employ over 40,000 Connecticut workers
statewide. Members account for a substantial of all
of the electricity consumed in Connecticut and
energy is really an integral component to member’s
operations in this state. As we are going through
this discussion it is important to remember that
when we’re talking about energy costs even a
seemingly small number like a 0.001 or mill per
kilowatt hour increase is actually quite significant
and results in an increase of hundreds of thousands
of dollars to these large C&I customers.
So we are here today to talk about how the costs are
collected from the C&I customers to fund the
Conservation and Load Management Plan or the state’s
energy efficiency programs which are then administer
by the EDTs or electric distribution companies.
Importantly I want to make it very clear in our
discussion today that CIEC members are huge
proponents of energy efficiency, sustainability and
in no way want to irreparably harm the state’s
energy efficiency programs and in fact we want to
continue paying into this fund. However the way the
fund is collected is inequitable to large end users,
they are constantly using large volumes of
electricity for their manufacturing operations. And
so when we look at the energy efficiency programs
they have two components: One, you want to reduce
consumption and two, you want to reduce peak demand.
And so collecting the funding for energy efficiency
programs on strictly a volume metric basis or a per-
kWh basis really doesn’t reflect the program. So
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these non-bypassable surcharges such as the CAM the
Conservation Adjustment Mechanism and the Combined
Public Benefits Charge that is what is used to
collect the energy efficiency charges. These
surcharges account for large portions of C&I
customer bills and that is not accounting for the
actual energy supply itself or the poles and wires
to bring energy or electricity to the customer.
So what we have for you today with HB 7252 is we are
introducing a Bill that would place parameter on the
amount of monthly energy that C&I customers would be
assessed their energy efficiency surcharges on.
While obviously the Bill didn’t include the actual
threshold number and that is intentional because we
want to work with the program administrators to
really strike the right balance that says, okay how
can we place some limits here so that it is fair and
equitable and promotes economic productivity, carbon
reductions, all those good things to keep the
savings local to the Connecticut economy, local to
put people to work. We want to create a farm to
payroll type manufacturing network where we keep
things within the State. And what’s the right
balance so we’re not harming the program but we’re
also providing real and meaningful benefits to C&I
customers that are really goin to shape and impact
the way they do business here.
So, just to close I am going to turn it over to
questions, for some questions. I appreciate the
opportunity to present this Bill to you all today
and it is very important to C&I customers in the
state and as they try year after year to maintain
their competitiveness while simultaneously
continuing sustainability and efficiency measures
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and we would be happy to meet with all the Members
of the Committee to discuss specific use cases and
also stand ready, and able and willing to work with
the program administrators who really strike the
right balance on how we could move this concept
forward. Thank you.
SENATOR NEEDLEMAN (33RD): Thank you, Amanda. Anybody
have any questions? Have a lovely day. Will
Hershel, Will? Ben Healy. Good afternoon.
BEN HEALY: Good afternoon, Mr. Chairman, Ranking
Members and all members of the Committee. My name
is Ben Healy. I work as the Executive Vice-
President for a Company called PosiGen. Until
recently worked with many of the folks in this room
as the finance team member of the Connecticut Green
Banks so I am pleased to be here in my new role and
I am speaking mostly in PosiGen’s role as the only
solar company solely focused on serving low and
moderate income customers with a focus on blue-
collar communities.
The company, PosiGen has operated in Connecticut
since 2015, has an office in Bridgeport. A second
one recently opened in Hartford and is looking to
open a call center in the Northeast hoping it will
be in Connecticut as well based on the right policy
conditions in the state. I am going to spare
everyone the history of the company in the interest
of time and letting a lot of folks speak who are
waiting to do so.
But simply want to say from a low and moderate solar
perspective Connecticut has been a great place to be
thanks to the partnership that PosiGen has had with
Green Bank. The company’s focus is every customer
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when taking into account net metering the RSIP and
an energy efficient wrap to every customer gets will
receive at least $500 dollars’ worth of savings a
year. To put that into very clear terms these are
folks whom $500 dollars’ worth of savings means
groceries, school supplies and the essentials of
living in a high cost state and the existing policy
regime, net metering plus the RSIP has worked
incredibly well for 2,000 plus customers that
PosiGen now serves in the State of Connecticut, that
is 2,000 plus customers supported by 70 direct jobs
that PosiGen has translates to $20 million dollars
in money back into the pockets of Connecticut
customers.
From a high level perspective PosiGen would like to
encourage the Committee in line with the broad
mandate that seems to be moving forward here, to
continue to the net metering regime to restorative
effectively at least through the period when the
federal investment tax credit declines. It seems a
very inopportune moment to disrupt the industry when
you have an elevated ITC that is being used by
Connecticut home owners to be able to take advantage
of those savings. This is especially true for low
and moderate income homeowners who can’t often
directly take advantage of that federal ITC because
of the tax credit nature of it. So having a third
party structure that can monetize it, pass that
value through in the form of savings is really where
the value comes through in terms of making sure the
dollars and cents are going back to those who need
it most.
So, from as PosiGen perspective just keep it short,
an extension of net metering seems to be appropriate
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especially given all the confusion on terms with
respect to the current policy regime and in the
event that is not on the table, nonetheless a tariff
that specifically follows the Massachusetts model
looks to add LMI customers to make sure those who
have older homes, older electrical systems where the
work needed is much more significant can benefit
from an appropriate investment in state dollars that
can translate into savings for those homeowners,
again those who need it most. We are talking about
fixed income, Social Security income, low income,
talking about working folks.
I’ll end with this. The PosiGen model does not
require a FICO check because it looks at solar as an
alternative, solar plus energy efficiency is an
alternative to utility repayment and it uses that
value, the value that customers get as the way
investors get comfortable, private investors get
comfortable financing solar for those who need it
most. So if the companies go and I’ll leave my
testimony with staff is really to say net metering
has worked. We see a path beyond it, the tariffs if
need be but making sure that in the current
environment we take advantage of the ITC maximize
that value and build an industry that can transition
is really the goal. With that I’ll end my comments
and invite any questions.
SENATOR NEEDLEMAN (33RD): Thank you so much. You
guys a non-profit?
BEN HEALY: The for profit company but the
alternative underwriting approach makes a lot of
folks think it is a non-profit so it is a not yet a
certified D-Corp but the idea is to move in a
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direction where folks understand there is a value in
mission basis to the company but also all the
capital is the same traditional tax equity
investors, big banks, etc. behind the company just
very much at a higher cost of capital because they
see the population we serve as risker. The whole
missions of PosiGen is to say, listen if you’re
saving money on their bills, they are going to pay
those bills because they are going to want the
lights on and the refrigerator running. So overtime
we bring that cost of capital down and bring it more
in line with the industry. But having a state
partnership on that with the Green Bank has been
critical to showing Connecticut how that can be
done.
SENATOR NEEDLEMAN (33RD): That’s great. Thank you.
REP. STEINBERG (136TH): Thank you, Mr. Chair.
Thank you for your testimony today and for giving us
a little different perspective on this particularly
the work that your organization does, does highlight
that people are willing to invest a bit more in
order to obtain certain critical social outcomes and
really very important. You mentioned the
alternative of the Massachusetts tariff model. Can
you tell us, I don’t have your testimony before me,
how long has that been in place and do you have any
sense of their experience with it?
BEN HEALY: The Smart Program in Massachusetts was
rolled out and finally implemented in 2018 so it is
a relatively recent phenomenon to have this LMI as
part of it and from what we’ve heard from industry
colleagues up there and I’ll defer to other because
there are plenty of cross-state players has been
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that having a base level tariff with an adder
structure for the various components it sort of
builds on a net metering framework rather than fully
disrupts it, has allowed companies that want to
serve not just traditional customers but like
PosiGen going down to the lower income, the more
blue-collar communities to be successful and I think
it is a model that we could look to as part of a
broader study. It doesn’t strike me as within the
current regulatory regime or the former regulatory
regime, the evolving regulatory regime in
Connecticut something we have to say, lets turn that
on tomorrow, it seems like there is an evolving
consensus that we are moving too fast but in that
future state a tariff structure with adders are
harder to serve populations, certainly seems like a
very viable approach.
REP. STEINBERG (136TH): I know you’ve given
Committee members something to think about given
that we’re already intending or at least thinking
about pausing moving forward with the proposed
regime in SB9 it’s good to hear there are other
tariff models out there that might be very
appropriate to the State of Connecticut and I would
think this argues in favor of a slower more
deliberate approach for Connecticut and making sure
we get it right the first time rather than having to
go through the experience other states did implement
tariff regimes and then have to back off and so,
thank you for that. I look forward to seeing your
testimony. Thank you, Mr. Chair.
BEN HEALY: I think the point I would make in
response is simply that given the way we are in time
with the Federal ITC stepdown, this is really, the
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confusion in the industry and the pushing and the
disruption is inopportune just because we have this
ability to take advantage of so much Federal ITC now
that we should maximize that and so it give us the
opportunity to move in sync with that rather than
lose that moment.
SENATOR NEEDLEMAN (33RD): Thank you. Anyone else?
Thank you so much.
BEN HEALY: Thank you, sir.
SENATOR NEEDLEMAN (33RD): Lori Vitagliano. Welcome.
LORI VITAGLIANO: Good afternoon, Chairman
Needleman, Chairman Arconti and Ranking Members of
the Committee. My name is Lori Vitagliano and I am
here on behalf of the South Central Connecticut
Regional Water Authority. We are a non-profit
public corporation, political subdivision of the
State. We provide approximately 45 million gallons
of water per day to some 430,000 consumers in
Greater New Haven 15 communities and we appreciate
the opportunity to provide comments on House Bill
7115 AN ACT CONCERNING VIRTUAL NET METERING.
We request respectfully that the Bill be amended
clarify the Virtual Net Metering (VNM) hosts. While
state and municipal entities are allowable hosts, it
is our understanding that “political subdivisions”
must be specifically listed in order for Regional
Water Authority as a political subdivision of the
state to benefit from solar power and virtual net
metering. The clarification would allow us to
further our commitment to renewable energy and
environmental sustainability while helping us
mitigate our operational costs through reduced
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energy expenditures that will ultimately lower rates
for our customers.
As a public water utility we operate more than 120
pump stations and treatment facilities throughout
our water district and not all of these facilities
are in locations that are well-suited for the
placement of renewable energy equipment and with
virtual metering the RWA would be able to take
advantage of renewable energy projects, lower our
costs by siting renewable energy equipment at
appropriate locations. One single solar array
installed at one water treatment plant would be able
to help reduce the conventional electricity loads at
the other treatment plants or a pump station and it
would allow the most effectively use our resources
and would help us continue to reduce our carbon
footprint by increasing the use of clean energy
sources. And I’ve heard the testimony and I’ve
heard from last year SB9 so we know there is a
possibility of things changing or holding or
transition periods so we respectfully request that
the host be evaluated to allow us as a political
subdivision to be part of the beneficial host.
Thank you.
SENATOR NEEDLEMAN (33RD): Thank you. Anybody have
any questions? Have a lovely afternoon. Debora
Goldstein. Welcome.
DEBORA GOLDSTEIN: Why, thank you. Distinguished
Members of the Energy and Technology Committee my
name is Debora Goldstein. I currently have the
privilege of serving as a voting member of the CEEMC
Board of Directors and Alternate Member Delegate to
Chair this Legislative Committee and the Chair of
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the Special Committee investigating the activities
that lead to PA 17-73. My eligibility to serve at
CMEEC is a result of having been elected to the
Third Taxing District, I represent the electors and
rate-payers of East Norwalk within the City of
Norwalk. TTD’s mission is to provide the most
reliable electrical service, for the lowest cost,
with the best customer service. Period. And I am
pleased to say that we are beloved as a utility by
our ratepayer-owners. It is important that you
understand how much value we are able to deliver as
a result of our membership in CMEEC.
I am here today to talk about the unintended
consequences that will result from Senate Bill 961.
Make no mistake, the bill before you will serve to
reduce the operational efficiency of CMEEC and
increase costs to the downstream rate-payers;
despite its laudable attempts to do the opposite.
Almost all of the newer requirements in 961 add
little direct value for the amounts of effort or
increased costs involved—whether duplicative audits,
stringent disclosure timelines or finetuning of
voting standards. Taking projects away removes a
tangible offset at the times when energy costs are
highest, and advance power contracts alone simply
cannot capture that value. A municipality as small
as Third Taxing District would be hard-pressed to
reproduce the services provided by CMEEC, much less
to do so at a comparable cost.
CMEEC has taken substantial and appropriate action
to improve the controls and oversight necessary for
a public agency; both in response to Public Act 17-
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73 and in response to a newly configured board that
takes their duty of care very seriously to the
membership, to the rate-payers and to its rank and
file employees. And CMEEC is continuing to deliver
value to its membership, even as it deals with the
continued fall-out from sins of the past.
Among the steps taken was the creation of a Special
Committee charged to overseeing an outside
investigation by independent counsel, reviewing
those findings and making recommendations to the
full board for remedial action. Those are in
addition to the ones that it’s already pursuing.
And while it is difficult to detect bad actors who
are intent on deceiving those who manage them, I
believe that the lessons learned from this
investigation will provide the best guidance for
ensuring that it never happens again.
Our rate-payers in East Norwalk are proud of their
ownership in a system that delivers low-cost
electricity with rates that have not increased since
1985. They are proud of the fact that our lights
stayed on in the wake of storms Irene and Sandy.
They are proud of the living people answer our
phone. They are proud of our local library, and
other community services and our success is a
testament to the success of the CMEEC business
model, which remains sound.
The challenges our industry faces in the years ahead
are substantial. Climate change threatens our
infrastructure, disrupter technologies like smart-
grids, solar panels and battery storage nip at our
margins and we need the time and the expertise to
move our industry away from fossil fuels. It is our
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hope that you allow us to continue to depend upon
one thing that has been working, and continues to
work, as we turn to face those challenges.
Thank you for the opportunity to testify before you
today and I welcome any questions to someone who is
at the MEU Level in public power.
SENATOR NEEDLEMAN (33RD): Thank you, anybody have
any questions? Yep.
REP. PERILLO (113TH): Thank you, Mr. Chair. Thank
you Ms. Goldstein. Good to see a Norwalk person up
here. It’s all right. Thank you for your
testimony. I was going through it and I was just
curious, I didn’t really see anything about the
funds, energy etiquette. I mean does this
legislation get this part right as far as you can
say?
DEBORA GOLDSTEIN: Thanks for the question. It is
actually hard to speak to everything that’s in the
Bill in three minutes. My suggestion would be to
leave the language as it originally appeared in 17-
73. The legislature wisely recognized that the
heavy lifting of this engagement would be done at
the front and it set a baseline for what was gonna
go on after the heavy lifting was over. Even under
those conditions all note that the MECA did not use
all of it’s first year fund. They already have
access to all of the expertise and it’s considerable
expertise at CMEEC and it’s at CMEEC’s expense.
Additional funds for consultants is probably
unnecessary and I would add the point that the voice
of ratepayer isn’t only represented by that one
individual or the ratepayer rep that appeared in 17-
73, I am an elected official. I report to my
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ratepayers. We bring our budget to them every year
at an annual meeting and they vote in an old
fashioned town meeting. They see our budgets and
they are not hesitant to talk to us at the MEU
level. We do understand what our ratepayers need,
want and expect.
REP. PERILLO (113TH): Thank you for that. Just
another attack. Love that you’ve spoken about the
idea of Connecticut getting out of doing projects
and that sort of thing and I am a little back and
forth because my concern is that the impact on the
actual NEUs is to me not clear and I am just
wondering if you could clarify some of that.
DEBORA GOLDSTEIN: Okay fair enough and thanks for
the opportunity to elaborate on the point. Advanced
energy purchasing which is the hedging in the energy
market can only take us so far in avoiding the
costliest energy purchases at the peak demand in the
market. Everything we’ve heard at the federal
policy level on down indicates these costs are going
to keep going up as long as our regional markets do
not change their rules. These projects allow us to
combine our resources as smaller utilities to sell
power when the demand is highest and offset our peak
demand costs when everybody is competing for the
same supply. Basically when power is most expensive
for our customers, it is also most profitable for us
to sell it on the other side in order to offset the
books in terms of cost. These projects also give us
a cost effective way to reach into the future of
electricity markets and to understand where our
investments have to go going forward in order to
move away from fossil fuels. And I know that’s a
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goal Connecticut is committed to with its Renewable
Portfolio Standards.
I’d also like to just note that there is not a
direct line between the cost CMEEC charges its
customers, the six member utilities and the handful
of others. What gets missed is that municipal
electric utilities typically pay pilot transfers to
the local municipality that fund other things. In
our case a public library, a cemetery, a fire house
and a series of other public services. Those things
would otherwise be paid for by property taxes and I
would argue that the visibility that our ratepayers
have to the budget in terms of what they are paying
for with their electric rates is clearer than it
would if it was going through the property tax
basis. Those pilot fees people forget that they add
to the retail rate and they do benefit the ratepayer
but not necessarily in their retail bill and you
cannot draw a straight line between those two
figures.
I am also going to note for the record because there
were a number of questions about passing our profits
back from CMEEC in the form of lower rates, the TTD
did exactly that a couple of years ago after a cost
of service study indicated to use that we could
share some of the value that we were earning and we
lowered the rates for our largest commercial
customer, a wastewater treatment plant by 11 percent
over three years. That effectively benefited
everybody in the City of Norwalk despite the fact
that it was coming from our little tiny utility in
one corner.
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REP. PERILLO (113TH): Thank you. That is a great
answer and I appreciate you doing your homework on
that level. Previously we’ve been talking about
they cannot, you know, really focused on the idea of
transparency and oversight and it has been really
kicked around back and forth here in this Committee
today. The question has been raised what kind, to
what level do we need enhanced transparency based on
last year’s bill that already came through. So I’m
just trying to get a better sense of what the impact
of, you know, additional layers of transparency what
that’s gonna have on the any of this.
DEBORA GOLDSTEIN: Thank you. It’s a good point. I
as a ratepayer and a citizen in Norwalk like to
emphasize transparency, we’re always in beating up
the local town counsel and implementing
__040450___wide challenges. Quite frankly a lot of
language proposed this year is duplicative and were
this legislation to make it out of Committee as I
hope it does not, the way I read this CMEEC would be
subject to three separate regular audits. It’s
already held to meeting posted guidelines that are
far more stringent than other agencies in the State
of Connecticut under FOI and I would argue that the
carveouts from FOI for commercially sensitive
information should remain in place as we have
counter partiers that have indicated to us that they
would refuse to do business with us if this
information is made public. Even the SEC provides
for the exclusion of commercially sensitive pricing
information in publicly traded companies.
Furthermore I argue that there is a lot of
misunderstanding about the information that is
already made public. For example the request here to
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model the CMEEC bill to the PURA bill format, PURA
does retail bill formatting and the customers of
CMEEC or in fact municipal electric utilities with
some exceptions, if we were to follow the PURA
billing format there I’ve been told that it will
actually reduce our ability to see what we are being
billed for. We actually provide more detailed
information at this point in time. As another
example, there is an idea that those accounts up at
CMEEC, the Economic Development Accounts and the CLM
funds accounts and the other things that were
discussed earlier today are somehow hidden from our
ratepayers and for those of you who are able to sit
in on a Municipal Electric Utility Commission you
would understand that it is not the case. We get
audited at the MEU level, those amounts are
accounted for by the accountant, by the auditors.
They are reported to our commission on a regular
basis, they appear in our monthly P&L Reporting to
us and all of that information at the MEU level is
made available in our commission packets for anyone
to inspect or in any response to an FOI request.
Nobody is hiding anything. It is a difficult
industry to understand and sometimes what your
lookin at doesn’t seem to answer the question that
you have but ask us, we are happy to share the
information and we are happy to make it as available
as possible to our rate payers to the extent that we
can explain it and make it better, that will improve
everything we do. Thank you. I really appreciate
the opportunity today.
REP. PERILLO (113TH): Thank you very much for your
answers they have been very helpful. So back to the
Chair.
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SENATOR NEEDLEMAN (33RD): Thank you. Anyone else?
Senator Formica.
SENATOR FORMICA (20TH): Thank you, Mr. Chair. Good
afternoon, thank you for your testimony. May I ask
how long you have been a voting member for the Board
of Directors?
DEBORA GOLDSTEIN: I was appointed by my local
commission in November of 2017.
SENATOR FORMICA (20TH): So that was at or during
all the events of the day?
DEBORA GOLDSTEIN: Exactly, it was shortly after PA
17-73 we were informed had to start being
implemented and I think we got the letter in the
summer. But I will say it’s not connected to that.
Our general manager would have been the Board Member
there and our longstanding Chairman of our
Commission who had served for 20 years also retired
so we had a couple of openings and some shifting
around. I had been on the municipal utility
commission for four years and it takes us that long
to get up to speed on the industry.
SENATOR FORMICA (20TH): In Norwalk?
DEBORA GOLDSTEIN: In Norwalk. That is correct.
SENATOR FORMICA (20TH): Is it Norwalk or East
Norwalk or is that two different districts or?
DEBORA GOLDSTEIN: The taxing district gets ya every
time. So Norwalk’s got an Amalgamated Municipality
Charter that includes taxing districts, they are
kind a like special services districts on steroids.
We are allowed to offer these municipal utility
things and we function like a municipality in terms
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of taxation, property seizures and things of those
nature but we are only here to deliver the services
from the municipal utility and the small amount of
district services that that funds through pilot
transfers. So depends on what context you’re
talking about, municipality, we are a municipality
in our own right in certain legal environments but
we are part of the City of Norwalk.
SENATOR FORMICA (20TH): Thank you for that answer.
I have in my town six, or seven or eight now beach
associations and they operate I think in a similar
way.
DEBORA GOLDSTEIN: Indeed they do.
SENATOR FORMICA (20TH): It’s kind a difficult to
keep that up to speed but as a member of the Board
of Directors either you or the people that I guess
worked above you or with you or whatever parallel
with you, they must have been aware of all of this
going on and you said that your rates haven’t gone
up since 1985?
DEBORA GOLDSTEIN: That is true of the third taxing
district. I can’t speak to the other municipal
electric utility and to be clear and not to be
misleading to the Committee that does not mean
people didn’t pay more for electricity at certain
times or less for electricity at certain times, if
you remember the CLM Funds flow into rate
stabilization funds and are need to account for when
power is higher or lower is adjusted through a
mechanism called the Power Cost Adjustment. Some
municipalities call it something a little bit
different but our base rate as filed with PURA has
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not changed or increased since 1985. That is
correct.
SENATOR FORMICA (20TH): So all of these dollars
that flowed out for these various events and
indiscretions if you will that have occurred over
the years it had no effect on any of your rates at
all that you’ve seen, had no effect on you as a
board member, you didn’t speak about it with any of
the people you mentioned, your director or manager
before I forget, the two gentlemen you mentioned?
DEBORA GOLDSTEIN: Our general manager and
commissioner.
SENATOR FORMICA (20TH): Your general manager, thank
you. None of that, you know, was concerning and
listen, I don’t want to throw the baby out with the
bathwater here, but, you know, the fact of the
matter is we have some problems that need to be
corrected and the people that need to have those
problems solved are still in involved in this
organization and so I am a little concerned that
you’re coming here as a member of the Board of
Directors and, you know, defending the organization
completely. I find that difficult to believe.
DEBORA GOLDSTEIN: I don’t mean to suggest that
there was not wrongdoing, please do understand and
I’ve been sitting through some very painful meetings
over the last five months or so as the Chair of the
Special Committee, as an independent counsel does
what I would argue is an investigation that should
have been carried out years ago. As a member of
municipal electric utility I can tell you I was not
aware of the Kentucky Derby trip until they made the
newspapers at the other end of the state. We have
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taken steps at our municipal electric utility to
ensure folks like myself who go up to CMEEC are
clearing the individual utility and more fully.
That having been said, I go back to my statement
when bad actors are intent on hiding things from
managers, sometimes they can be very good at it and
it is unfortunate that we are still finding some
small items, the MECA is helping and going all
through that but I think the point has been made by
some of the previous speakers and may be made by
folks after me, the Board is largely comprised of
new people and there aren’t very many new fact being
found.
SENATOR FORMICA (20TH): So if I may interrupt while
you’re on that, has the Board taken steps to comply
with the law that is recently on the books this past
year and everything is?
DEBORA GOLDSTEIN: Absolutely to my understanding
they’ve taken steps to bring forward policy changes
to various policies. The Governance Committee is
looking at even new policies to try and tighten
things up. The bad actors here are not at the
organization any longer. Those who have been
indicted by the FBI they have been removed, possibly
at risk of liability to the Joint Action Agency
because they were removed without pay, right but
many of the Board Members felt very strongly about
making sure that we had the ability to, as Mayor
Hedrick said to you before, turn the corner. If I
had a time machine and I could go back and undo
this, I would.
SENATOR FORMICA (20TH): I think we’re all there, I
think we all are.
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DEBORA GOLDSTEIN: I do appreciate that. Again, I
point out to you that there is not a direct line
necessarily that you can draw from wholesale power
and the layers of cost that are applied at the
retail level, there are complexities to this
business and there is an idea that there is somehow
an ideal and optimal cost for power that we need to
get to. This is a commodity that is traded on the
market. We are constrained in things like gas
supply and everybody goes looking for the same power
sources at the same time.
SENATOR FORMICA (20TH): I think you’ve answered
the question. With all due respect there is a lot
of background in there, there is a lot of
indiscretions that occurred aside of what you’re
talkin about. I understand the purchasing of power
and all that. I understand the mayor’s concern
about what is gonna happen to the ratepayers in his
community if big organizations opt out of this whole
situation. I understand all of that. And I am in
agreement with, you know, some of good things that
they’ve done in order to provide low cost power over
time but there has been a lot, there’s been a lot of
indiscretions here that, you know, for you to sit
here and say that, you know, they are over complying
with things that other agencies don’t have to do,
well for God’s sake the reason that’s the case is
because, you know, they did all of this stuff. And
so I’m not sure where I am on this particular Bill.
I’m not sure where I’m gonna go on this, you know,
in terms of the investments and things but I think
there has to be some very close scrutiny and I think
there has to certainties that consumer advocates
gonna be extremely involved and the members on the
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board in the past probably shouldn’t be members on
the board in the present and that we should, if
were gonna move forward, let’s move forward, it not
we gotta start over. That’s my impression of this
whole thing. So thank you very much for your time
in coming up here and thank you, Mr. Chairman.
DEBORA GOLDSTEIN: Okay.
SENATOR NEEDLEMAN (33RD): Anyone else? Thank you.
Mark Oefinger. Good afternoon.
MARK OEFINGER: Good afternoon and thank you for
providing me with the opportunity to testify today.
My name is Mark Oefinger and I currently serve on
the CMEEC Board of Directors as the Groton Ratepayer
Representative. As you are aware the ratepayer
representative positions were a requirement of PA17-
73. I was appointed by the Groton City Council in
accordance with PA17-73 to serve on the CMEEC Board
of Directors and have served
I have attended and/or participated in all of the
Board of Director’s meeting since my appointment and
during my first year on the board I attended
numerous committee meetings in an effort to become
familiar with CMEECs operations, practice and
organizational culture. In addition to being on the
CMEEC Board, I currently serve on the Legislative
Governance and Audit Standing Committees and on the
recently established Special Committee that Deb
noted earlier.
As way of background I retired from the Town of
Groton, not the City of Groton, the Town of Groton
in August 2017 after 35 years of service, serving as
it’s Town Manger for the last 15 years of my tenure
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from 2002 through 2017. Prior to being appointed to
Town Manager I service at Groton’s Director of
Planning and Development and it with that 35 years
of public sector experience and that of serving on
the CMEEC Board for the last year and participation
on various committees that I provide the following
testimony today.
I would like to note, you know, given my background
I want you to be assured that I am not conflicted in
any way. I fully understand that CMEEC is a public
entity and I think that possibly some folks prior to
me, that was not always the case. They may have
thought it was hybrid agency or maybe even a private
agency.
First, I am optimistic that the current sixteen-
member Board of Directors, twelve of whom were
appointed subsequent to the Kentucky Derby and other
outings, are committed to insuring that the
processes and procedures are firmly in place to
prevent these types of expenditures from occurring
in the future and that the utmost value is provided
to the municipal utilities and their end-users.
Others today have talked about what has already been
done by CMEEC to address these issues and concerns e
from adopting a stricter ethics and conflict of
interest policy to an enhanced travel policy, etc.
Secondly, the additional layer of oversight added by
the proposed audit by the Auditors of Public
Accounts is, in my opinion, unnecessary and
redundant at this time. CMEEC is already mandated
to have an annual financial audit which it posts on
its website and has been subject to a forensic
examination for the prior five years, is subject to
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FOIA, and has Ratepayer Representatives as well as
the Municipal Electric Consumer Advocate
participating in our meetings and activities. It
should be noted that this bill reaches into all
municipalities and requires such things as posting
budgets within 48 hours as well as posting executed
agreements on its websites without the redaction of
trade secrets. I would offer that most
counterparties to these agreements would not be
inclined to provide lower cost goods and services to
municipalities if information such as pricing were
made public.
Third, the provision limiting CMEEC investments to
the purchase of power undermines the whole of
CMEEC’s value creation and is certainly unrelated to
the activities that has generated this controversy.
CMEEC’s ability to own and prudently manage a
variety of assets to offset swings in energy and
transmission costs provides substantial financial
benefit to the individual municipal electric
utilities and their customers. This model has
worked in the past and continues to work for the
benefit of the State of Connecticut consumers. And
I see no reason to dismantle that.
Lastly, I would like to assure the Committee that if
there is a guilty verdict with respect to the
indictments, CMEEC is already bound by its own
bylaws to recoup legal fees and costs. I have heard
nothing that would contradict this statement.
Lastly, I would respectfully request that this
Proposed Bill be rejected. PA17-13 has served CMEEC
the municipal utilities and the ratepayers well.
Allow it to be fully implemented and give it as
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Mayor Hedrick all the time, more runtime before
making additional changes. This is a very, very
complicated industry which I’ve learned over the
last year. We all need to be concerned about
unintended consequences. Thank you.
REP. ARCONTI (109TH): Thank you for your
testimony. Senator Formica.
SENATOR FORMICA (20TH): Thank you, Mr. Chairman.
Hi, Mark. First let me tell you, I know of no person
that I’ve ever worked with in town government that
has greater and higher integrity than you do and it
was a pleasure to work with you when I was First
Selectman of East Lyme and you were Town Manger of
Groton and we served together on the Council of
Government. So delighted that you’re on that CMEEC
Board because you bring something that clearly has
been needed there for some time and I am grateful to
hear that.
Moving forward, you were addressed in your testimony
some of the things that had been of concern the
legal fees and new Board of Directors. Did I hear
your say 12 of 16?
MARK OEFINGER: By my count 12 of 16 Board of
Directors are, have been on the Board after the
Kentucky Derby episodes.
SENATOR FORMICA (20TH): And in terms of the
Executive Director and all of those, has that been
finalized yet or is that still a legal issue?
MARK OEFINGER: It’s still a legal issue. Folks
have been placed on leave without pay and as the
prior individual noted there is a Special Committee
that CMEEC has established which is also doing it’s
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own investigation. That really has nothing to do
with the indictments and so forth. It is a separate
activity above and beyond the indictments.
SENATOR FORMICA (20TH): Okay because I remember
sitting here as a member of this Committee last year
when Chairman Reed called for his remove from there
and he was quite arrogant about the whole situation
and it was pretty disturbing at that point,
cavalierly.
MARK OEFINGER: That individual has been placed on
administrative leave.
SENATOR FORMICA (20TH): So then there is someone
there that is now doing an acting position [Cross-
talking]
MARK OEFINGER: I believe you will hear from him
shortly.
SENATOR FORMICA (20TH): I’m fully aware of the
unintended consequences that would happen if all of
this, you know, fell apart. I really think that
some level of oversight really needs to happen to
make sure that this doesn’t happen again. And I
will relook at this Bill for some of the things that
you brought up in mind because I have great respect
for your ability and your integrity and I am glad
that your are working. Mayor, I’m sorry I wasn’t
here to listen to your testimony so I certainly mean
no disrespect to you. But is there anything that
you may want to add that you haven’t said already?
MARK OEFINGER: Maybe just to reiterate, you know,
certainly bad things happened. And when I first
became aware of them prior to being nominated by the
City of Groton to serve on the Board, I will admit
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based on my 35 years of public sector experience I
had to think, what the heck were these people
thinking of and how could a Board allow this to
happen, not once but a number of times. I am not
sure I’ve gotten 100 percent satisfactory answer to
those thoughts at this point. I think it is fair to
say that not all board members were in the know.
Some were and didn’t feel it was a problem and
hindsight is always 20/20. So I don’t, mistakes
were made and I think people realize that mistakes
were made and, you know, I am concerned of the
unintended consequences. I think CMEEC has done
fantastic work over the years. I first dealt with
CMEEC as a lowly town planner in the Town of Groton
when they used to have their offices located on
Thomas Road and they came in for a potential
expansion. They’ve been around a longtime. The
individuals that work at CMEEC, the worker bees have
an incredible amount of knowledge that I don’t think
could easily be recreated by the individual
utilities or even another organization. So my sense
is we’re better off fixing the problem than to throw
the whole organization out and start over again. I
think there is far more value, far greater upside to
fix the problem and I truly do believe that the
Board has made significant strides in the last year
or so, maybe I can’t speak to prior to that and I
certainly believe that staff leadership understands
the issue and is working hard to correct any past
practices that may still be lingering or not totally
rejected at this point.
SENATOR FORMICA (20TH): Thank you. One last
question, Mr. Chairman. The Auditors of Public
Accounts are named in the Bill and to try to take
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over the auditing on a particular timeframe. We had
a forensic audit, or you had a forensic audit done,
or the organization has a forensic audit done and
those processes are being implemented?
MARK OEFINGER: Correct, I should have maybe noted
in my comments there is not a board meeting that
I’ve been to in the time that I’ve been onboard that
some aspect of corrective measures has not been
discussed or talked about and certainly in some of
the committees. The forensic audit while it was in
this initial legislation took some time to hire them
and to have them do the audit and as I believe was
noted earlier for the last couple of months the
board and staff have been going through the
recommendations and making adjustments, corrections
as necessary. As I think all of you are aware, an
audit it’s a snapshot in time, I mean I’m a big
believer in audits and my negative comment or
comment concerning an additional audit is I think we
would be better off, you know, spending the time to
digest the information that we have before we start
to go off and do another audit by another entity
that may or may not feel compelled that they need to
find something to justify. I don’t believe it’s an
auditor that we would be hiring, this is the State.
SENATOR FORMICA (20TH): The Auditor of Public
Accounts is an agency here that works, you know,
very, very well in a nonpartisan manner and to me
maybe a good answer to this particular issue at
least in the short-term going forward to take
everybody out of the loop down there and brings it
to a new independent agency. So that is the only
thing. I sense from the previous person who
testified and from you that it maybe a bit of
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overkill at this point, but, you know, I tell ya the
just is still out. I think were still angry about
the events of last year with this and about the
arrogance that occurred with all of this. So in the
interest of time, I am sure I can speak with you
offline but I thank you for coming up here today.
Thank you, Mayor for coming up here today and I
appreciate your testimony. I still think we got a
long way to go with this but I appreciate your
testimony and I’m glad you’re on the watch because
like I said before there isn’t anybody better.
Thank you, Mr. Chairman.
REP. ARCONTI (109TH): Thank you, Senator. Thank
you for all your work on this concept. Any other
questions? Seeing none, thanks for your testimony.
Mike Trahan? Following Mike will be Steve Pelton.
MIKE LANE: I have our CMEEC’s General Counsel with
me today to answer some detailed questions if
necessary. Co-Chairs Senator Needleman and
Representative Arconti, Ranking Members Senator
Formica and Representative Ferraro and Distinguished
Members of the Energy and Technology Committee my
name is Mike Lane. I am the Chief Financial Officer
and Interim Chief Executive Office for CMEEC.
I want to assure the committee that we acknowledge
our mistakes. We have learned from our mistakes. We
have taken a number of concrete actions to ensure
proper governance and oversight at CMEEC, and
promote transparency and accountability, consistent
with our public charter.
As a bit of background I spent 26 years in
accounting and finance including many years of
developing and managing internal controls. I’ve also
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managed and directed many accounting and finance
departments of various sizes over the past 18 years.
I joined CMEEC of October of 2016 as Financial
Controller.
I want to assure the committee that we acknowledge
and have learned from our mistakes. We have taken a
number of concrete actions to ensure proper
governance and oversight at CMEEC, and to promote
transparency and accountability. We believe this
Bill would add unnecessary and duplicative costs to
CMEEC and its member utilities. While mistakes have
been made and oversight has not been sufficient we
also want folks to know that we continue to provide
significant value to our customers.
We provide customers with low cost energy to
residential, commercial and industrial end users
including economic drivers to this states, the
United States Navy, Pfizer Electric Boat, Mohegan
Sun, Backus Hospital and the Groton- New London
Airport. Our projects, owing transmission and
generation assets, solar guards and storage serve as
a strategic purpose. They allow us to hedge against
highly volatile energy markets and other costs.
They enhance our renewable portfolio. We are truly
a joint action agency purposed to leverage scale.
We do believe this legislature took appropriate
actions with Public Act 17-73 to ensure that CMEEC
and MEUs operate in open transparent process. We
respectfully ask that you allow us to move forward
under the controls and transparency provisions
contained in Public Act 17-73 and allow the Board
and the leadership to take necessary actions and
give us time under Public Act 17-73 to regain the
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trust of the legislature and the public. Thank you.
I’ll answer any questions you may have at this time.
SENATOR NEEDLEMAN (33RD): Thank you, Mike.
SENATOR FORMICA (20TH): Thank you, Mr. Chairman.
Good afternoon. Thank you for coming, thank you for
your testimony. And thank you for what you’re doing
to kind of right the ship and I understand that. I
have a trouble balancing, you know, going forward
without repercussions, without safeguards that are
sufficient to make sure not that any of you guys are
gonna do this again. I can’t imagine that happening
again. I can’t even imagine the Board of anybody
that is involved that is allowing that to happen.
But I think there’s got to be a clear statement that
is definitely put behind us. I think the current
Public Act is doing that. I kind a like the idea of
the Auditor of Public Accounts because it kinda
brings it up here where we all can take a look for
the next few years but, you know, I’m willin to
consider, you know, other options. But you and I
have spoken outside of this Committee Room and I
know that your intent is good there and I know again
without repeating myself too much is, you know,
unintended consequences sometimes of overreaction.
But I think the public needs to know where we are,
what’s going on and I think the legislature needs to
act decisively and I think that’s where we are.
I want to assure the committee that we acknowledge
our mistakes. We have learned from our mistakes. We
have taken a number of concrete actions to ensure
proper governance and oversight at CMEEC, and
promote transparency and accountability, consistent
with our public charter. I want to assure the
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committee that we acknowledge our mistakes. We have
learned from our mistakes. We have taken a number of
concrete actions to ensure proper governance and
oversight at CMEEC, and promote transparency and
accountability, consistent with our public charter.
MIKE LANE: Just a little bit to that this year in
2019 I will be voluntarily proposing and going out
for RP for an internal control review on our
internal financial controls. So I will be doing
that as well this year.
SENATOR FORMICA (20TH): There was just a comment,
we were talking about further discussion that may
need to occur within the organization of CMEEC and
the legislature with regard to full disclosure of
what’s happening in a forum like this and you know,
that may or may not be part of it. I’ll let the
Representative elaborate if he likes, but, you know,
again I appreciate what you’re doing and I think if,
again the legislature is just having a difficult
time getting over the arrogance of the testimony
that we saw last year. But I thank you for your
service and your intent. Did you want to have
something to say?
ROBIN KITNESS: Yes, I did. I just wanted to clear
up a couple of points that have been made.
SENATOR FORMICA (20TH): Would you do me one favor,
and I know who you are, but will you introduce
yourself for the record?
ROBIN KITNESS: My name is Robin Kitness. I am the
General Counsel of CMEEC. These are just discrete
points. I think there was some question about how
the municipal electric utilities could withdraw from
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membership in CMEEC and there was some discussion
about whether that requires a lawsuit and I just
want you to know that is not accurate. For a member
to withdraw they just need to let us know that they
no longer want to be a member of CMEEC. This issues
that we need to come to terms with is they can’t
withdraw somehow dealing with the existing tax
exempt status that is on the book. In Wallingford’s
case they sent us a letter saying they no longer
wanted to, they were not a member, they no longer
wanted to be a participant, we honored that.
Arbitration we’re involved with right now has, it’s
a contractual matter and has nothing to do with
whether they can leave participation in CMEEC. So I
wanted to clear that up. The other thing I wanted
to talk about was just about the forensic
examination and the process that we got to in
choosing a forensic examination audit firm. The
first set of legislation that came out, 17-73 we
went out for an RFP for the forensic examination.
We got one response. That response was our current
auditor. The legislation was actually, as it was
written, was pretty much unworkable and I worked
with the Electric Consumer Advocate Ellen Katz to
reintroduce the legislation so that we would get a
broader response. So it was, I think it’s a little
unfair to say that there was a conflict of interest
in who we chose the first time around. We tried to
implement that legislation and we received one
response. So I wanted to clear up those two points.
SENATOR FORMICA (20TH): Thank you very much. Were
you going to add something before I yield to the
good Representative? Thank you very much for your
testimony on my behalf. Thank you, Mr. Chairman, if
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you don’t mind I’m turning it over to the good
Representative.
REP. MESKERS (150TH): Thank you very much. I guess
the background information to all of us has been
said multiple times is very disturbing. I hear from
Senator Formica and our questions regarding, you
know, follow through on this level of reporting that
you feel is either onerous or you want time for the
existing legislation to be put in place and a
chance. It begs the question and I’m not sure, this
is my first year on the Committee and my first year
in the House so I would maybe refer to the Chair and
question whether or not either an implementation of
this legislation or whether we’ll consider some kind
of an annual reporting subsequent to the completion
of the forensic exam whether we would have any other
requirements because obviously a follow through from
what you’re hearing sounds like we want a follow
through and in light of that follow through, you
know, we’ve got a law you don’t like and the
question is whether we’ll consider anything else.
MIKE LANE: So we do, we have submitted an Annual
Report and we will do annually, last summer.
REP. MESKERS (150TH): But I’m not sure we’ve seen it
or the details of the forensic report and the
remedies which might be required as well to
understand going forward.
MIKE LANE: We can report that to you, absolutely.
REP. MESKERS (150TH): That would be something
subject to the Committee. I just think made that
suggestion individually.
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ROBIN KITNESS: The Annual Report is sent to the
Committee we could certainly add the progresses made
on adapting the recommendations of the forensic
exam.
SENATOR NEEDLEMAN (33RD): Thank you. Just one
question for my own, what was done was pretty awful
in my opinion but the question came up a while ago
about the impact on ratepayers. The amount of money
that was spent for sort of frivolous unnecessary
expenses was about $1 million dollars over ten
years.
MIKE LANE: Four years.
SENATOR NEEDLEMAN (33RD): And what was the gross
revenue?
MIKE LANE: Our revenues are anywhere between $150-
$250 million dollars.
SENATOR NEEDLEMAN (33RD): So about $800 million
dollars over four years?
MIKE LANE: Yes, sir.
SENATOR NEEDLEMAN (33RD): Okay thank you.
SENATOR FONFARA (1ST): Thank you. I apologize for
not being here for most of the testimony. My
concern here is I feel like the tenor of the
discussion every member is entitled to their
perspective and to have concerns of whatever level
they might but, you know, maybe being here as long
as I have been I can recall when I Chaired this
Committee my Co-Chair wanting every town to be a
municipal electric town, every town she wanted and
put legislation in to make that easier to happen.
That is the history of CMEEC and organizations that
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are municipal electrics in this state. The worm has
certainly turned here and I guess I have to ask you,
the CEO, if you have the perspective of what
happened getting so much attention here, in terms of
what’s in place currently would those things have
been caught?
MIKE LANE: I believe so. I believe with our
transparency and our new transparency for our board
reports that some of the specific line items that
would now be reported in our monthly board package
and our Annual Report to the General Assembly.
Eyebrows would have raised in question.
SENATOR FONFARA (1ST): But short of, that’s in
hindsight, right? That’s a report of but would
things have been prevented. Would there have been
ability under the current system to prevent those
things from taking place in the first place as
opposed to being found out in an audit?
MIKE LANE: Maybe not in a normal audit.
SENATOR FONFARA (1ST): I’m not speaking about an
audit. I’m speaking about the procedures you have
in place approving of activity?
MIKE LANE: Yes. Yes, I’m sorry. Yes so we
instituted an Ethics and Conflict of Interest Policy
and a new enhanced Travel Policy and those items
would be caught in that.
SENATOR FONFARA (1ST): And who gets to see those in
terms of the reports themselves? Are there reports
monthly or annual approval of travel, approval of
any of the things that happened here?
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MIKE LANE: So currently the CFO would approve the
CEO’s expenses and I am going to try to change that
to have an Executive Committee of the Board approve
the CEO’s expenses in this year and other than that.
SENATOR FONFARA (1ST): Does the Municipal Electric
Council see those?
MIKE LANE: If he asked for those, yes those could
be provided to him.
SENATOR FONFARA (1ST): Why does that have to be at
the request as opposed to a requirement?
MIKE LANE: Well currently expense reports and thing
like that are not actually required.
SENATOR FONFARA (1ST): Right, but why would you not
make it to be required that the Consumer Council
sees it?
MIKE LANE: Currently, you know, expense reports and
things like that are not actually required.
SENATOR FONFARA (1ST): Right, but why would you not
make it to be required that the Consumer Council
sees it?
MIKE LANE: I wouldn’t be opposed to it for sure.
SENATOR FONFARA (1ST): Is there anything else that
you foresee that you would institutionalize to give
this Committee comfort? My concern Mr. Chairman is
that we are weighing into an area that has
historically been well run and that we not effect
this, not an experiment, it’s been going on for
many, many years and I think the results are clear
in terms of how many people have compared what
ratepayers are paying and there are other reasons
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for it, some of this legislature has said that the
investor owns must do certain things that we do not
require of the municipals but most people in this
state I think would gladly accept a rate reduction
of some 15 percent or whatever in their electric
bills. So is there anything else that you feel that
could be done that would be able to foreclose any
opportunity for malfeasance or what have you?
MIKE LANE: As I mentioned, maybe just before you
stepped in, I mentioned in this year 2019 I’ll be
going after an RP for a Finance Internal Controllers
Review from an independent sources as well as my
background of 26 years in finance and accounting and
managing internal controls and managing and
directing financial and accounting departments I
believe that level of background and knowledge would
sit well with modernizing our internal controls,
accounting policies, etc.
SENATOR FONFARA (1ST): Great. Thank you. Thank
you, Mr. Chairman.
SENATOR NEEDLEMAN (33RD): Thank you. Anyone have
any other questions? Yep.
REP. LANOUE (45TH): Thank you, Mr. Chairman. Good
afternoon. I also apologize for coming in late, I
missed some of the testimony. There’s a couple
things going on as usual for us. I just want to
make sure I’m crystal clear on the forensic
examination. You said that the way it’s currently
written in PA 17-73 makes it difficult for a lot of
people when you put out the RFP you only got one
request. You think it’s too high of a standard or
the requirements are too strict did I understand
that correctly?
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ROBIN KITNESS: That provision dealing with the
forensic examination was actually amended last year
to make it a workable procedure for us to go out for
RFPs. The existing language is Public Act 17-73
when it was first enacted we only had one response
to our RFP because of the way the legislation was
worded. So I worked with the Municipal Electric
Consumer Advocate and Ellen Katz to redraft the
language which was amended last year. We went out
for an RFP, we had multiple responses and we chose
Tom Resnick.
REP. LANOUE (45TH): Okay what was the criteria how
you ended up choosing one over another? How did you
end up making that decision?
MIKE LANE: With their response they were with the
second RFP that went out in Public Act 18-50. There
were five responses and in selecting Cohn Resnick it
was a combination of their ability to do the
forensic examination and the cost involved. So they
were all very qualified to do the forensic
examination and very highly recognized firms and the
cost was a big factor that they were much less than
the others significantly.
REP. LANOUE (45TH): Okay, thank you.
MIKE LANE: You’re welcome.
SENATOR NEEDLEMAN (33RD): Thank you. Anyone else?
Thank you, folks. Now Mike Trahan followed by Steve
Pelton.
MIKE TRAHAN: Mr. Chairman, Members of the
Committee. My name is Mike Trahan. I am Executive
Director for Solar Connecticut which is the solar
specific state association.
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Our business is installing, designing and developing
residential and commercial solar in the State of
Connecticut. I am going to be the first of four
speakers. I brought with me today three experts to
speak on different part of Bill 7251. There have
been a number of questions I think that have been
posed to some individuals here who may or may not
have had the proper expertise to answer them. The
three gentlemen that are going to follow me have all
the answers so, please ask them the hard questions.
There are 22,00 solar workers in the State of
Connecticut right now. All of them are asking the
same question. What’s the rush? We asked that
question multiple times last year during the debate
on Senate Bill 9. It got us into the position that
we are now and frankly I think that 7251 is
continuing to rush the situation. As far as the
value of solar goes given a value solar six months
to be completed in Connecticut, if that gets done
then we would be the first state in America to get a
value solar study done in that short of a period of
time. Other states are taking upwards of two years.
This Bill never really did have that strong support
that it passed in the State Senate last year on the
night before the last day of the legislative
session. A number of amendments, some courageous
amendments were filed by a member of this Committee
and defended on the floor of the House actually
received a voice vote to overturn pieces of Senate
Bill 9 that we’re back here today asking to be done
again. That’s how weak of a position Senate Bill 9
had last year.
We made some suggestions to the Committee on how to
improve the Bill specifically Section 7 and I think
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there might be some misunderstanding. Those in the
solar industry are not here asking you to overturn
the wholesale change to Senate Bill 9. It is only
Section 7, pieces of Section 7 and you’ll hear in a
few minutes those specific things.
I did want to save the rest of my time, if I could
for some comments that were made earlier by
Commissioner Dykes. She said that cost shift wasn’t
the main driver behind elimination net metering
Connecticut. If it wasn’t cost shift what was it?
It was cost shift. Cost shift was repeated in the
Comprehensive Energy Strategy that DEEP dropped on
this Committee and the legislature 12 months ago,
the phrase cost shift was loaded throughout the
Comprehensive Energy Strategy. It is the reason
we’re here today. If anybody has another reason why
we shouldn’t move away from net metering we would
love to hear it. We hear why it is important to get
the net metering and rushed towards tariffs. People
ask us what’s the best program. What state has the
best program? We’ve got the best program right
here. It is called the RSIP Program. It is the
envy of other installers in other states on the
residential side. On the commercial side ZREC
program we have right now asking sellers and
developers around the country what’s the most,
what’s the best program on the commercial side, they
will say this program right here in Connecticut. Is
it the most lucrative program? It is not. Go to
other states, you’ll make a bigger buck in
Massachusetts if you wanted to. In Connecticut the
Green Back, DEEP and PURA has made developers, made
it very hard and rightly, made it tough on them to
make a buck here. But it’s working and it’s working
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well. After me Senator, Mr. Pelton has left but
we’re gonna hear from Noel Lafayette to speak on the
ZREC Program, Ed Merrick is here from Maryland from
Trinity Solar he is going to speak on how Senate
Bill 9 compares to solar programs in other states
and Stephan Hartmann will speak about battery
storage and net metering. If there’s any questions
I can answer I’d be happy to do so.
SENATOR NEEDLEMAN (33RD): You guys all want to come
up at the same time or do you want to do them
separately?
MIKE TRAHAN: It’s your call.
SENATOR NEEDLEMAN (33RD): No, we’ll do ‘em
separately. Representative Steinberg.
REP. STEINBERG (136TH): Thank you, Mr. Chair and
thank you, Mike for being here today. Getting back
to Commissioner Dyke’s testimony I believe she said
that despite the move away from the existing net
metering program the rate of solar installations
continues at the same pace that it did previously.
Is that your experience?
MIKE TRAHAN: I think the pace of residential solar
installations right now is probably faster than
we’ve ever seen and the main driver behind that is
that the program is supposed to expire in a couple
of months. We’ve got 2,200 solar workers in the
State of Connecticut in residential and commercial
programs that are actually about to be fired in just
a couple of months. How would you like to be a
business owner or work for one of those business
owners knowing in the back of your mind that you
might not have a job in a couple of months and a
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number of those people are here. There’s a fraction
of there are here that have been here throughout the
day but there are 2,200 people working on our
industry and there’s a lot riding on what you all
come up with this year in the Bill.
REP. STEINBERG (136TH): So to your point, the rate
might be at a good rate but that is really
camouflaging the reason behind it which is we’re
reaching affectively an installation cliff if we go
forward with the program as mapped out in SB 9,
Section 7. One of the things we keep hearing is
that is virtually inevitable that every state will
be moving to a tariff regimen at some point or
another. My understanding is states have had uneven
experiences with tariffs. I understand the desire
to help the ratepayer anywhere we can and we are a
high cost of energy state and that’s something to be
taken into account but do we have, from your
perspective, enough experience from other states to
indicate that tariffs are inevitable or indeed the
only effective model for us going forward?
MIKE TRAHAN: Ed Merrick from Trinity Solar works in
multiple states, he can speak to that better than I.
But I’ll tell you this, no one in the solar industry
feels as though that we need to be tied to
incentives forever. We understand that incentives
are gonna go away. The incentive on residential
solar in the State of Connecticut has been reduced
12 times. I’m not sure that everybody understands
that. People think that the incentive has stayed
steady or maybe gotten more lucrative, 12 times over
the last six years or so the incentive of it the
installers get and eventually pass on to homeowners
has been cut 12 times. I don’t know that we need
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to, you look at states like Hawaii and California
and some states in the Southwest where solar
penetration is big. It is well in excess of 10
percent and at that point in time it’s a good reason
to look past net metering because frankly at that
point in time people who have solar on their
rooftops probably are shifting, net shifting costs
to people who don’t. But you don’t get to net cost
shift until you’ve reached 10 percent solar
penetration. In Connecticut were are in sight of
two percent. Solar in Connecticut would have to
increase five-fold before we would need to think
about moving to a tariff, that is not me saying
that, that is the U.S. Department of Energy research
and studies from other states.
REP. STEINBERG (136TH): So to your point,
Connecticut seems to be trying to emulate states
that are many, many years in advance of them in
terms of penetration of solar and maybe there isn’t
any urgency on that score. And I also want to thank
you for your willingness to recognize it.
Eventually we’re gonna have to remove subsidies for
solar in this state and I am 100 percent in favor of
it and I will do it the day we remove subsidies for
fossil fuel exploration in this country as well.
MIKE TRAHAN: I don’t know that we’re looking to
emulate other states, I know for sure we’re looking
to avoid the mistakes that other states have made
and the policies that DEEP has proposed going back
to last year when they tried to force buy all/sell
all on consumers where all the solar you generated
had to go back to the utility that you couldn’t keep
any of it. When DEEP last year came and sat in this
chair and opposed battery storage they changed their
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mind on value solar. Last year in the CES they
opposed value solar. We’re just trying to avoid the
mistakes made in other states so the policies that
DEEP has proposed would take us down that path.
We’ve asked them to give us examples of other states
where these policies have worked. Crickets. We can
tell them multiple states where it hasn’t worked and
we have already.
REP. STEINBERG (136TH): I think you also make a
good point, in the original version of SB-9 that was
submitted to this Committee over a year ago, there
was very selective use of data particularly as
relates to tariffs that in hindsight I found very
misleading and I really think that we are owed by
DEEP a much fairer and evenhanded approach to
comprehensive energy strategy than was reflected in
that expressions in SB-9 and it is incumbent on this
legislature to makeup for what DEEP failed to
provide by getting it right this time. Thank you,
Mike.
MIKE TRAHAN: Had we done value solar six years ago
like you proposed we wouldn’t be in this position,
Representative.
REP. STEINBERG (136TH): I hate being right so often
[Laughter].
SENATOR NEEDLEMAN (33RD): [Laughing] That’s great.
Thank you, Mike. Is there anybody else?
MIKE TRAHAN: Mr. Pelton has left, Senator. So Ed
Merrick, next. Thank you.
ED MERRICK: Mr. Chairman and Members of the
Committee, I apologize I’m a little under the
weather with a cough and cold.
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SENATOR NEEDLEMAN (33RD): Welcome.
ED MERRICK: My name is Ed Merrick, I’m Vice-
President of Trinity Solar. I’ve been with the
company since 2007, been in the solar industry for
this is my 19th year actually.
Trinity Solar is a residential solar installer.
We’ve been operating since 2004. We opened up our
office in 2008 in Connecticut and started our first
installations back in 20008. Today we employ about
300 Connecticut residents. We are installing about
250 systems per month and just to put that in
perspective that’s more in total than we installed
from 2008 through 2013. So this month we will
install 250 systems. We didn’t install that from
2008 to 2013.
So my point in bringing that up is it takes time to
build a business especially the solar business
because it takes time to build the culture and bring
in the right folks but it takes no time to destroy
one. As I look at SB-9 particularly Section 7 I am
not going to comment a lot about that because I’ve
got to deal with what is in front of me which is
House Bill 7251 but you can anticipate where I would
sit on XB-9, Section 7 and my feelings about that.
Just to give you a little sense of similar but
different solar program, I’m going to talk a little
bit about Maryland which I know quite a bit about.
We had an incentive program there that started
falling apart in 2015 and 2016. We also at that
time the legislators decided to do a Value of Solar
Study and they decided not to do anything about the
incentive program. So we are still in that solar
study, it has taken us two years to get there. WE
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had the Public Service Commission come out with
their study and we are still waiting on the final
study from the legislature.
But what that did is that resulted a loss of 1,000
jobs in the state. We went from installing 21,000
systems in one year to what we will do this year is
probably about 5,000.
Compared to Connecticut’s employees, our employees
in Maryland today in Connecticut we have 300
employees in Maryland I have less than 100, probably
about 75. Compared to our 250 installs that we are
doing here in Connecticut we are doing about 40 in
Maryland. And so I anticipate that enacting SB-9 as
it stands today that we are going to lose probably
about 80 to 90 percent of the installs that we’re
doing and at least two-thirds of our employees.
This is a reality. This is what has happened in
Maryland. I am going to be testifying on Friday in
Maryland to try to get an increase in the RPS there
but this is reality. This is what is gonna happen
if we’re stuck with the results of Section 7 in SB-
9.
So I do see an opportunity with HB 7251 in terms of
the Value of Solar Study but it is not going to take
you, not going to take this three, six months. It
is gonna take two years. That has been my
experience across multiple states so unless you want
a very watered down version of value source study
that doesn’t really get to what truly the different
benefits are as well as costs of solar. So I would
recommend you’re looking at a two-year period there
and as far as the 7251 the 100 megawatts is helpful,
it certainly is and gives us a little bit of a
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lifeline to work through the study as well as what
do we replace net metering and where do we go from
there. With that, I’ll submit for questions.
SENATOR NEEDLEMAN (33RD): Thank you. Yep.
REP. GRESKO (121ST): Thank you, Mr. Chair. You
heard the previous speaker hit the 10 percent
threshold as to a level that he felt comfortable
with the State stopping subsidies. You just said
that, I understand that, you know, the cliff is
coming so a lot of people are installing now, 250 a
month. You’re not the only company. At that rate
based on your experience can you give me a ballpark
date that you think Connecticut would even be
approaching 10 percent at this current rate?
ED MERRICK: Ten percent, I’d have to get on my
calculator [Laughter]. It’s gonna be a while.
REP. GRESKO (121ST): Five years?
ED MERRICK: Probably longer than that to be honest.
I’d say longer than that. Ten percent, you know,
the way you do that is you’ve got to come up your
retail sales what is your percent of retail sales
and I can’t put a number on that at the moment but
you’re definitely looking at, I’d say at least five
years if not longer.
REP. GRESKO (121ST): Between five to ten?
ED MERRICK: Probably.
REP. GRESKO (121ST): Thanks. Thank you, Mr. Chair.
SENATOR NEEDLEMAN (33RD): Thank you. Anyone else?
Thank you so much. Noel Lafayette, followed by
Stephan Hartmann.
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NOEL LAFAYETTE: Good to see you all since last
week. How ya been? Okay. A lot of this has
already been said. I’ve been here all morning
listening to some of the testimony and I’ve listened
to some of the questions and overall I’ve been
listening to the tone. I’ll get to this in a minute
but once again I want to point out some of the
things that the Committee does very well. I really
appreciate the penetrating questions and a little
bit of pressure on DEEP to explain their positions
because a lot of the times for those of use who’ve
been in the auditorium had to watch them and PURA
approach things, somethings leave us scratching our
heads. They really do and it appears that this
Committee is losing patience and applying some
gentle constructive pressure and it’s appreciated.
So, I’ll start with that.
I am here to talk about just extending the LREC/ZREC
Program. Most of you know what that is, I don’t
think we have to spend a lot of time. For those of
you that are new to the Committee that is the
program that has really jumpstarted solar. It was
introduced in 2012. It has been a highly successful
program. I am not a fan of Eversource but I have to
commend the group and office that runs that program,
Cristy Broadway and her team are outstanding. It is
fair, it is rationale, it is well designed. There
is no subjectivity. It’s just run perfectly well.
To continue that for the next two years I think is
imperative. One, just watching what our neighbors
have been through. Two is, it works and it thrives
through competitive bidding once a year. The first
year I was in that program for say a 400 kilogram
rooftop ZREC bids were in 80 or 90, they are now
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down to 50. Okay, so the program does what it is
designed to do which is not to pass costs to the
ratepayers. It does it very well. We’ve been
holding about that level because of costs haven’t
come down any further but the program works.
So we should applaud ourselves for it. It was
recognized as a national model when it first came
out. I don’t think we should be so quick to cast it
aside, okay. That being said, that program was
supposed to be a six year program. As we got
towards year six it was extended for two more years,
however with one caveat. The funding went from $8
million dollars, was cut to $4 million dollars that
is when Ms. Weed was Chair. It still maintains that
level and we have seen the consequences.
Last year one percent of solar in comparison of what
was going on in 2012. Let me clarify that. We’ve
installed less solar in the last two years than we
did six years ago because of that simple change. So
we asked you to please restore it to the full amount
of $8 million dollars so we can get back to 2012
levels.
Some of the thing we’re talking about energy prices
and things and there are other things that I know
some of you talk about as we do this and I want to
make this point. Solar is just not about the energy
it is also about economic development and job
creation. And of the things that concerns the solar
community is when we hear Ms. Dykes give her
position is that she always talks about costs. Now
to be fair to Ms. Dykes it is not DEEPs job to
create jobs. Her job is to get as much renewable
energy as cheaply as possible and she is doing a
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good job. But there is a balance, you know, in any
area of life cheapest cost is not always the only
factor and we’ve become very concerned when DEEP and
PURA just talk about cost, cost, that’s all they
talk about. So there is an inherent conflict in our
State Government, we are trying to get our economy
going. We are trying to create green jobs, we’re
trying to build an industry yet the people running
it are only talking about lowest cost. We have to
work that out somehow, okay and that is a big point.
The LNV program works well.
I want to talk about Massachusetts a little bit.
The Smart Program just got launched several months
ago. It took DOER two and a half years to design
that program, two and a half years. They thought it
was going to sustain the solar industry at a nice
measured pace for four years. Eighty percent of it
was sold out in a week, a week, okay, $1.5 billion
dollars of infrastructure investment from the
private sector. So why am I saying that? I am
saying that because a couple of other questions is,
I think Eversource knows that there is this much of
a demand for solar and I think it scare them right
down to their socks. They just saw it in
Massachusetts where they have about a third of the
market, okay. That is why you have a real-time net
daily netting. If you look at the timing of that
introduction by Eversource it was just as
Massachusetts launched it’s first large scale energy
storage project. That idea was to stop energy
storage from every getting a foothold in this state.
That’s why. That’s why. You can hear all this
nifty confusion reasons but when you look at the
timing that is exactly what happened, okay.
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So Massachusetts has gone three programs, ESRIC 1,
1600 megawatts, ESRIC 2 1600 megawatts, Smart 1600
megawatts and it is already sold out. This is the
boom/bust cycle of the solar industry. This is why
companies get funded. They hire 50 people and a
year later lay them off. That is what we’ve all
learned state by state. We know the LREC/ZREC
Program works. We know it’s fair. We know it’s
rationale. We know it’s well run. Let’s extend it
for two more years and take our time to figure this
out.
You know, you guys have a tough job. Half of you are
brand-new to this Committee. You’ve never seen
these complex energy issues before. Be fair to
yourselves. Give yourselves time to figure out.
Don’t rush like we did with SB-9. We learned that
rushing just makes it worse and we spent time on
doing what we did, okay. There is no reason not to
extend this program at full funding for two more
years. It serves everybody. It’s certainty, it
works, everyone understands it. So that being said,
I’m happy to any other questions.
SENATOR NEEDLEMAN (33RD): Thank you.
REP. STEINBERG (136TH): Thank you, Mr. Chair. You
used a highly technical term I would like you to
elaborate on further, in reference to Eversource you
said, they were scared down to their
socks,[Laughter].
NOEL LAFAYETTE: Yeah, highly technical.
REP. STEINBERG (136TH): Would you explain why you
think that they are so concerned about the trend
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that would actually lead to higher penetration of
solar in the State of Connecticut?
NOEL LAFAYETTE: Yes I do. There is two reasons and
I’m gonna give a “Tale of Two Cities.” Right now
everyone is talking about offshore wind and everyone
loves it, the government has embraced it.
Ironically must to many people’s chagrin Eversource
is an investor partner in those projects, which I
question the legality of. They can’t own generation
but they can invest in a generator? That’s
interesting.
Two, because big wind does not upset their business
model, big wind produces wholesale renewable energy,
they buy it just like they do off the ISO, they
distribute it and they mark it up. Pretty simple.
Solar does not work that way at all. Every solar
system that goes up their business model is
challenged. Their business model loses money.
Their, Eversource’s cash cow is peak demand charges.
That is where they make all their money. Solar
takes that entire revenue stream away from them
simply because it is producing the most energy when
they are producing the peak demand. Cost shift, you
know, I’ve heard lot of nifty analogies, some work
some don’t. In August when they fire-up those
peaker plants to meet the air conditioning, if I
turn my air conditioning on the whole grid goes up,
you know, a penny a watt. My two neighbors that
don’t have air conditioning the have a cost shift,
right. They are paying for my air conditioning
because everybody’s peak demand went up for that
particular month. So this cost shift thing is
interesting.
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Another thing I find interesting is that we’ve been
talking about cost shifts for years now and either
the OCC, PURA or DEEP has asked the EDCs, can we see
a quantitative analysis proving that. Every time the
solar industry wants to do something we have to give
a study, we have to give the report, all those
things to prove it. Eversource says it’s a cost
shift, it’s accepted. Not a single report was asked
for and I find that disappointing. Why is that?
I’ll close it up and its seems like a tangent but I
think it is something we all should be aware of.
I’m a lifelong Connecticut resident. I find it
absolutely disturbing that we have one company that
controls 80 percent of the electricity, 65 percent
of the natural gas and now they are buying up huge
chunks of the water, Aquarian Connecticut water. I
don’t know why this legislature is not concerned by
that. That is a tremendous amount of power over our
lives, one company. Where’s the brakes? Where is
that? Am I the only one that thinks that’s a little
crazy? But that’s just me. To answer are you
scared down to their socks because they realize in
Massachusetts that they would lose huge amounts of
market share to solar and the last Smart Program
when it sold out like that, that quickly, more than
anybody, no one saw that coming, they realized
that’s how much the public wants to go solar. And
they don’t like it.
REP. STEINBERG (136TH): Thank you for that answer
and also answers what I would pose as my second
question which is why there hasn’t been regular
enthusiasm for storage and the same basic argument
occurs. If your margin is in peak, you don’t want
to necessarily level it out by having storage
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available during those peak hours. So seems to me
that the kicker in this conversation is not merely
solar installation but the importance, and there are
procurements at the very least, projects that
include grid scale solar and a lot more projects
that involve storage as well. That is another
missed opportunity in this State and thank you for
highlighting it.
NOEL LAFAYETTE: And just to finalize that point,
when your energy comprehension strategy came out a
couple of years ago, storage was not mentioned once.
I don’t know how energy professionals can make a
five-year plan and in today’s age and not mention
energy storage until it was forced upon them.
REP. STEINBERG (136TH): I think that is
interesting. Thank you, Mr. Chair.
SENATOR NEEDLEMAN (33RD): Thank you.
Representative Meskers.
REP. MESKERS (150TH): Thank you. I would repeat
and emphasize that last comment. I think it is
important for us as a legislature and the public to
understand that solar, I’m definitely in support of
solar, I am not antisolar, the key component for the
entire grid and the key component for the residents
is that we solve the solution of storage so that, I
repeated in three meetings, the issue of having peak
generating capacity and not having storage in solar
doesn’t get us off the hook in paying for assets
that actually only produce at peak hours. So it is
important that we lower that with the proper
strategy on storage. So I don’t know that we have
one yet, but you can count on me that in conjunction
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with solar that I’ll be pushing to see that it
happens.
NOEL LAFAYETTE: Yeah if I can comment to that?
What we saw off the ice on New England reports of
this last summer, that their peak summer demand was
greatly flattened by the solar, by the 3,000
megawatts of solar there. None of that was stored
so it does work by itself but to your point storage
would give us an even greater control and it doesn’t
make sense not to have it our plans but we don’t
have to have them both worked out perfectly yet but
it’s just flat out better.
REP. MESKERS (150TH): Thank you very much Thank
you, Mr. Chairman.
SENATOR NEEDLEMAN (33RD): Thank you. Senator
Fonfara.
SENATOR FONFARA (1ST): Thank you, Mr. Chairman.
Briefly just for a point of clarification when you
said earlier that it is not the job of the DEEP
Commissioner, it is her job, she works for a
Governor who say’s you have to balance all of these
obligations. You are not going to have a
Commissioner that goes off and does one thing and
another Commissioner goes off and does another
thing, they all work for whoever the Governor is and
that is part of her responsibility or any DEEP
Commissioner to worry about jobs as well as cost and
this Committee has historically been focused on
electric costs. Sometimes too much in my opinion
but it has been historically focused on electric
costs and so part of what you hear from your side,
your business, you don’t think about the cost, you
think about running your business. But a
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Commissioner of DEEP and others have to worry about
all of that because they work for someone who has to
worry about all that.
NOEL LAFAYETTE: And I appreciate that point. I
just want to make a point is just, I think all of us
as adults, anybody who owns a home or owns a car,
lowest cost is what you shoot for but it is not
always the best value, so I just keep that in mind.
It just concerns when I hear Ellen Katz speak, when
I hear Mr. Klee speak before Ms. Dykes, I have a lot
of respect for Ms. Dykes, very highly intelligent,
well-informed woman, wonderful professional but what
we’re seeing over time is, I’m gonna call it the
death by a thousand cuts, death by a thousand cuts,
I could give you six examples where the EDCs are
putting forward tiny little things that nobody
notices, or doesn’t believe that is related to solar
or renewable future and only after PURA ratifies it
do we realize there is a problem but it’s usually
small. I’ll give you a case in point. Rate 30 is
one of our electric rate classes, 60 percent of
Connecticut businesses are in this rate class.
Three or four years ago they stuck a fixed demand
charge in there by PURA, three cents, can’t move it.
Now when I approach a public school and they’re in a
different rate class, they are buying power for 16
cents, I build the solar I can sell them power for
11 cents, they save 30 percent, they are very happy,
easy. When a business is a rate 30 class there is
three cents there that I can’t play with to make the
deal work, that’s fixed okay. So the savings just
aren’t there and that is one of the big reasons
solar has slowed down. Now when the EDCs put that
rate 30 class to PURA to fix that, solar wasn’t even
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in the conversation. They had all these other
reasons that they did it. PURA was told by the
solar community if you do this, you’re gonna slow
down solar, too many businesses are in that rate
class they heard us but they did it anyway. We are
still feeling the effects of that, still. Okay?
Two out of five businesses I visit are in that rate
class, there’s nothing to be done there because the
savings just aren’t there. Okay, that’s one of a
million little cuts. That is what we have to,
that’s why we tend to be. There is a perception
that DEEP and PURA are not as objective as they need
to be, there is a perception of that.
SENATOR NEEDLEMAN (33RD): I want to thank you. You
have to say that everybody who has spoken about this
subject is quite passionate and that speaks to me
about the fact that there are jobs on the line here
and there is a movement to do something good in the
State of Connecticut that we need to make sure
continues to happen. It has been suggested to me
that I be somewhat circumspect about my personal
opinion as the Chairman of the Committee but I will
tell you that I don’t believe that bigger is always
better and we, I do believe that there are companies
that seek to control whole markets because bottom
line is profit and controlling gives them an
opportunity to make more profit. I’m not sure that
should be the role of a public utility.
NOEL LAFAYTETTE: Well I’ll say this personal as
Noel Lafayette not as Solar Connecticut, the passion
is frustration and I’ll admit it, some anger because
when you hear these arguments put forward over time,
you come to realize that half of them are absolutely
arbitrary and fabricated. They are arbitrary and
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fabricated. There was no reason to have a 25
megawatt cap for communities solar, absolutely none.
Who made that number? Who said four megawatts is
the limit? Who said all this stuff? It is
arbitrary and after 13 years in this state doing
this, fighting for my survival I’m running out of
patience.
SENATOR NEEDLEMAN (33RD): Well, I appreciate that
and as you said, I appreciate your forbearance with
those of us that are new here but we will come up to
speed and I am convinced that we are going to do the
right thing here, so thank you.
NOEL LAFAYETTE: Thank you, Mr. Chairman.
SENATOR NEEDLEMAN (33RD): Stephan Hartmann followed
by Mike Sopchak, I think I got that right.
STEPHAN HARTMANN: Hello, my name is Stephan
Hartmann and I am Manager of Business Development at
Ross Solar. We are a Danbury based C&I, commercial,
industrial and residential solar design installation
firm. I am also a Connecticut resident and a 10-
year solar industry solar professional in
Connecticut as well with a lot of experience in
Massachusetts, New York, New Jersey even all the way
down into Pennsylvania and Long Island as well where
these markets can vary quite a bit.
I will just open by saying that my role as a manger
in charge of a lot of hiring and staffing within our
company and managing a lot of our business
development we are actively recruiting managers,
this isn’t a job recruitment statement, but it’s
more for perspective. We are actively looking to
expand into, more into Massachusetts and into New
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York because from a business standpoint we are
seeing Connecticut as a diminishing value for the
company.
So just to talk briefly about bottom line there and
where our attention needs to go. I personally live
in Connecticut, I want to see the market, I want to
see our company continue to commit to Connecticut
but that is getting harder and harder to do as Noel,
I think eloquently put it, “Death by a thousand
cuts.” So I just wanted to open up a little bit by
reiterating a couple of the points he made. First
is on the peak demand with the air conditioners, I
think it is important under our value of solar study
to understand that solar is directly offsetting
those peak demands at that value and that analysis,
the data that’s behind it, it has been aggregated by
in a large degree by the Connecticut Green Bank.
The Comprehensive Energy Strategy did not have, in
my opinion, a comprehensive analysis that went into
some of these conclusions are cost shifts because
data from the Green Bank was flat out rejected in
that analysis and some of the subsequent requests
for information. So just very curious all this data
exists yet it is not necessarily being leveraged
into decision making.
So in general I support the items in this Bill 7251
but I want to echo the sentiment that more time is
needed and a little bit more of a dedication to a
Value of Solar Study that could look to those surge
benefits as well as any other values that solar
brings to the table and we constructed to find what
those values might be in that analysis.
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I just want to talk a little bit more about net
metering. There was a question posed earlier about
well what do we need, what should the incentive
structure look like and it sounds like old hat to
say more net metering, more net metering but in
reality net metering is meant to be kind of when
you’re filling a bucket up with water, you start by
really just pouring it in, there is a big appetite
and a big carveout where in this case the net
metering can provide help to the grid and help with
some of the peak demand challenges and really to get
the industry jump started. You start by really
pouring in that water to fill up the bucket but it’s
not till it starts to get full where you start
tapering it back and you want to make sure you don’t
overflow that bucket. That is what we’re talking
about when we talk about the penetration being a
one-and a half or two percent where we’re at now and
net metering not being a challenge until ten
percent. Net metering just hasn’t simply run its
course yet in Connecticut. So what we’re asking for
is an extension of the programs that would then
protect net metering a little bit longer to do a
Value of Solar Study and I will reiterate that we
can understand that when the bucket is full a new
program that is designed around the needs of the
grid at that time should be designed and rolled out.
Hawaii for example you can’t import/export any power
at all, it all has to be domestically consumed and
there’s a lot of batteries going in there.
My last point since I’m out of time, is that the
first Comprehensive Energy Strategy and the first
draft of Senate Bill 9 was exclusively buy all/sell
all and had no options for self-consumption and it
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locked out all battery technology. It was the solar
industry that raised this here, in this room,
because we were so boxed into the corner with all
this information coming out in such a short period
of time and so all the excitement and all the talk
I’ve been hearing sitting here in the chair is about
energy storage was very under appreciated only a
year ago with the slogan I kept hearing was,
“Batteries are not ready for primetime.” And here
at our own company we are installing dozens of
batteries all the time. We are doing commercial
scale batteries, we are actually paying people for
space on their roof or space on their parking lot in
other states, that is a program we can’t do in
Connecticut and we were almost shut out in
perpetuity because of what Senate Bill 9 would have
done. So there were a lot of last minute changes.
We protected at least some options for self-
consumption. Unfortunately another question was
asked was why the real-time netting and that’s
because I think a decision was made that they really
wanted buy all/sell all so by putting real time
netting into the Statute this will make the self-
consumption less viable because it will essentially
require batteries which are admittedly a little bit
on the expensive side but it is coming down quickly.
So I just wanted to touch on that as well. So the
value of solar, the map is missing, the conclusions
are there and I think it is really important that we
give it the due time to make sure we can let the
data reveal to us what the next program should be
not just take a survey and with that I would be glad
to take any questions.
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SENATOR NEEDLEMAN (33RD): Thank you. Anybody? No.
I just want to say that to me as a layman coming
into this solar without batteries is not a complete
system, I think you absolutely need it and we need
to do what we can do to make sure that they become a
critical part of the equation. Anybody else with
anything. Thank you. Next on is Mike Sopchak. I’m
assuming I got close on that name? Okay.
MIKE SOPCHAK: My name is Mike Sopchak and I am a
volunteer with AARP.
AARP is a nonpartisan, social mission organization
with an age 50+ membership of nearly 38 million
nationwide, and nearly 600,000 members here in
Connecticut. AARP supports livable communities for
all ages, aging in place initiates and financial
opportunity and resiliency for everyone as they
work, age and retire. We are before the General
Assembly every year on a multitude of bills that
support these issues.
AARP supports H.B. 7152, “AN ACT ACCELERATING THE
DEPLOYMENT OF 5G WIRELESS FACILITIES,” because the
Bill would establish a transparent and informed
process for overseeing the siting of 5G equipment in
Connecticut.
As Connecticut transitions to fifth generation
cellular networks (“5G”), carriers will be deploying
different hardware from the equipment they now use
to deliver wireless signals. With 5G, they will
need to deploy smaller equipment, often on
streetlights or utility poles, some estimate at an
average of 500 feet apart. The placement of these
many small facilities throughout the state,
especially in urban areas where the initial roll-out
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is expected to occur should happen in a thoughtful
manner. AARP supports well-informed transparent
processes that guide the reasonable deployment of
these new facilities, especially where public land
and property is concerned.
H.B. 7152 provides a well-reasoned blueprint for
such a process, appropriately balancing the state’s
interest in cutting-edge technology with the state’s
interest in protecting public safety and aesthetics.
It is fitting and appropriate that the state guide
the placement of these facilities. The Bill creates
a process by which the 5G Council will review
wireless carriers’ requests “for the use of state
real properties for the placement, construction,
maintenance and operation of personal wireless
service facilities and small wireless facilities”
and provides a process for affected state agencies
to comment on such placement. In light of the
substantial value to wireless carriers of being able
to place their equipment on public lands and the
impact on the public interest of such placement, it
is entirely appropriate that the state ensure that
it occurs in a manner consistent with the public
interest, public aesthetics, and public welfare.
The Bill would ensure that the deployment of
potentially hundreds of new facilities does not
happen haphazardly. 5G technology will bring faster
wireless service and improve latency which in turn
will enhance not only entertainment (allowing one to
download movies within seconds), but also will
support advanced applications supporting medicine
and other fields that rely on high-speed
connections. Thank you.
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SENATOR NEEDLEMAN (33RD): Well that was absolutely
perfect timing [Applause and laughter]. I say,
“touchdown.” Have any comments? Thank you so much
for coming.
MIKE SOPCHAK: You’re welcome.
SENATOR NEEDLEMAN (33RD): Steve Cowell. I like
that smiley face on here, that’s great.
STEVE COWELL: Been here all day.
SENATOR NEEDLEMAN (33RD): And you’re still smiling.
STEVE COWELL: I’m still smiling. I must admit I
was not ready for the difficult back and forth on
the CMEEC issues but you know, there are some really
difficulty questions we have to grapple with and we
just have to keep going and keep figuring it out.
I am here to talk about, I represent really two
organizations today, one is my own non-profit, E-For
the Future. I was here a week ago. The four E’s
are energy, economy, equity and environment. Those
are the four E’s we represent. We were called CSG,
Conservation Services Group. This is now my 40th
year doing energy efficiency and my 23rd year
working on solar. So I didn’t have gray hair when I
started, that’s for sure but I have it now.
Okay, very quickly I want to run through some Bills
and maybe I want to start with one issue that I want
to take with, not the previous speaker, but the one
before on the issue of the role of the utility and
particularly Eversource. The fact is that
Eversource is a wires company, if there is lower
sale of electricity they are not hurt because the
structure that was put in place in 1988-1989 of
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decoupling and performance based rate basically
takes the utilities profits out of their sale of
power. And that is important because what it means
it’s much easier to work with them in a way that
creates a set of goals and rates based on achieving
those goals rather than just selling electricity,
right? And I am proud to say I was involved in
designing that system in 1988 and 1989 here in
Connecticut and around the region. So that is
important. I don’t want to throw rocks at anything.
Number one, I want to support 7151 which is, I’m
jumping to the appliances Bill. Almost exact
similar legislation is being heard in Massachusetts
and one thing that’s clear and important is having
as much consistency between stated based appliance
standards so that industry is not looking at one
thing here and something different there and
something different there but they can look at a
consistent block of sales for a set of appliances
that meet a certain set of standards. So looking at
modeling after California and with Massachusetts and
Connecticut and Vermont all doing it, that creates a
good base of working together so they are virtually
identical and there is a good team of folks who are
working here to make sure that happens. So that’s
one that’s critical.
Second one, I support Act 959 around the Green Bank
because I think it is important. Green Bank does
some great things in terms of helping facilitate
resources getting into the state and I think getting
opportunities to pull more federal resources in
would be really exceptionally positive.
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Third, I want to raise the issue of costs versus
rates. It seems like that raises constantly, higher
costs, higher costs. The fact is that particularly
with energy efficiency using less, even if you have
a five percent higher rate the result is you have a
20 percent lower cost, you’re way ahead of the game,
right and that is what’s happening if you have
aggressive good energy efficiency efforts.
Third, in 7272 I would not support limited, reducing
the commercial industrial allocation to the
additional rates because they get the benefit from
that and we don’t want the residential ratepayers
subsidizing commercial. It ought to be equal,
everyone ought to be paying their fair share and
getting their fair share of resources.
Jobs, I won’t go into that, it’s critical. Energy
efficiency we put out a jobs report on energy
efficiency which was included in the Lamont
Transition Document of the 34,000 energy efficiency
jobs by congressional districts in the State of
Connecticut and every congressional district in
America.
Okay I want to talk about the value of solar because
that is something that really seems to be, you know,
rolling in everyone’s thoughts these days and we
work around the country. We have worked in almost
all the states on this issue of how to value
distributed resources. We did our first manual on
energy efficiency, that is being used, that
framework and that manual is being used by DEEP to
prepare for it’s analysis and we will be working
with them to work on that. Just one example which
is, right now, there is a cost shift which is the
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people putting solar are shifting benefit, are
paying for benefits for their neighbors, right. The
shift is from the uses of solar to the benefit of
the users of non-solar. Why, because if you put
solar on your roof you’re creating electrons. If
you’re not using them yourself they go to your
neighbor, right. No cost of generation, no cost of
transmission, virtually no cost of distribution but
they are being paid for as if those costs were
there, so they’re in a sense subsidizing and the
other challenge with the value of not just solar but
all distributed low carbon resources, what is the
value of eliminating carbon. There is huge debate
over that question. What is the cost of climate
change, right, overtime? And that is being debated
and one of the values of solar and efficiency is
reducing or eliminating carbon from our environment.
That is something that we have to put in the value
proposition and in the equation and it’s somewhat
being struggled with around the country in how to
put the dollars number on that. So we are working
very closely and very.
SENATOR NEEDLEMAN (33RD): Can we sort of summarize?
STEVE COWELL: I’m almost there. We are also
supporting obviously 7715 to extend net metering and
lastly while it’s not being heard today, the Bill
5030 on the diversions. It’s something that is
critical as well to the industry to keep going and I
know I respect and appreciate Governor Lamott’s
clear statement that no more diversion should be
carried out but we need to also stop some or all of
the diversion that is going to happen in July.
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SENATOR NEEDLEMAN (33RD): Thank you. Anybody have
any questions? Really appreciate your time. Paul
Yatcko. Welcome.
PAUL YATCKO: Members of the Committee, good
afternoon. My name is Paul Yatcko I am the General
Manger and CEO of South Norwalk Electric and Water,
also known as SNEW and we appreciate the opportunity
to be heard on Senate Bill 961.
SNEW is one of the smaller members of CMEEC and
purchases 100 percent of its electric power
requirement from it under the member’s agreement and
as a member of CMEEC our customers derive
considerable value from that relationship as our
costs from electric energy are perhaps as much as 20
percent as they otherwise be. This translates into
a saving for SNEW customers of about $2 million
dollars annually.
And while my written testimony deals with a number
of items, I would like to leave you with only two
thoughts this afternoon on a very local level.
First, Bill 961 has the potential to raise SNEW’s
cost of electric energy and will do economic harm to
my customers and why is that.
CMEEC creates value in three ways. First, it allows
us to be part of a bigger buying pool and creates
economies of scale that we can’t achieve by ourself.
Second, CMEEC has expertise and systems that enable
it to effectively participate in the New England
power marketplace and third, it invests in
generation and transition projects which give CMEEC
a physical hedge and create an income stream for the
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project participants and that income provides a
significant offset to the members power costs.
The proposed Bill would prohibit CMEEC from
investing in projects, thus depriving its members of
the associated income stream. The estimated value
of that income in 2018 was perhaps $10 to $15
million dollars and the value to SNEW and its 6,500
customers at current levels is about $1 million
dollars annually, which is over 10 percent of our
annual power cost. In addition to driving up the
cost of power to my customers, the legislation could
conceivably require CMEEC to divest its entire
portfolio of bulk power projects and unwinding the
existing portfolio will likely result in significant
“breakage costs” which would have to be borne by our
customers and the customers of all the other MEUs.
While the actual cost of such divestiture is
unknown, the only beneficiaries of such divestiture
will be lawyers, investment bankers, and power
developers and if any of those groups are in this
room I apologize to them.
Second thought I would like to leave you with is
that in its attempt to address clearly questionable
spending at CMEEC the Bill imposes corrective
regulations not only on CMEEC but on SNEW and all
the other member utilities. And despite the fact
that SNEW personnel had no part in the questionable
spending. It is very important to note that no
offices or employees of SNEW, nor commissioners of
the Second Taxing District of which we are an
instrumentality attended any of the Kentucky Derby
retreats, the Greenbriar trips or have been
associated with questionable spending. No officers
or employees of SNEW have been indicted or accused
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of any wrongdoing and we strongly object to being,
in effect, regulated for actions that we did not
commit.
ON behalf of our 6,500 customers we ask you to
reject this Bill and thank you and I will answer any
questions.
SENATOR NEEDLEMAN (33RD): Thank you so much.
Anybody have any questions. Appreciate your time.
Claire Coleman followed by Christopher Phelps.
CLAIRE COLEMAN: Good afternoon
SENATOR NEEDLEMAN (33RD): Good afternoon.
CLAIRE COLEMAN: And Members of the Committee.
Thanks for the opportunity to testify today. And
thank you for brining to the public the opportunity
to talk about key issues, clean renewable energy and
energy efficiency. These are really the pillars of
our clean energy economy and we appreciate your
efforts to make sure that you receive input from the
public on various proposals. I have provided
written testimony on five different Bills. I’m just
gonna give you some quick highlights.
I am testifying in support of HB 7115 raising the
cap on virtual net metering. This is a win-win
situation saving our municipalities money while
reducing our greenhouse gas emissions and helping
tackle climate change. We’re very please to see
that Bill raised by this Committee.
I am also supporting, Connecticut Fund for the
Environment is supporting HB 7151 the updated energy
efficiency and water efficiency standards for
appliances.
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CFE is also opposing HB 7252 which would limit
commercial and industrial customers contributions to
the state’s award winning energy efficiency
programs. I’ve put some documentation in my
testimony regarding the enormous financial and
energy savings benefits of commercial and industrial
customers so it seems only fair to contribute
equally to those programs when receiving enormous
benefits back.
Most importantly I am here to testify on HB 7251
which you’ve heard a lot of really thoughtful
testimony and I really appreciate hearing the
questions of this Committee on when talking about
the future of distributed generation solar here in
this state. CFE does support several of the
concepts put forward in 7251 particularly the RSIP
extension.
In addition to the benefits you heard talked about
today I did want to highlight the value that this
program brings to increasing solar parity across
race, ethic and income groups, the Green Bank only
since 2015 has really focused on LMI and minority
populations and we really just started seeing the
benefits in solar deployment uptick in these
communities and I’d say it is too early to pull out
the rug and would continue supporting that 100
megawatt extension.
We also support a Value of Solar Study, Connecticut
Funds for the Environment has been one of the
environmental groups asking this legislature for
that Value of Solar Study for a longtime prior to my
joining the organization. We do think that it is
key that the Value of Solar Study is linked to
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ensuring better solar net metering and solar tariff
policies. I think a lot of the discussion today,
we’ve heard the acknowledgement of the technical
challenges with some of the restrictive provisions
in Section 7 of SB-9. Those technical issues cannot
just be fixed by delaying the elimination of those
programs. We need to look back at the substantive
language in the Statues and make sure that PURA is
given much more discretion. I’m happy to answer
questions on that. But having a Value of Solar
Study when we’ve also got this clock ticking to have
the elimination of our current programs doesn’t
help. We need the Committee to look at linking
those to make sure we’re informing our the
evaluation of what types of future successor
programs are necessary.
Finally I just ask the Committee, Section 7 of SB-9
was a comprehensive deployment of different solar
programs, one of those was the shared solar program
which Connecticut Funds for the Environment
supported and was really glad that the legislature
was willing to adopt a statewide program but we
would liked it have been bigger and feel that there
is some technical language in there that may prevent
the success of some of the deployment so we’d love
to work with the Committee on making sure we can add
some technical fixes there as well to make sure that
we can rollout a successful program. Thanks for
listening, I’d be happy to answer questions.
SENATOR NEEDLEMAN (33RD): Thank you, Claire.
Anybody have any questions? Thank you. Chris
Phelps.
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CHRISTOPHER PHELPS: Thank you, Senator and Members
of the Committee. I’m Chris Phelps, State Director
of Environment Connecticut. We’ve submitted
testimony on HB 7151 and 7251. You have my written
testimony. I’ll summarize some comments.
First, regarding 7151 AN ACT CONCERNING ENERGY
EFFICIENCY STANDARDS, we strongly support this bill
and applaud Governor Malloy and DEEP for introducing
it. We speak to some of the reason why we support
the Bill in our testimony but I will highlight one.
I know there are some folks that come after me who
can speak even more detail about this Bill. But the
product standards contained in this proposed
legislation are estimated to save Connecticut
consumers $80 million dollars a year by 2025 on
their energy bills. That is a real tangible
economic benefit to our state with absolutely no
pain attached to it. So it’s a no brainer of a Bill
to pass just on that basis alone. It also has
environmental benefits too which our organization
does care about.
But what I want to focus the rest of my comments on
is 7251. Again I provided more detailed written
comments, we provided some specific thoughts on this
Bill. We don’t support it in tis current form
because we don’t feel, as has been discussed earlier
today, it doesn’t address the problem that this
state faces and, you know, I’ve been working on this
issue solar power in Connecticut for over a decade
now. Ten years ago folks who were in the building
then now, or might remember, that the solar industry
in Connecticut barely existed. There were maybe a
couple of hundred jobs in the state. Solar
installers were leaving Connecticut for fertile
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grounds to places like Massachusetts and New Jersey.
They were going gangbusters there. They were
building solar power, creating job, benefiting the
environment and the economy in those states and we
were getting left behind. After three years of
effort by this Committee and the Legislature
legislation to fix that problem in Connecticut was
enacted as Public Act 11-80.
And over the last eight years, we’ve seen the
tangible results of that. We’ve seen about a
tenfold increase in solar jobs here in Connecticut.
Hundreds and hundreds of megawatts of solar power
built in our state based on those policies that were
enacted about eight years ago. And that mirrors
what’s been going on nationwide. I heard on the
radio on my way in this morning something I’d
forgotten that’s a fact, the number one job, the
fastest growing job in American today is solar
powers dollar. Unfortunately Public Act 18-50,
Senate Bill 9 from last year threatens to slam the
breaks on the progress we’ve made in Connecticut
both in growing jobs in the solar industry, getting
more solar power online and meeting our
environmental goals that are so important that way
and it does that as a number of people spoke to
earlier, by simply taking Connecticut and taking us
down the path when it comes to elimination of net
metering replacement with by all/sell all related
types of tariffs that you’ve heard talked about
taking us down that path, that’s already been
traveled, by states like Maine, Nevada and Utah. In
each of those states when they did that as you heard
already, the solar industry went off a cliff. Jobs
were lost by the hundreds and thousands and solar
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installations dried up. That is not the future I
hope anyone in this room wants to see for
Connecticut and therefor as out testimony speaks to
and others have spoken to, we need to fix that Bill
from last year to put a pause on implementation that
rushed down that pathway towards that cliff and give
our state a chance to actually move forward with
sensible solar power policy. I heard the timer go
off, it’s been a long day. I’ll stop there. But I
would be happy to answer any questions you might
have.
SENATOR NEEDLEMAN (33RD): Thank you Chris. Anybody
have any questions? We’re getting worn down.
CHRISTOPHER PHELPS: Thank you, Senator.
SENATOR NEEDLEMAN (33RD): Thank you. Mary Ann
DiMascio. Welcome.
MARY ANN DIMASCIO. Thank you. Chair Needleman and
members of the Committee. I am sitting here
thinking if there were endurance awards this group
here would get it for being here this long day. My
name is Mary Ann DiMascio and I am here to speak
about Bill HB 7151 concerning the appliance
efficiency standards and I work at the Appliance
Standards Awareness Project and we are the group
that did the research that forms the basis for this
Bill so I am happy to answer any technical
questions.
We have done the analysis, we had a repot in 2017
which we updated in 2019 so I know there are a bunch
of questions this morning I could elaborate on if
there is any further questions.
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I want to make just five quick key points and Chris
who was just up here, indicated that the Bill would
save energy, save water, good for also saving
reducing CO2 emissions and the $80 million dollars
in utility bill savings is an annual amount which
will grow as more people by the more efficient
products. I did want to add from one of the
questions today that all these products are on the
market already. It’s not like this Bill will say
well the manufactures will have to go out and get
new products. So all the products in the Bill have
about 50 percent market share already except for one
product has 27 percent. So when you go out all
these products are already on the store shelves so
manufactures are not having to introduce new
products.
Standards we like to say are the best climate and
energy policy you’ve never heard of. It’s kind of a
quite policy because it doesn’t require a lot of
activity to implement it, it just changes what can
be sold in the state but it has really big impact.
Connecticut consumers, if we’re looking at national
standards they save about $648 dollars a year
because of national standards so this Bill would
actually add onto those savings of the state
standards.
Also Connecticut has played a role historically in
2004, 2007 they set standards that eventually became
national standards that lead to massive savings in
this room like the exit signs behind me, the
lighting, the whatever is heating this room or
cooling this room, those all have efficiency
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standards around the country. These have very big
savings that Connecticut is garnering also.
So anyways Connecticut has played a key role
historically and can update these standards at keep
track with the newer standards and the savings and
then as part of a regional effort, I work nationally
with these standards, we have about 11 states that
are filing bills this year that I can’t say they are
all identical, some might have one or a couple of
products slightly different but the standards are
all the same and the states in the Northeast, Maine,
Massachusetts, Pennsylvania, Rhode Island and New
York have either filed a bill or plan to file a
bill.
Finally I would say they are very low-cost effective
ways to achieve the states goals and I’m happy to
answer any other questions.
REP. ARCONTI (109TH): Thank you. Thank you for
your testimony. Any questions from Committee
members? Seeing none, thanks so much. Pat
McDonnell.
PAT MC DONNELL: Good afternoon, Representative
Arconti and Senator Needleman, I’m Pat McDonnell,
Vice President of Regulatory Affairs for UIL
Holdings Corporation. With me today is Jane Lano,
she’s the Manger of our Conservation Management
Group.
I am going to speak today about House Bill 7251 and
House Bill 7115 and Ms. Lano is going to speak about
House Bill 7252.
So we support BH 7251 as well as 7115. Public Act
18-50 last year did some very important work but the
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time frames within which to implement that are very
tight and we feel that it is very important that we
extend the current structure so there is adequate
time for us to get it right. No one wants to
terminate the solar industry in Connecticut, there
is a lot of anxiety from the solar installers
because there is a lot of uncertainty because many
of the details have not been flushed out yet. So
these Bills allow us to do that.
We would encourage you to reduce the quantities.
Residential solar runs about 50 megawatts a year
rather than raising to 100 I would recommend you
raise it 50 and you can always revisit it next year
if we haven’t made sufficient progress and also I
would leave DEEP to determine who should do the
Study of Value of Solar so they can get an unbiased
opinion.
As far as some of the comments today that utilities
are trying to kill the solar industry and we’re bad
guys and we want to do horrible things, that is
completely untrue. Utilities are agnostic in terms
of whether or not a customer gets their power from
solar installation or traditional generator. We are
made whole through the rate making process. I think
what we think about is a way forward to a future
where there’s not caps and subsidies and tariffs but
there is ways of market mechanisms where customers
can select their provider and they can buy from a
third party that has solar power that maybe is
generated down the street. Much like we have Uber
today we never had Uber in the past and you can do
these transactions. I see a future that’s how we’re
gonna do the solar for work.
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And we also need to make sure that we send the right
time signals and vocational signals to solar
developers so they put the solar in the right places
and we can allow for things like battery storage to
shift the generation from what it might be the
sunniest to when we need the power the most.
Lastly but not least we heard a lot today about the
subsidy. There is no subsidy and unfortunately I
did not bring copies but I do have a copy of the
cost shift. Every year we are required by PURA to
file under Docket 15-09 (03) a list of cost
subsidization broken out my month, by the various
rate classes that the netting doesn’t cause that
customer to, those customers to pay and for UI for
2018 it was for all Class 1 solar as well as fuel
cells it was a little over $13,000 million dollars
for 2018 and that subsidy continues on at the time.
That subsidy doesn’t come from the utility, that
subsidy comes from other customers who then have to
make up for that contribution that wasn’t made by
that netting that occurs. So, I’m gonna turn over
to Ms. Lano and I’ll be happy to answer any
questions you have.
JANE LANO: I am here to talk to talk on House Bill
7252 AN ACT CONCERNING THE CONSERVATION ADJUSTMENT
MECHANISM AND COMMERCIAL AND INDUSTRIAL CUSTOMERS.
So I am the Manger for Conservation and Load
Management. I have responsibility for design and
delivery for all of our energy efficiency and demand
response programs that are predominately funded by
the Conservation Adjustment Mechanism.
So when we were looking at this Bill’s concept we
really understand it as an economic development
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concept for large commercial and industrial
customers to save money while they increase their
electric load. So we are supportive of the concept
but we’re opposed to the Bill in it’s current form
for a couple of reasons.
So the first is when we’re looking at rate
structures that are going to promote economic
development and retention with the state, we want to
make sure that the costs that are incurred to do
that, that provide clear benefit not to just all of
our customers but to the State of Connecticut as a
whole and we also feel that the Public Utility
Regulatory Authority, PURA, has the jurisdiction to
do that and merely implementing a cap on a single
component of a customers sell is probably not the
best way to achieve that. We also recognize that
Connecticut is home to a really diverse commercial
and industrial customer base. We have hospitals,
universities, manufactures so they have really
different needs and so we considered this when we
were designing our Conservation Load Management
Program and one of the things I’m most excited about
in our recently approved three year Conservation
Load Management Plan is a program that’s
specifically for our large commercial industrial
customers. It is called the Customized Solutions
Partnership. It is a demonstration project and what
that does it looks at this particular customer class
to come up with customized strategic energy
management solutions for them that we then pair with
electric and natural gas incentives along with
technical assistance to help them deliver energy
efficiency and operational efficiency savings within
their site.
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So we are very committed to collaborating with our
commercial industrial customers but we are opposed
to this Bill in it’s current form. So I am also
happy to take any questions that you might have.
SENATOR NEEDLEMAN (33RD): Thank you both. Yeah.
REP. DAVIS (57TH:) Thank you, Mr. Chairman. I got
the nod so I think I’m on, I got the floor. Through
you to the witnesses. I know there has been some
back and forth today about how solar cuts into
profits of the utilities and you had just mentioned
that it didn’t under Connecticut’s regulatory model.
Is that because those costs are bourn through the
other half of the Bill essentially the delivery
charges?
PAT MC DONNELL: Well, so if a customer net meters,
the netting piece that goes into their “bank”
obviously there is no physical netting. The power
goes out into the grid which is a good thing and I
think the customer should be compensated for that.
And the credits if you will that come back those
shifted costs of the various bill components
including the distribution charge, utilities are
allowed an overall revenue requirements by PURA and
the cents per kilowatt hour that we charge a
customer is merely a mechanism that we have to
spread the collection of that cost over the
consumption so we don’t get enough sales in a given
year, we allow to collect that from other customers
so if everything stays the same, and we didn’t
collect that $13 million dollars I mentioned, we’d
be allowed to then at the end of the year go back
and collect that revenue from all the customers. So
that’s the cost shift.
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Conversely, if there is a really, the load went up,
hot summer, we sold more kilowatt hours, the way it
works is our revenue requirement is what we’re
allowed to collect from customers. So if we collect
more money we refund that to customers.
REP. DAVIS (57TH:) So there could be, if it’s a hot
summer I think you used the term of that, a very
sunny summer then other ratepayers would actually be
getting refunded for?
PAT MC DONNELL: No because the cost shift is really
the bill components, the distribution charge, the
energy conservation programs, the renewable energy
charge and the Green Bank creates the incentive
program. Those are the components that when the
customer has a netting situation, when they are not
actually taking kilowatt hours out of their “bank”
they are not paying those bill components on that
consumption that they used. So that is the cost
shift that I referred to. So it doesn’t matter, if
actually it was a very sunny summer and there’s more
solar generation that increases the cost shift to
other customers. But the utilities are agnostic.
Think about that, it’s really other customers that
pay those components.
REP. DAVIS (57TH:) So at the end of the day the
utility makes the same amount of money and ends up
having?
PAT MC DONNELL: I like using analogies. We’re like
FedEx or UPS, we don’t decide if you shop at Amazon
or LL Bean or Lands End, but we deliver the power to
you so you can pick whatever kind of power you want.
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REP. DAVIS (57TH:) Okay. Thank you. Thank you,
Mr. Chairman.
SENATOR NEEDLEMAN (33RD): Thank you,
Representative. Representative Meskers.
REP. MESKERS (150TH): So the question on the $13
million dollars to my mind at least it would seem on
solar that seasonally in the sixth month period
where we’re billed by Eversource we are billed for
peak demand and for the generation of energy on peak
demand. I can’t imagine even though we don’t have a
storage component that what we need to purchase in
the way of energy and what we need in the way of
physical costs and physical plan to produce carbon
based energy is gonna be lower if we increase the
solar component?
PAT MC DONNELL: Absolutely.
REP. MESKERS (150TH): So wouldn’t that reduce our
costs in terms of what we’re paying to have that
cost available?
PAT MC DONNELL: Well I think the other thing that
policymakers certainly you gentlemen as well as the
folks at DEEP and PURA need to consider is there are
more places to get new energy from today than there
were in the past. Talk about offshore wind, there
is a lot of discussion of water scale, solar farms,
and the question is what is the relative cost to buy
comparable zero carbon resources and what is the
right blend of how much do we have on businesses and
homes, how much do we get from large scale solar
farms, what is the right blend of offshore wind or
maybe hydro and what is the right mix of these
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resources in the future and how do these all fit
together.
REP. MESKERS (150TH): And the last component I
would continue would be the what do we have in
landed costs or stranded costs, how about carbon for
peak demand because we need a reliable sustainable
system, right?
PAT MC DONNELL: Well I think the other piece to the
energy system of the future that we need to
contemplate because we do need to manage our peak
demand because maybe there are times when the wind
doesn’t blow and there are certainly times when the
sun doesn’t shin, right. So we need to be able to
manage that. So I think that storage will become an
ever increasing part of that landscape and I think
storage is a question of how and where we use it to
extract the most economic value and also demand
response when we get to the point where we can maybe
reach into your home through your wi-fi connected
devices and reduce your demand on peak periods.
REP. MESKERS (150TH): That’s what I’m suggesting
right now, the $13 million dollars in which were
spreading around, we haven’t yet reached a system to
measure the benefit to peak demand to reduce the
landed costs for our generation production.
PAT MC DONNELL: So I think there’s a lot of value
and understanding what some of the benefits are so
particularly because I think one of the things about
net metering doesn’t maybe represent the full value
of solar is the fact that solar installations,
probably most of them if they are netting are
generating more on the peak period than that host
site is using and that has benefit because it’s on
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peak, most of it’s summer, much coincidence with the
peak flow periods so it has a high value for that
solar.
REP. MESKERS (150TH): So we may not be compensating
accurately on this today?
PAT MC DONNELL: Well today now we might not be
compensating actually effectively. But I think we
need to work through these details and that’s why I
think we need to extend the status quo for some
additional time to allow us to put these things in
place and make sure we get it right.
REP. MESKERS (150TH): Okay and Mr. Chairman if I
could indulge you just one more question related to
the observations on the energy cap for industry?
What I heard from you was that you’re gonna work
with the companies, we have a program in place to
teach them how to use their, to conserve energy, to
be more efficiency, to work with us and you would
prefer not a cap on the tax or the transfer the six
percent. I think the industry on it’s side
presenting a flat tax to a company that’s
intensively demands energy because they are in the
productive phase of manufacturing, is not a way to
encourage them to locate the production to
Connecticut. So even though you can make them more
efficient, I would argue that most of the companies
that are already high users of energy are probably
very efficient and what we really need to look at is
a declining tax rate on energy consumption if it is
combined with job creation. So there should be an
incentive for them to bring more business to the
state and this six percent is a flat tax, it is the
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worse thing if you’re trying to attract business to
the state.
JANE LANO: So I can certainly understand where
you’re coming from. My concern with creating a
carveout for one customer class is that we would
have to potentially need to do that for others in
the future so I think that Steve Cowell earlier said
it best that we would be asking those residential
programs to subsidize some of our programs for our
commercial and industrial customers and I think that
some of the programs that we have now are really
quite innovative and we had a lot of great success
working with manufactures in the State of
Connecticut and really digging in and helping them
analyze their production line so that we can reduce
energy consumption per unit or per widget so that as
they scale up, their costs go down compared to what
they would have had then done things the same way.
So I am confident that we can continue to deliver
value to these customers in a way that goes beyond
just the cam charge.
REP. MESKERS (150TH): I’m just, I’m sorry an
inordinate amount of the revenue stream of the state
is personal income tax so anytime I get more people
making more widgets in Connecticut I’m voting for
that versus a flat tax.
PAT MC DONNELL: So I think, Representative Meskers,
I think I would a positive thought before we leave
today and that’s many years ago we used to have the
ability to do economic development riders when we
were vertically integrated and so that was so if
there was more sales and there was more energy to
spread our fixed costs over we could sell those
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incremental additional kilowatt hours at a lower
rate. So maybe what the Committee needs to do is
focus on the specific energy efficiency charge, is
look at giving PURA the tools to say if you have
someone who’s gonna increase the consumption in
Connecticut by “x” amount they should be able to get
some discount on that block.
REP. MESKERS (150TH): Well what I want is more
traffic on the roads and more people who are
working. Thanks.
SENATOR NEEDLEMAN (33RD): Representative Steinberg.
REP. STEINBERG (136TH): Thank you, Mr. Chair and
thank you for your testimony today. I particularly
appreciate your comments that perhaps the utilities
are unfairly portrayed as being resistant to
evolution of the business model but I can’t help but
notice some of the differences between the rate of
change so to speak in the State of Connecticut
versus surrounding states. It could be argued
perhaps there is more that Connecticut can do to
encourage utilities to make larger investments in
both distributed generation and in storage. Do you
have any ideas on, for example, if the State were to
make it easier for utilities to participate in grid
scale and other kinds of large projects whether that
would make a difference to your business model in
this state?
PAT MC DONNELL: So, both Ms. Lano and I spend quite
a bit of time in New York and they’ve got a lot of
new and different ideas in New York. I’m not sure
that any of those necessarily are mature and I think
that, you know, within the confines of the
distribution system certainly there are places and
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we actually have some installations of solar and
fuel cells within our distribution system where they
make sense that I think storage could also fall into
that same category so PURA actually as a
distribution system 2.0 that they’re in the middle
of to examine some of the things like where are the
good locations to put solar farms or fuel cells
within the distribution system then how might we
send price signals to developers to locate there.
So there is a lot of work currently going on at PURA
on those issues.
In terms of the large scale like offshore wind I
think those are best done by DEEP with large
procurements because they are really significant
scale and they need to be done in a competitive
basis.
REP. MESKERS (150TH): Thank you for that. I guess
I was really referring to how interested would the
utilities be in becoming involved with good scale
solar projects like getting more skin in the game
which might actually be when we get that final
docket report out of PURA with regard to good
modernization would help the utilities become less
dependent on just managing the grid and have other
incentives in sort of a new generation landscape?
PAT MC DONNELL: I think the sort answer to that
would be we would be open to those types of
discussions.
REP. MESKERS (150TH): Look forward to having these
conversations. Thank you, Mr. Chair.
SENATOR NEEDLEMAN (33RD): Thank you. Any other
questions? No. There being none, I think I’m gonna
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jump the order now, someone has to catch a plane
Katie Reilly.
PAT MC DONNELL: And I’m gonna leave the cost shift
with the Clerk if anybody wants it.
SENATOR NEEDLEMAN (33RD): Thank you so much.
KATIE REILLY: Thank you, Senator Needleman for the
flexibility in pushing up the time, I appreciate
that. So Senator Needleman, Representative Arconti
and Members of the Energy and Technology Committee,
thank you for allowing me to be here today. I am
here to testify on House Bill 7151. My name is
Katie Reilly.
I represent the Consumer Technology Association, we
go by the acronym CTA. We are the trade association
for the Consumer Technology Industry which employs
about 15 million people here in the U.S. We have
2,200 members, 80 percent are small businesses and
the remaining are a lot of the retail and brand
names you guys probably know and hopefully love.
For many decade plus we’ve worked aggressively on
energy efficiency issues for consumer electronics.
We have been able to quantify in peer reviewed
studies that while the number of electronic devices
in U.S. homes has increased 21 percent since 2010,
those devices account now for 25 percent less
residential energy consumption over that same
timeframe. This is due to our industry’s innovation
and investment not due to mandated state or federal
efficiency standards.
So within this context I would like to respectfully
request the removal of a few items from House Bill
No. 7151 as it stands right now.
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First I would like to request the removal of the
outdated energy efficiency standards for compact
audio players, DVT players, DVRs and televisions.
The California standards that are currently in
California law were outdated at the time of
adoption. So Connecticut when they adopted the
California standards those were also outdated at
that time. I’ve demonstrated in my written comments
we’ve provided support for how those calculations
were off at the time of adoption both in California
and later in Connecticut.
Second, I would request the removal of standards for
computers and monitors. The devices that are sold
in the California market in complying with the
California regulations are the exact same products
that get sold here in Connecticut. So residents of
Connecticut are already going to be receiving the
energy efficiency benefits of those California
regulations and what we’d like to see is not having
the regulatory burden on our industry to comply with
regulations here in Connecticut.
Third, we request the removal of the broad authority
language both existing and new for DEEP to adopt
regulations on any consumer product. We feel it is
more prudent for the legislature to retain this
oversight of product categories requiring any energy
efficiency standards if needed.
And lastly we require the removal of the language
requiring consultation with other interstate energy
efficiency collaborative organizations. The
inclusion of this language opens the door for any
NGO to be consulted without similar difference given
to us as industry, the regulated community.
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So we feel the requests that we’re making are inline
with the goals of the law which are to promote
energy conservation, be cost effective for consumers
and not impose unreasonable burden on businesses.
So just to stress kind of two final points, you
know, this is a regulatory burden on us as an
industry. The cost savings that are already
happening because California has regulations in
place, the residents of Connecticut are already
reaping those benefits so adopting those into law
here in Connecticut really is only just a regulatory
pain on industry. So thanks for your time and happy
to answer any questions.
SENATOR NEEDLEMAN (33RD): Thank you. Well that was
another one, on time. Anybody have any questions?
REP. ACKERT (8TH): Thank you, Mr. Chairman and good
to see you and thanks for your testimony. So I get
some of the ideas on some of that. Now when you
mention the computers and monitors piece to be
removed from that, I get, you know, regulations but
the computer monitors and computers we’re selling
would meet the standard regardless?
KATIE REILLY: So the computers and monitors that
would be sold here in Connecticut already will have
to meet the regulations that California has passed
and is implementing. Our manufactures, our member
companies do not sell products state-by-state. They
fall into a national U.S. Market or an even overall
North American Market. So if they have to comply
with the California standards the products being
sold here in Connecticut are already reaping those
benefits. It’s kind of an unnecessary duplication
of a regulation.
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REP. ACKERT (8TH): So they wouldn’t make a computer
monitor California version and a Connecticut?
KATIE REILLY: Correct.
REP. ACKERT (8TH): Is that a fact though, is that
true?
KATIE REILLY: Yes, that is true. I’ve never seen
any studies out there quantifying or refuting that
what gets sold in one place is different than what
gets sold in another. That’s what our manufactures
have told us.
REP. ACKERT (8TH): Thank you. And I didn’t see the
numbers on potential, what the efficiency, I mean
one of the things we do know energy efficiency no
matter how it is created is actually played in our
energy distribution from ISO New England. So do we
know what the savings, the overall savings since you
brought it up, that Connecticut would see in terms
of reduced energy going to this, with the passage of
this legislation?
KATIE REILLY: For which product category
specifically?
REP. ACKERT (8TH): Well, I’m not going to go
through all 80 of them. I’ll look into it a little
bit more myself.
KATIE REILLY: Yeah, I’d be happy to followup via
email.
REP. ACKERT (8TH): Yeah, I’ll do a little bit more
research on my own but I didn’t know if you said, oh
this products does this amount but that’s fine.
Thanks. Thank you for testifying. Thank you, Mr.
Chairman.
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SENATOR NEEDLEMAN (33RD): Representative Gresko.
REP. GRESKO (121ST): Thank you, Mr. Chair. Just a
quick statistical clarification. You said 21
percent more electronic devices now than in 2010.
KATIE REILLY: Correct.
REP. GRESKO (121ST): But 25 percent less energy
usage?
KATIE REILLY: For the same electronic devices over
that timeframe. So while we’ve seen the number of
devices go up in peoples homes by 21 percent, we’ve
seen the energy consumption of those products go
down over that same timeframe by 25 percent. So just
some of the energy efficiency efforts were
voluntarily making as an industry.
REP. GRESKO (121ST): Thank you, Mr. Chair.
REP. BUCKBEE (67TH): Thank you, Mr. Chair. Hope
your voice is settling in. Thank you for your
testimony. I guess I have a question, there is a
lot of outdated things on here and a lot of this is
already being done and I heard your testimony where
you’re against the implementation. I guess my
question is, is there anything in here that’s
revolutionary or necessary as far as legislation is
concerned? I mean they are all wonderful ideas and
you already buy all of them now, I guess that is
just my question. Is there anything in here that,
in your opinion, you would say, “Yes” we really,
really have to have that?
KATIE REILLY: Yeah and I can only speak to the
consumer electronics aspect of the Bill.
REP. BUCKBEE (67TH): Of course.
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KATIE REILLY: But no, the standards that are being
referenced are already on the books in California
and our members are going to have to comply.
REP. BUCKBEE (67TH): It’s so simply an outdated
concept to be putting forth as legislation right
now.
KATIE REILLY: Yeah.
REP. BUCKBEE (67TH): Great, thank you so much.
Appreciate it.
SENATOR NEEDLEMAN (33RD): Thank you. I think that
savings is because I got rid of my old Sony TV.
KATIE REILLY: [Laughing]
SENATOR NEEDLEMAN (33RD): Thirty-five inch,
weighted 400 pounds. Just got rid of it.
KATIE REILLY: There still out there.
SENATOR NEEDLEMAN (33RD): I know, I know. We have
a trailer load of them in town. So thank you for
your patience and have a safe flight.
KATIE REILLY: Thank you very much.
SENATOR NEEDLEMAN (33RD): We are going to go back
to our list right now. Erica Dahl and Steven
Lassiter.
ERICA DAHL: Thank you for having us today. I am
Erica Dahl. I am the Vice-President of Government
Affairs for Vivint Solar. My colleague Kyle Wallace
and our colleague at Sunrun, Steven Lassier. We
are two of the largest residential solar companies
in the U.S. Our offices are in North Haven and
Hartford and many of our employees were here today
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because they are concerned about what Senate Bill 9
will mean for them and their families.
Our companies are fierce competitors but we’ve come
together to address the impending crisis that SB-9
created. Without legislative action this session
Connecticut’s residential solar market will face
unprecedented danger in October or sooner. Our main
concern is this, HB 7251 as drafter will only
postpone the implementation of SB-9’s policies, not
fix them. We strongly disagree with DEEP that more
time is all that is needed. It is the underlying
structure of the tariffs that is so problematic. HB
7251 does not change the SB-9 polices that
negatively impact the solar in other states. We are
referring to buy all/sell all and instantaneous
netting. To be clear these polices are not common.
Few states have tried them and several of those have
replaced them.
STEVEN LASSIER: Again Steven Lassier with Sunrise.
I just want to get a more into the detail of those
programs and what we’ve seen in other states given
that we have the luxury of operating in about 20
states across the country. We have a wide view of
the polices that different states have implemented
and, you know, we want to help bring the Committee
up to speed on what we think has worked well and
what we have seen and know what does not work well.
So for example, in Maine, former Governor LePage
championed a by all/sell all program, they called it
gross metering. Policy makers thought it would save
money for rate payers but it was actually much more
complicated and expensive than anyone anticipated
including it’s proponents. As a result the Maine
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Public Service Commission repealed buy all/sell all
in Maine in December just a few months ago for large
customers. Two weeks ago the Maine House repealed
buy all/sell all for all customers including
residential customers. They reinstated net metering
to allow themselves more time to do a study to
figure out a better program and the Governor is
expected to sign that Bill as soon as this week at
which point, Connecticut would, once net metering
goes away in Connecticut as currently scheduled,
Connecticut would be the only state in New England
without net metering. And just for reference about
38 states across the country have net metering
including places like South Carolina which likely
will vote this year to extend it for two years.
In terms of instantaneous netting, in Utah, they
tried it in 2017 so my colleagues and fierce
competitors in the marketplace can personally attest
to the impacts there because their headquarters is
in Utah. A large group of Utah stakeholders
including the solar industry, the governor’s office
and others tried to design instantaneous netting in
a way that would work. The solar industry signed
onto the settlement thinking that it could work.
But because of the tariff’s extreme complexity and
uncertain value proposition especially for customers
who did not understand it, everyone was wrong. Well
intended but misinformed policy shrank Utah’s
residential solar market in the past several yeas by
70 percent, meaning lots of jobs were lost. These
same policies unfortunately are locked into
Connecticut Statute and the current Bill today does
not change that. Other states have pursued much
better policies and our view and Representative
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Ackert have said, what are they, we are happy to
talk about them and would love to with the
Committee. DEEP said it had a lot of work that it
has already done on these programs but it doesn’t
change the fact that you’re still continuing down
the same path, toward the same outcome, terrible
outcome that we’ve seen in other states. The
solution is to allow PURA to consider other policies
not just those locked into statute currently.
We urge the Committee to pause the implementation of
SB-9s damaging policies and continue current
programs that have worked until a Value of Solar
Study is completed including taking a look at what
other states have done that has worked well. That
is the conclusion of our remarks. We are more than
happy to answer questions.
I would also love to make a couple of points from UI
if possible. We had this discussion about a cost
shift, we agree with DEEP that there is not a cost
shift in Connecticut as was stated by the
Commissioner earlier. The U.S. Department of Energy
has also taken a look at this issue and found the
same as long as your solar penetration is under 10
percent or so, they have found that a cost shift is,
“imperceptible.” Connecticut as we’ve discussed
today is probably around two percent so the amount
of solar in Connecticut would have to quintuple
before there is even a material cost shift
occurring. One more point there, you heard a $13
million dollar figure, I don’t know what the
definition is that they’re using but I am pretty
sure that it’s not taken into account the benefits
of solar, right? You’ve got costs, you got benefits
what is the net? Is there a net cost or is there a
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net benefit to solar? We don’t currently have the
answer to that because the State has not yet done
the Value of Solar Study that everyone today has
asked for. I guess I’m way over time so I apologize,
it’s late and really appreciate the Committee’s
attention.
SENATOR NEEDLEMAN (33RD): Thank you. Anybody have
any questions? Yes.
REP. STEINBERG (136TH): Thank you, Mr. Chair. You
know you make reference to the possible solution
beyond a pause of empowering PURA to consider other
options to free them from this path they are
hurdling down and will result in the cliff this fall
unless this legislature takes action. Has any other
state required their Regulatory Agency to do this
kind of exploration and how long did it take em to
do so?
KYLE WALLACE: Yes, we’ve seen these type of. Oh,
I’m sorry, Kyle Wallace with Vivint Solar, Manager
of Markets and Regulatory Affairs. We have seen
these type of settings done in other states, New
York has been doing a value of distributed energy
resources for several years. Utah is in the middle
of also doing a value type solar study required by
the legislature. It is going to be a multiyear
process to collect data to be really well informed
and it will help determine the successor to the
current program which is already not done well.
California is about to start it’s NEM 3.0
discussion. They’ve already done what Connecticut
is trying to do once and they are now going to do it
a second time, so there is definitely models out
there that PURA and others can look at. Where this
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has been done well and not so well and that’s what
we would like them to do.
STEVEN LASSIER: And we’re happy to provide to the
Committee a list of the states that have completed
Value of Solar Studies. There is a minimum of 23 by
my count. Maryland as another speaker addressed
earlier probably has done the most recent one and we
would be happy to share that with the Committee as
well.
REP. STEINBERG (136TH): I guess what I’m asking is
slightly different which is, what has been discussed
in this Committee is postponing to a date certain
any implementation of Section 7 of the former SB-9
which as you’ve just testified doesn’t rally change
anything. Short of coming up with a totally fresh
strategy that would be enshrined in the Statue
legislatively this session, what is it other than
doing the Value of Solar Study which may take some
time that you recommend that we ought to do to
forestall any bad outcomes for the solar industry in
this state?
STEVEN LASSIER: As the Committee has proposed we
are absolutely supportive of adding 100 megawatts to
the residential solar incentive program and we view
that as absolutely necessary to avoiding a market
cliff once that program ends given that the new
programs are not yet ready as all the stakeholders
who have been over at PURA for the past year have
acknowledged. To the point about what can it do in
the meantime, I mean with the extension that would
allow for continuation of the status quo programs in
place, this would simply be what has been going on
in Connecticut the past few years. It’s not a new
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program, it’s the net metering program everyone is
familiar with. That could continue along with RSIP
and, you know, once RSIP would run out of the next
100 megawatts most installers at that point could
probably sustain, you know, just staying on net
metering without a further continuation of the
incentive and then the real point of the study,
right, is to use it to inform the best, next policy
after net metering or it might say, you know what,
there is a net benefit in Connecticut currently from
net metering, there is no justification for changing
it. All ratepayers are benefiting as well as the
solar.
REP. STEINBERG (136TH): If I may Mr. Chair, a quick
question.
SENATOR NEEDLEMAN (33RD): Sure.
REP. STEINBERG (136TH): You also made reference to
the circumstances PURA encountered when they try to
determine the feasibility of daily net metering and
ran into the issue of the availability of
appropriate technology by the utilities, has any
other state sort of run into this problem whereby
they’ve been waiting on the utilities to install
sufficient numbers of the appropriate metering
technology before they’ve gone forward and is any
state sort of arbitrarily set a date which this
would need to happen? In other words even if we
extend for two years, then in that two year period
we are presuming that the technology be in place,
then, which isn’t now, is that even from your
experience a reasonable assumption?
KYLE WALLACE: Yeah, I’m not aware of any other
state where that has happened where they have had
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technical limitations yet they then push forward
with the program anyways even knowing that it may
not be feasible. I can’t think of any off the top of
my head.
STEVE LASSIER: I mean we didn’t even realize the
gravity of what had happened until we have been
sitting through all the proceedings at PURA over the
past year. I mean this was a big moment for a lot
of folks, I think, to realize that the utilities, UI
has more advanced metering than Eversource generally
but everyone in the room kind of stopped and said,
woah, like the utilities don’t even have the meters
to implement the policy yet and they may not for an
additional two years. Why did we pass this policy
already? I mean this is obviously part of one of
many problems of SB-9 but I think it’s just further
evidence that, you know, the policy unfortunately
was not very well thought out or thought through,
both on the utilities side from whether the
utilities could implement it but also on the
installers side because we, of course, heard a lot
about certainty and predictability, of course we
have to train, do everything from updating the type
of equipment we use down to training our sales staff
and you can’t do that overnight if you are selling a
completely different product with a different
system.
REP. STEINBERG (136TH): Thank you for that and
that’s why I still have a problem tying ourselves to
a specific date certain for the conclusion of this
pause. Not having any certainty as to when we
should actually be able to implement this program.
So it is, I’ll give it consideration. Thank you,
Mr. Chair.
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SENATOR NEEDLEMAN (33RD): Representative Buckbee.
REP. BUCKBEE (67TH): Wow, that’s the first time
I’ve heard my name today from you, that’s good.
Good for you. [Laughter] Thank you so much for
your testimony and for your passion. I guess I have
a couple of questions for you if I may. One is you
talk about the Value of Solar Studies is there a
significant variation on these from state-to-state.
Obviously the climate difference from us to Georgia
is not gonna be something that matches up that we
know of well with Connecticut at this point or?
STEVE LASSIER: Yeah.
REP. BUCKBEE (67TH): Kinda arbitrary?
STEVE LASSIER: No, there is a lot of variation in
part because there is a lot of variation in the
methodology and what the inputs are. I think there
are certainly Best Practices for how to set up the
study that have a lot more integrity than some of
the others we’ve seen. So for example, just not to
criticize DEEP too much, but we took a look at kinda
what their cost benefits, they only did a cost
analysis in there.
REP. BUCKBEE (67TH): A good day to criticize, go
ahead. [Laughter]
STEVE LASSIER: Okay, sure. I don’t need
encouragement. So if you look at the 2018
Comprehensive Energy Strategy at DEEP like the title
of the section really says, “Cost Analysis” right,
it doesn’t even say Cost Benefit Analysis and they
too try to quantify, you know, what they describe as
a cost shift but, we talked a lot about that, I’ll
defer to Kyle.
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KYLE WALLACE: Yeah and I think what we saw when we
looked at that, there were very large methodological
issues with how that was done which wasn’t done in
the stakeholder process where we could really have
the Best Practices from other states formats so we
really guess what the value is. I know Maine has
done Value of Solar Study prior to them implementing
their bad tariffs and it actually found, and correct
me if I’m wrong, that the value of solar was greater
than the retail rate so that means net metering was
saving ratepayers more than if they had gone with
value solar approach. And so that is a regional
example but it does vary state-to-state,
environmental compliance things like that, RTS
standards play into that of what the value of voided
environmental costs or compliance costs. So there
is a lot of studies out there but I think there is a
really good Best Practice that we could follow.
ERICA DAHL: And I think it could also help inform
the goas behind the RPS and some of the other things
the State has stated they are interested in doing in
the future and we want to be part of that larger
plan and that discussion for moving Connecticut
forward.
REP. BUCKBEE (67TH): So I guess to that it seems
like a lot of it’s changed. Technology changes on a
regular basis and we’re talking a lot of these
things are two years out. I heard some people
suggest today we wait two years on the study, we get
more data. I guess my question to that is has this
industry changed drastically in the last two years,
I would assume the answer is the technology’s
changed and how much to you expect it to change in
the next two years? So I guess it’s a lead in to
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say wouldn’t you be more in favor of something
sooner than later and not wait two years on a study
before we put something out there because it will be
obsolete by the time our study’s done?
STEVEN LASSIER: The technology costs have gone on
down a lot in the past two years. I mean it hasn’t
been as great as in the preceding ten or so. I
don’t think the findings of the study would be
obsolete. I think it’s critical that the State
establish some baseline to figure out, you know, to
answer questions like what is the value of net
metering is a cautious cost actually occurring, if
not what might it might it? Five, ten years into
the future. What is that cost compared to the
benefits of solar? And only then once you’ve got an
honest crunching of the data do you have, can you
really be in a good position to formulate good
policies.
KYLE WALLACE: And the key part of the Value of
Solar Study is to setup essentially the formulas and
the methodology so those can be agreed on so that
you can regularly update input and so, one you have
that initial foundation, you can update it to just
keep pace with changes in the industry and changing
environmental factors just by changing the inputs
once you have the methodology in place.
REP. BUCKBEE (67TH): Considering that is as long as
the technology doesn’t take another drastic shift.
We need a base. We need to start at a base, okay.
One more question if that’s all right? Has any
other state, any other area done any combination of
net metering with maybe a personal use or even a bid
process sell back? Has anyone done that where the
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customer, the person, the individual who owns a home
can have a bid process for buying it back if they
want to use it for personal use and sell back what
they would like to sell back. Has any of that been
approached or tried anywhere cause I just see it as
a possibility for more of a market for that
homeowner that has the panels on the roof and want’s
to do something with it. They want to use their own
power first off. I think a lot of people thought
that when they first got into this, right. I’m
gonna power my house with solar. That was the
initial thought I think from a lot of the
homeowners. So has anything else been done aside
from net metering that has been proven to work or
has it not?
STEVEN LASSIER: That has been proven to work,
absolutely and like I said we would be happy to
share those examples with the Committee. I mean you
can point to the time of use rate for example that
states often transition to from that metering that
better aligns with the cost of the overall system in
terms of the price of electricity throughout the
day. To answer your other, the other part of your
question which is very exiting actually can we
create, you know, in the future some type of energy
marketplace where say you have two households right
beside each other. One has a sunny roof one has a
really shady room and they can’t go solar but their
neighbor can.
REP. BUCKBEE (67TH): Was worried about what you
were going to say about “shady” I was afraid of what
you were going to say there but thank you.
[Laughter]
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STEVE LASSIER: So if I am the homeowner with the
shady roof and my neighbor is exporting power to the
grid and they are getting compensated via net
metering whatever, say I really value clean energy
and I would pay even more than the retail rate
what’s stopping you from buying you, your literally
buying your neighbor’s excess energy that they are
exporting to the grid and paying even more for it
than they would get on the net metering. That is
kind of like a transactive energy marketplace that
what is it, not Bitcoin but blockchain, may get
there at some point.
REP. BUCKBEE (67TH): A little bit different.
Blockchain is really the ledger right? That’s where
you are tracking and keeping it, but yeah.
STEVE LASSIER: Right but if.
REP. BUCKBEE (67TH): Virtual currency of energy
itself isn’t a horrible idea at all but.
STEVE LASSIER: Right. I meant to say blockchain
but you could track exports and purchases, right.
REP. BUCKBEE (67TH): Right.
STEVE LASSIER: In a marketplace with millions of
participants. We are getting off topic a little bit
but.
REP. BUCKBEE (67TH): It’s a little off topic but
that is kinda the point I’m trying to make here is
that while net metering, some people are completely
anti-net metering, they want it to go away and I
think there is too much for us to learn from here
yet and I think there’s a lot of opportunities for
us to see some more marketplace open up in this
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entire industry. So I want to listen to what else
is said on this but thank you for your input today.
STEVE LASSIER: One more if I could just on that
point of the marketplace, right, so our companies
are currently deploying energy storage. We are
selling home batteries with our storage systems. It
is very new. We are only operating in say half a
dozen markets. We would love to start selling
storage in Connecticut and it has a lot of benefit
one of which being backup power so when the grid
goes down your solar system generates power, powers
your home during the day, powers your battery. You
can use your battery to power your home at night and
then the next day when your battery’s drained the
whole system starts over again. So in the case of
multiday outage you’ve got power, right? You’re
cruising. And it could offer, you know, on a time
of use rate for example, when the grid most needs
power in the late afternoon or evening those
batteries can discharge either to provide power to
your house or to the grid and reduce rate for all
ratepayers, right because all aggregate energy is
not as much as demanded.
REP. BUCKBEE (67TH): Or the batteries could provide
a whole new marketplace as well in lieu of
generators and more along that line. But again all
great new things and I love that this session
energized it at the beginning of the dinnertime
hours, but this is good stuff. Thank you so much.
STEVE LASSIER. Absolutely and the key point is net
metering has been the engine of the solar industry.
The solar industry is going to be engine of storage
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but without a viable solar market you’re not gonna
have anyone to install storage.
SENATOR NEEDLEMAN (33RD): Thank you.
Representative Meskers.
REP. MESKERS (150TH): I will be a little less
electrifying no pun intended. So first you’d like
to see a rollback of the entire regulation. In lieu
of the rollback in Regulation 9 the old one and you
commented that you wanted the mega raised from 50 to
100, right.
STEVEN LASSIER: We are supporting the Committee’s
Bill that would add 100 megawatts under the RSIP
Program.
REP. MESKERS (150TH): So if we add 100, if we add
50 or we add 100 what kind of employment are we
talking about? Can you give me a guesstimate?
STEVE LASSIER: If you add only 50 megawatts, right,
we might go through, the industry may install all
that amount of solar at the current rate in even
less than a year and utilities themselves have said
they will need at least two years to update the
metering and everything else for the new program
that’s currently locked in to take over in that
metering. So if it is 50 megawatts they may not
even have enough time to set up the new program.
REP. MESKERS (150TH): No, no, I guess the question
is increasing to 100 what do you think that does for
employment, period.
STEVE LASSIER: So on the jobs piece even from over
the last year with this uncertainty looming over the
industry, Connecticut’s solar market did increase by
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three percent for jobs from, year over year and that
was with the chilling affect from the legislation
from last year. If there was certainty for a longer
period of time, I do think you would see more of
investment from companies in the State saying we
think this is a long-term viable market. We are
going to hire more. We are going to be more
aggressive in Connecticut because when you look
around at the neighboring states and say I have
certainty in Massachusetts, I have certainty in New
York, I have certainty in Rhode Island, it is real
easy to say I am going to focus on those markets and
wait to see what happens in Connecticut and that is
going to stall growth. So I do think having some
longer term predictability that this pause would
have, then also having a long-term certainty of a
better and more well though out successor tariff
that could spurt that job growth substantially.
REP. MESKERS (150TH): Okay, thanks.
ERICA DAHL: If I could just add as well this is a
very capital intensive business as you can imagine.
We have tax equity partners who are paying a lot of
attention to the policies in various states to make
decision about whether or not they are going to
continue to invest in the industry and without those
investments we can’t continue either. It’s not just
jobs, it’s not just customers it’s actually our
investors as well. So, as you know, the ecosystem
and this has been a big topic of conversation with
our Capital Markets team. Our boss who runs Capital
Markets Government Affairs doesn’t report to legal,
it doesn’t report to external affairs, it reports to
the Capital Market. He’s based in New York. He has
a home in Connecticut. He would have been here
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today if he wasn’t meeting with institutional
investors, that’s how important this is to how and
where we invest in the 22 states we do business in.
And for those of you that worked here with us from
the beginning, you know, this morning we did have
our Northeast Sales Director who has been here for
four years and as we were texting this morning about
what today was going to look like, he was very
nervous to have his team members here to hear the
intricacies of what this is because that is
messaging directly to them that this is
unpredictable and unstable and have already been,
and we have been working on this collectively the
two competitors for a year this week. We got
involved in this and all I can say is that we are
doing the best we can to educate and advocate and be
partners with the legislature and we are confident
that we are going to find a fair solution but he has
a district manager who asked him today what the
prognosis was and I said, you know Troy we have
until June 5th. We’re gonna give it our best so
your attention to this and willingness to be open as
a partner with DEEP so that we can find a win-win
means a lot to us.
REP. MESKERS (150TH): And now that you mention
that, if you have some of the presentation material
that you’ve made to the Wall Street investors it
would be very helpful for us because there you’ll
give us a competitive background on the entire
industry across the 22 states and we could maybe get
some insights on the regulatory side.
ERICA DAHL: As you know we are both publicly traded
companies so anything that is public information
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that we can certainly compile and give you a
snapshot.
REP. MESKERS (150TH): If you’ve got any roadshows
that are public I’d love to see them.
ERICA DAHL: Absolutely, you said the magic word,
roadshow. So yes, thank you for asking.
SENATOR NEEDLEMAN (33RD): Senator Formica? No.
Anyone else? Senator Ackert.
REP. ACKERT (8TH): Through you, Mr. Chairman.
Years in the past when someone called me senator I
said, “No way, ever.” [Laughter] It almost happened
a couple of years ago, not that I would have got
elected, but who knows. But thanks for being here.
You know, and I get the uneasiness part of it but I
hope that the people that are in the room, were not
here cause we don’t want to fix this. We’re here
because we want to. We’re listening and want to
get, you know, maybe we won’t get it 100 percent
right this time but understand that we’re committed
to making sure that we have people working. I mean
most of the Committee’s in here, some Bill in their
Committee is about job creation and support it. So,
I mean it’s truly the key. I don’t think any of us,
hopefully everyone of us has met with one solar
company and heard about their stories. But Steven
when you mention South Carolina recently, now they
were going to another metering structure, is that
what it was and then they and was that like ending,
going and rolling in this year type of thing and can
you talk about that for a moment?
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STEVE LASSIER: I can I am actually going to let my
colleague Kyle talk because they have an important
story to tell on that.
REP. ACKERT (8TH): That would be great, thank you.
KYLE WALLACE: Yeah, South Carolina was a little
different where they had a net metering cap of two
percent similar to what Connecticut has and so
that’s basically they were running to that cap.
Their major utility hit that last year, the second
half of last year and the other main utility was
expected to hit it here any day now. So that’ where
they were going then to basically an instantaneous
netting style program where everything now that is
exported would be valued much less than under the
net metering. It essentially cratered the industry.
I mean we personally had to pull out last year when
the main utility had hit their net metering cap. We
had to close up shop and so now that in the
legislature they are looking to expand for another
two percent, on the cap, increase it to four percent
but we’ve already left and the jobs are gone. And
when a company is gone, it’s difficult to jump back
into that. So that’s what kinda was going on there.
They weren’t, they didn’t have a very clear
successor program. It was kind of left up to the
utilities after the net metering cap was hit and so
they kind of defaulted to where we’re gonna pay the
wholesale rate for everything you ask for and this a
qualifying facility under PURPA.
ERICA DAHL: So that legislation has passed at their
state senate unanimously and we’re waiting for
action now in the house. It’s something that we are
watching carefully. Sunrun is still in that market
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so our company still had to make a decision if we
stayed or went and our employees were telling us, we
can’t sell in the uncertainty of this market and
we’ve had employees pack-up, move to Florida, move
to other states in the surrounding area where they
have more certainties. So we are anxiously looking
at it and we are hopeful there is a chance the
legislature rolls this back.
I also want to use the example of Nevada quickly if
I may. I know that has been used today but that,
with the market, we literally that was the first
month that I started at Vivint, April of 2015 and we
were making plans to enter that market. Given that
we are based in Utah we have a lot of employees that
were very anxious, have family in neighboring
Nevada, great cost of living, wanted to move there.
We literally had employees in their cars, we had 100
open job racks. We had employees in their cars
driving across the border to start their new lives,
had little kids, signed leases in homes when the
utility hit their cap and it was over. So we then
had to sit out for two years while changes were
happening at the commission, at the legislature and
after sitting on our hands for two years, we are not
back into the market because they brought net
metering back and they did it in a thoughtful way
with which our industry could participate, bring
Best Practices. It’s now one of our top five markets
now. We are serving customers, we’re making a
difference, we are providing energy choice and we’ve
created a tremendous amount of economic development
from the jobs. Obviously we pay payroll taxes, sales
taxes on our equipment, etc. ourselves so that is
sort of a cautionary tale of why go through the
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topsy-turvieness of that when we can get it right by
looking at other states and that is really again
what we are asking for today is give PURA the option
to open aperture and we welcome continuing to be a
part of that discussion.
REP. ACKERT (8TH): Was the Nevada net metering
comparable to what we are doing now or is it a
different structure?
ERICA DAHL: So at the time it was in it’s original
form. It was a 1:1 credit and Kyle can explain what
we negotiated for.
KYLE WALLACE: Yeah, and the compromise that brought
net metering back, it’s essentially use can still
net over a monthly basis any credits at the end of
the month are valued below the retail rate and as
they deploy certain megawatt amounts, value declines
overtime. So it started at 95 percent of the retail
rate, went down to 88 which is where it currently is
and will go down to 81 and then 75 as they deploy 80
megawatts per residential solar.
REP. ACKERT (8TH): Would you call that a hybrid
metering tariff model type of thing?
KYLE WALLACE: It is, cause the current structure in
Connecticut is basically annual netting, right.
Your credits can roll over month to month at the
full rate for up to a year. So this was kind of a
first-step compromise of dealing with those exports
on a monthly basis and kind of stepping down over
time but, while it is loss of value and somewhat
versus retail net metering, it is a compromise that
the industry could live with in Nevada.
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REP. ACKERT (8TH): So a good help for last year,
Ryan Wolf would call penciling out a project. You
can pencil the project out he would call that,
right. Sell it.
KYLE WALLACE: Yep.
ERICA DAHL: We have certainty.
KYLE WALLACE: Yeah and when you’re looking at a
customer’s utility bill you have their monthly
usage, you can estimate pretty accurately what
monthly production will be from the system and you
can make those economics work. The values are
known. It is fairly simple. People can understand
it. It does work.
REP. ACKERT (8TH): Thank you. Thank you, Mr. Chair.
SENATOR NEEDLEMAN (33RD): Thank you. Anyone else?
Yes.
REP. MESKERS (150TH): And just lastly, are any of
the states at this point encouraging a system that
includes storage on the personal basis?
STEVE LASSIER: Yeah, absolutely. Like we mentioned
time of use rates do a better job of encouraging
storage deployment. New York is about to rollout
storage incentive to reduce the cost which is still
very significant. In Massachusetts with the SMART
program comparable.
KYLE WALLACE: Yeah, well I really want to focus on
the California one as well because it is finally
getting to a place where just the time of use rate
alone can help make the batteries economical now for
customers without separate incentives. So I think
that is a really.
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REP. MESKERS (150TH): Basically because they can
sell at peak moments because they have control of
the energy because it is in storage.
KYLE WALLACE. Yeah. Exactly it helps make the
economics for storage work even though the costs are
still fairly high. Now it will just get better and
better with time.
REP. MESKERS (150TH): And for the regulators that is
going to be more interesting in reducing peak demand
and reducing generating.
KYLE WALLACE: Yeah, and they’ve already had to
respond to that where their peak period had kind of
shifted to later in the day because they were so
successful with solar and now with energy storage
they’re addressing those later peaks when the sun is
not shining by holding that solar from midday when
they don’t necessarily need it and using it at
night. So it’s created a really interesting dynamic
there and it also plays really well into the
electrification of vehicles and other things that
they are trying to do. It is getting customers more
engaged because they have control of their energy
bills through time use.
ERICA DAHL: And I will note California did pass 100
percent clean energy mandate by 2045. So they’re
all in and they know they can’t do it without the
progressive polices that include the innovation of
storage.
REP. MESKERS (150TH): Thank you.
SENATOR NEEDLEMAN (33RD): I want to thank you.
Have a great night. Did I miss you? No, no, I’m
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sorry. Amy McLean. Thank you for being patient all
day.
AMY MCLEAN SALLS: Thank you for giving me the
opportunity. I actually work really closely with
all three of these people in the efforts that
started last March. We’ve been talking since last
March about what’s the best solution. My name is
Amy McLean Salls. I am with the Acadia Center and
once again I fell as though I don’t have a lot to
add and it certainly is not as exciting as what you
just heard. I think that the smart way to go here
is to listen to the people who know best and I think
on the issue of solar, these are some of the best.
I did want to bring your attention, I’m going to say
I am in support of HB 7151 which is the Act
concerning energy efficiency because we believe that
everything you heard today, which is all positive,
is a very important step forward.
And then I also want to comment on HB 7251 which is
this Bill we’ve been hearing so much about. In my
testimony I sort of give a little bit of a history
of what happened and then where are we now. In my
testimony we’ve done a lot of modeling at Acadia
Center and you can look and see some of the
comparisons to where we are in New England compared
to where other states and how they are moving their
stuff forward. It goes up to 2017.
But Vermont has installed four times as much
distributed solar per person than Connecticut and
Massachusetts is nearly two times more per person.
These higher deployment rates in the nearby states
indicates that Connecticut’s in-state solar industry
could expand if we have effective solar policies.
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So I’m just gonna cherry pick a couple of facts from
this testimony.
The current deployment rate will also prevent
Connecticut from meeting its climate goals as you
heard earlier. As Acadia Center has modeled through
its EnergyVision 2030 project, Connecticut will need
to more than double its current annual rate of
distributed solar installations to stay on track
through 2030.
I also think to capture, this is the other piece I
wanted to mention, to capture the full economic
potential of rooftop solar for Connecticut, existing
policies will need to be changed. This is what
we’re here to do today. The legislature now has the
opportunity to revisit the policies, the negative
policies that were unintentionally most likely put
in place. I’ll give us all a pass. We didn’t know
it was gonna be that way. So we have to take this
opportunity to change it.
I think the other folks that talked about, you know
what does this do? It’s 2,200 solar jobs are at
risk. It harms the solar growth that puts our state
at risk for missing our climate goals. It is based
on an unfounded cost shift theory. Solar only
provides one to two percent of Connecticut’s total
electricity. A U.S. Department of Energy study
found that cost shifts to non-participating
residents are “imperceptible” again you have heard
this in areas with less than 10 percent solar.
Then the last thing I want to say here is that we
worked very hard to give you the information that
you might need to make these decisions and to
understand how serious we all are. So I’m just
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gonna hold these things up because you have them.
But this is a letter that was written and there are
50 names or 50 organizations on this letter, that is
across the board. It’s energy, it’s environment and
it’s solar industry. I think that shows there is a
cohesiveness and an energy that we’re there to help
you to get to what you need.
Then lastly, just the fact that we actually did take
time to look at the actual language and make some
suggestions. So thank you for your attention. I
have been impressed by the thought you all have put
into this and you really wanting to understand it
and I just really appreciate it very much. Thank
you.
SENATOR NEEDLEMAN (33RD): Thank you so much. Yes.
REP. STEINBERG (136TH): Thank you, Mr. Chair.
Thank you, Amy for the documentation you provided
today. Those charts are highly illustrative of
exactly the opportunity that we are on the brink of
missing here. And I am concerned about your point
we are actually making all our climate change goals
even more difficult to achieve if we continue down
this path rather than creating a Green New Deal we
seem to be creating a Green Bad Deal and we need to
get back to get back on course very quickly because
the lost time is only going to compound our problems
going forward. And most importantly we thank you
for actually going beyond simply agreeing that we
have a problem and helping us try to find ways to a
solution. Thank you very much, Mr. Chair.
AMY MCLEAN SALLS: You’re welcome.
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SENATOR NEEDLEMAN (33RD): Thank you,
Representative. Anyone else? Thank you so much.
Dave Sutherland. Good evening.
DAVID SUTHERLAND: Thank you, my name is David
Sutherland and I am here today on behalf of the
Nature Conservancy to discuss Bill 7251.
And I think it is important to not conflate net
metering with incentives. RSIP is an incentive and
as a couple of other speakers have pointed out, it
has been ratchet down appropriately so, 12 times I
think in the last six year. And net metering again
there are quite a few studies and I referenced one
of them in my testimony my testimony that have shown
that net metering is a net benefit to the whole
system. You can disagree with some of those but
there have been quite a bit of studies on that and
it is an open question.
So, we’re in favor of keeping net metering in place,
reversing last year’s provisions in Section 7 of PA-
1850 and then ratchet down RSIP. Don’t stop it
completely but keep ratcheting it down, we think
that is the appropriate way to sort of deal with
incentives. An on the issue of incentives, I didn’t
include this in this years’ testimony but in my
testimony on Senate Bill 9 last year, I quoted an
article from, it’s called “Incentives for Energy
Production.” It’s on the website for the Nuclear
Energy Institute, “All electric generating
technologies have received various levels of
financial incentives from the Federal Government.
For decades the government has provided incentives
to support research, development and deployment of
energy technology.” I then also referenced a 2015
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report by the U.S. Treasury Department that noted
that, “The United States Government has identified
11 Federal fossils fuel production tax provisions”
and over the last century quite a few of these types
of energy sources have received state subsidies as
well, especially if there is an economic development
or job creation angle on it.
So I think if you look at the overlap between people
who directly or indirectly pay federal taxes, and
the people who directly or indirectly pay electric
rates there is quite an overlap. So for the
purposes of this argument there have been subsidies
for all electric generating sources over the past
century either from tax benefits or rate payer
subsidies. So solar is a very new industry compared
to most of these other sources or you are talking
about nuclear or hydro or fossil fuel plants, so we
think it is very appropriate that they get subsidies
and that they be handled very strategically. Thank
you very much.
SENATOR NEEDLEMAN (33RD): Thank you, David.
Anybody have any questions? Gettin off easy. Thank
you and for staying too. Donna Carroccia. Welcome.
DONNA CAROCCIA: Thank you all for the opportunity
to testify before you today. It is good to see you
all again. Last week seems like it was just
yesterday. My name is Donna Hamzy Carroccia and I
am speaking today in support of House Bill 7115 on
behalf of CCM a statewide association of
Connecticut’s Towns and Cities.
CCM appreciates the Committee for raising this Bill
and recognizing that virtual net metering is an
important program that many municipalities have
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benefited from and would like to benefit from into
the future. We support the expansion as mentioned in
the Bill however we would ask that the Bill go
farther in eliminating the cap and then to also
eliminate any of those buckets particularly the
state bucket and agriculture buckets and industrial
buckets and instead create an open program that
would allow for more first come - first served
program that would create some flexibility and also
I think expand the virtual net metering option for
municipalities in this case particularly.
I will stop there because it has been a long day so
if you have any questions, feel free to ask.
SENATOR NEEDLEMAN (33RD): Thank you. Yes,
Representative Steinberg.
REP. STEINBERG (136TH): Thank you, Mr. Chair.
Thank you for testifying here today. You made
mention of the arbitrary buckets the legislature
created in order to encourage more activities than
virtual metering across a couple different areas.
And you also make mention of your desire to have the
cap eliminated altogether. Help us understand why
that would be a good thing. I’m aware that for
example, that there are municipalities that had
contemplated putting forth proposals to do virtual
net metering projects but chose not to because they
felt that the cue was so long that there would be no
prospect of them getting in under the cap. Are you
aware of roughly how many municipalities in the
state have indicated interest either have joined a
que or chose not to based upon the limits that we
currently put with the cap?
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DONNA HAMZY CARROCCIA: Thank you, Representative
Steinberg and thank you for your leadership on this
issue. I do not have a specific number for you but
I did know that you were going to ask that question,
I had a feeling. But I will absolutely get you that
information in a survey of our membership.
REP. STEINBERG (136TH): Thank you, yes. Cause my
understanding is we’re talking about scores
potentially of communities in the state that would
be interested in doing so if the cap was lifted and
it is very hard to figure out where the cap ought to
be not knowing how many municipalities might be
interested in the order of magnitude of their
projects that they are, you know, maybe a megawatt
or more in some of these cases they could
potentially hit another cap really fast and that is
perhaps a better argument for no cap at all. Thank
you very much, Mr. Chair.
SENATOR NEEDLEMAN (33RD): Thank you. Yes,
Representative Ackert.
REP. ACKERT (8TH): Thank you, Mr. Chairman and
thank you for being here and sticking it out also.
So are we, how quickly do we get to the $10 million
dollar do you know that and hope we get to $20
million dollars would we cap it? I’ve been in
support of having no tranches but I think maybe we
can do it a little bit differently if one group gets
to it, one hasn’t used it type of thing that they
can jump into that because the state wasn’t using
their at all. So the Ags and municipalities were
getting there and the state was using nothing why
don’t we just give it to them. And they’re like,
no, no, no. So maybe you don’t know the answer how
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quickly we get to the ten and is 20 unreasonable.
Granted we always have caps, there always seems to
be some around here, so is that an approachable
number you think especially with the municipalities?
DONNA HAMZY CARROCCIA: We absolutely support the
$20 million dollar expansion I want to be clear. I
know that lifting the cap is a big ask. But I do,
opening it up absolutely will free up the state’s
credit as mentioned that we’re not using and I do
think that there are, there is a potential for
municipalities to eat up a lot of that $20 million
dollars, there’s a big interest I think on behalf of
towns that create some energy efficiency where there
might not be some now with the cap.
REP. ACKERT (8TH): Thanks. I do want to make sure
I’m protecting agriculture so I wouldn’t want it to
be that, you know, first in option cause, you know,
municipalities, you know, staff whatever it may be
could apply much quicker than maybe an Ag tranche so
I would say that we would need to keep some kind to
make sure there is some still designated but if one
group is not using theirs type of thing that the one
group that maybe moves quicker could get it,
something like that.
DONNA HAMZY CARROCCIA: I appreciate that.
REP. ACKERT (8TH): Thanks for being here and you
know I think the dialogue would be important so
thanks.
SENATOR NEEDLEMAN (33RD): Thank you. Anyone else?
Have a lovely night. I missed somebody, Claire. I’m
sorry it was written to the right in the column.
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CLAIRE MIZIOLEK: No problem, glad to be here. I’m
Claire, I’m sorry. [Laughter] No, I’ Claire
Miziolek and I am with Northeast Energy Efficiency
Partnership and I am really glad to be talking to
you guys and I’m really, really impressed with
everybody who is in here. I’ve been in this
building since about 8:00 a.m. and I am sure plenty
of people have been here longer and it is impressive
that you guys are still going. You have stamina here
in Connecticut.
So I work regionally throughout the Northeast and
Mid-Atlantic. We are a non-profit and we are here
to advance energy efficiency and I actually work a
lot with different businesses and manufacturers of
different products to help them grow those energy
efficient products, make them more available and
work with the utility programs but I also work on
the appliance standards side because that has been a
really winning strategy, bipartisan supported
strategy to get energy savings and one of the
cheapest ways to achieve major energy savings.
So I am here to talk about 7151. You guys have seen
it. It clocks in at 29 pages here which is pretty
impressive and very long so I would like to
volunteer anyone who has any technical questions, I
know there were questions earlier about the
penetration levels of certain products and a little
bit about how products come into markets and things
like that, that is what I love to answer to you but
I’d also like to let you know there is a couple of
handouts that folks at DEEP have helped put together
that kind of provide a little bit of color
commentary to this issue and these will be
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distributed after the fact so folks can see it and
have the information.
I was planning to comment and tell you guys that
this is kind of a winning strategy that, you know,
win, win, win for customers, good for utilities,
really great for the environment, you have water
savings, energy savings, gas savings which results
in carbon savings certainly. All that is very true
however I am realizing that it is the end of the day
and time is short and I know there has already been
some folks who spoke in opposition to the Bill and I
anticipate there might be some more folks speaking
out after me and so I just want to point out a
couple of things about the nature of the Bill.
So quickly the idea is that Connecticut would be
passing a set of new appliance efficiency standards
for products that don’t have standards federally.
That doesn’t me they don’t have standards at all and
many do in fact have California standards. There
was a comment earlier that the computer standard
would be problematic and really unnecessary because
it already has the benefits of the California
standards in Connecticut are already being reaped.
I’ve never been able to see that data, we’ve asked
for that data to be supplied showing us that what is
sold in Connecticut is completely compliant with
what is in California and when the regulations would
be written they would be pointing to that California
list so they wouldn’t be asking manufactures to
comply or additionally provide anything. They’d
essentially be saying if you are on the California
list you’re good in Connecticut and that basically
locks in and makes sure that things sold in
Connecticut. That does mean there would be a
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legacy, older products that maybe less efficient or
some manufactures maybe aren’t members of the major
trade groups but are still potentially producing
inefficient technologies, those would not be for
sale. And so there is still a lot of benefits left
to be had.
Just a couple of things I wanted to point out, kind
of a counterpoint to earlier testimony around the
energy savings that happened in the electronics
industry, we’ve seen that kind of across the board
in homes and businesses a lot of things have gotten
a lot more efficient. A lot of this actually behind
the scenes due to energy efficiency standards and
earlier it was quoted that, you know, no standards
were involved for the electronics, that is not
actually true. We found battery chargers, we have
external power supplies, the power bricks, that
wouldn’t be necessarily the manufactures of the
products are focused on but those provide huge
energy savings and are covered federally. There
were television standards in a lot of different
states. So these are actually happening behind the
scenes and have brought a lot of the benefits
forward. I think that it is, I know I heard the
buzzer, and I don’t want to keep anyone here any
longer than I have to although I know you guys still
have a long night ahead of you but I really want to
say. Oh, just on the states, and reiterate that
Massachusetts, Rhode Island have just actually
introduced it today, Maine, New York is planning to
do it the governor stated it. These are all states
that are planning to do this and I know DEEP is
really eager to make any adjustments or compromises
to really work with this Committee to get this Bill
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right and make it happen for Connecticut so that
there $80 million dollars in annual savings and
ultimately huge energy and water and carbon savings
do get realized. With that, I’ll see if there are
any questions. I’d love to handle technical
questions on anything, I’ve got a lot of fact sheets
here if you want em. I’ll stop talking. Thank you.
SENATOR NEEDLEMAN (33RD): Wow! [Laughter]
Representative Ackert.
REP. ACKERT (8TH): I’m glad you got that much
energy and I appreciate you bringing that to us. So
you mentioned a couple of things. Other states
similar in New England have this language, similar
language.
CLAIRE MIZIOLEK: Yes, so the way it was
established, by colleague from Appliance Standard
Awareness Project mentioned it before. Her
organization put together a package of 18 standards
and a model set of them and states have basically
taken that package and they might leave one thing
off here or they might just take this part of it but
it is all based on the same set of standards. What
you look at in Rhode Island for example there are 17
standards there and it is all but one of these
products that they are introducing. The one that is
being left off in Rhode Island is air purifiers,
that is one that is the only product that does not
have a standard right now. Vermont passed all of
these except for air purifiers last year and the air
purifiers is based on an EnergyStar level so it
hasn’t been codified in state standards. I know
there are some concerns about health and the cost
associated with them although in doing further
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research we found some similar reports that says a
cheap air purifier is doing nothing to clean your
air and you’re wasting a lot of energy and money on
operating it so they still make sense of standards
though I know I think DEEP and hopefully the
commission of the government so it’s open to
reaching compromises there if that makes sense. But
yeah it’s the same set and each state is kinda
taking their own, a little bit of their own twist on
it but just about identical. I should mention
Washington State, Hawaii, Colorado, Illinois are
also pursuing it but they are outside of the region
so I’m not as up on them.
REP. ACKERT (8TH): There is ton of definitions
here, we’re up to 80 something different definitions
and so the reason why, you just mentioned the number
80 million could you respond to what that 80 million
is.
CLAIRE MIZIOLEK: Sure, yeah. So of the, so I
should say the definition, I know I heard you say
that a couple of times about the 80 definition so
Connecticut has been a leader in states historically
and so the higher suite of definitions and what is
in these 29 pages are all these distinct standards
that are already on the books for Connecticut plus
these 17 new ones so we are only focused on the 17
new ones because the savings from the other ones
have already happened and calculated utility bill
savings for the State of Connecticut for the 17 new
standards if $80 million dollars annually and that’s
if the standards go into effect in 2021 and that
number is how much would be achieved in 2025. As
they sell through it takes a little while for the
savings to be kind of realized is because people
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aren’t just going out, you know, January 1, 2021 and
buying all new everything. So it takes a little
while, actually by 2035 the standards grow, they
basically double the savings because by then just
about all the stuff has switched over. So the
annual savings and I will say that those are, we
uploaded in the testimony but we will also make hard
copies available.
REP. ACKERT (8TH): So the $80 million dollars, you
said from 2021 to 2025.
CLAIRE MIZIOLEK: Right, annually in 2025.
REP. ACKERT (8TH): Annually in 2025? Thank you.
CLAIRE MIZIOLEK: Yeah so it takes four years
basically. After four years.
REP. ACKERT (8TH): They gotta break. Some gotta
break, gotta buy something new. Okay, thank you.
Thank you, Mr. Chairman.
SENATOR NEEDLEMAN (33RD): Representative Buckbee.
REP. BUCKBEE (67TH): Thank you, Mr. Chair. And
again the energy if we could bottle it, it seems to
be unbelievable and I guess when you wait the entire
day to get your three minutes you’re gonna have a
lot to say. So that’s good, thank you for your
energy. So I just really have one question. I
questioned earlier if, since all these products are
available currently and labeled properly and are
already out there, my question is if there is, in
your opinion, I asked someone earlier if we need
legislation on it if it’s just a choice, and part of
that to its California law, Connecticut law which
ever it might be most people are, I mean the online
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market owns it all anyway so most of it is being
done through online orders, the Amazons of the
world, so does it impede on your choice on what you
want to use for a product, where you want to go and
the product you want to buy. I mean if your are
gonna buy a faucet you want to see what this flow is
on this faucet when you go to buy the faucet. The
same with the lightbulb, whatever it might be. So I
guess that’s my question, is you see this as being a
hinderance to that free market?
CLAIRE MIZIOLEK: Yeah, so most of the products
have really high compliance already with the
standards so we’re really talking about removing
mostly older, like I guess ST versions of the same
equipment the ones that are still available for sale
and to the online question, online retailers and
retailer are the same. The law would affect them.
But in terms of limiting sale there certainly on
it’s face was happening, if you have ten options and
two of these are really inefficient we are actually
not goin to allow that to be an option, then you
only have eight options. With that being said,
that’s the kind of numbers we’re talking about where
you still have a huge, thousands of products
available that meet each of these technologies that
meet these specifications so it’s less availability.
That would be a lie if I said it wasn’t, that’s how
the standards work. However so a huge range and
kind of healthy market share and have the research
backing it up.
REP. BUCKBEE (67TH): Okay, so I guess a quick
follow up about that then. For that person who,
that business who owns some of that outdated stuff
and wants to sell it cheap, that kind of thing, they
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are in a tough spot now, right because that can’t
really highlight that product to be sold in the
state, so would it be better as opposed to a law
that says you have to sell the standard to, there’s
a benefit to buying that standard. There’s a
benefit to it as opposed to it. You know, I guess
it kinda comes with the territory. I’m not big on
instituting new laws or forcing the customer to buy
anything a certain way but do you think that would
be a better proposal for this than a forced purchase
of this product or that?
CLAIRE MIZIOLEK: Yeah, so from my perspective this
is really, this is taking out the worse performers.
It is not even limiting good options, it’s taking
away the bad, the bad ones that consumers on their
surface don’t really understand. You mentioned
labeled products and unfortunately that is really
not the case, it’s not products that are covered
federally so they don’t have kind of a universal
federal labeling. The ones that meet an EnergyStar
certification or WaterSense certification those ones
do but the other ones that lack it the customer may
not even realize that they should be looking for
something that they don’t see. So in terms of the
policy, all of the levels have been pretty
exhaustively selected based on their, not negatively
impacting consumer availability and making sure that
there are plenty of options across different
technologies. I will say that the idea of providing
benefits and, you know, looking at the high
performers and EnergyStar most efficient or really
what the utility programs are doing is providing
incentive is great and I spend most of my day
dealing with that world. Unfortunately not everyone
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knows about that. You know it’s renters as well as
low income customers who are just given something
and they don’t realize that, you know, they have to
pay for the monthly utility bill that they didn’t
actually buy the thing in the first place and so
they’re the ones that are, you know, most negatively
impacted with some of these really inefficient
products that are out there. So a lot of it is, if
there was transparency I think there would be no
need for it but unfortunately that is not the
reality.
REP. BUCKBEE (67TH): Yeah, thank you. I’m still on
the side of education being the key component to
this that people really need to be self-educated on
it and I’d rather see more energy put into that
education than I would into forcing, you know, what
people cannot buy whether it is a high producing
value to what it is, there’s still some business
owner with a warehouse full of em now who can’t seem
em in Connecticut if that is gonna be the case.
CLAIRE MIZIOLEK: Yeah, I will say there is no one,
no local customer, no local businesses in
Connecticut who’ve come forward actually only folks
that we’ve seen come forward against these are the
national trade organizations representing
manufacturers who are working international. You
know these are the big trade associations and they
don’t really have the little guys in many cases. So
if that is a true issue, then I think I know that
DEEP would be open to making, you know, making an
arrangement or maybe there is a product category
that really specifically affects Connecticut and
maybe that makes sense, you just take it right out
and I think there could be a solution there but no
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one has said that and I will say compared to
something like a utility program this is basically
the labor that goes into this work. Now DEEP will
have to write some regulations, have some staff time
that goes into it but it is essentially a free Bill.
Writing regulations and having them on the book as
opposed to something like an incentive program where
you’re pumping millions of dollars to provide those
customer incentives, it’s a much, its frankly
cheaper, more cost effective way to achieve a lot of
these energy savings. I think both of them
operating in parallel is kind of the best way for
Connecticut to reach it’s goals.
REP. BUCKBEE (67TH): Okay, thank you. Thank you,
Mr. Chair.
SENATOR NEEDLEMAN (33RD): Okay thank you. Anyone
else? Great, thank you for your patience tonight.
CLAIRE MIZIOLEK: Okay, thank you. Good luck with
the rest of your day.
SENATOR NEEDLEMAN (33RD): Michael Boucher.
Welcome.
MICHAEL BOUCHER: [20 seconds of blank recording]
meetings over the last two years. More than two
years ago I stood here to testify for ratepayers
supporting action to reign in CMEEC. CMEEC fought
these actions claiming they had everything under
control. They claimed proposed Bills would cause
CMEEC a significant financial harm. Now I stand
here again and ask the State of Connecticut to
protect ratepayers and reign in CMEEC.
In these short two years much has changed. It is
the ratepayers who have suffered financial harm.
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The Kentucky Derby trip, Greenbriar golfer’s trips
have cost ratepayers well over $1 million dollars.
The fallout cost from these trips will exceed the
cost of the trips themselves. Five derby
participants face federal corruption charges.
Another derby participant faces federal narcotics
and money laundering charges. Numerous officials
from Norwich to Groton were found guilty of ethics
violations but the problems go much deeper than
these lavish trips.
With few regulations and no oversight ratepayers
were forced to fund what was described in a local
newspaper as essentially a slush fund buried in
CMEECs budget. There are many such funds. CMEECs
Economic & Development Fund and Rate Stabilization
Funds were used to cover losses of millions and a
sale cabled utility company run by Groton Utilities.
Almost $40 million dollars was lost and the public
was never told until the cable utility was ready to
be dumped for pennies on the dollar in 2012. Groton
Utility ratepayers are still paying millions every
year for those losses through their electric rates
and will do so for many more years to come.
How about jobs? One 2016 derby participant then
also had in son-in-law invited to the derby. That
son-in-law soon had a job at CMEEC. Another 2016
derby participant who is a CMEEC Board Member also
has a son who started working at CMEEC soon after
the 2016 derby trip. Even though the failed GU
cable company was sold, ratepayers and taxpayers had
been denied FOI requests to review the financial
reports due to trade secrets and business
strategies. Really, this is not trade secret and
business strategy how to lose millions every year.
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Now you understand the need to stop CMEEC from
running any business other than local power electric
suppliers. Ratepayers cannot afford to pay millions
extra in failed projects.
A forensic audit which should have been started back
in 2016 leaves only more questions than answers.
Yearly audits have also left more questions than
answers on why the margin fund and the contra-margin
fund which the yearly auditor new about were not
more closely looked at. The number of insiders
knowing about the derby trips is shocking but no one
had the moral compass to stand tall and raise
concerns. Are ratepayers any better off today? Two
weeks ago at the Groton Utilities Commission
Meeting, the new interim CEO Mike Lane said, “Really
no new news out of the forensic examination?” No
questions were asked about what was going on at
CMEEC by the commission members. Political
appointments to the utility commissions and
ratepayer representative positions on the CMEEC
Board do more harm than good.
Two weeks ago at this meeting, Groton Mayor Keith
Hendricks and our GU Chairperson and member of the
CMEEC Board was at this GU meeting. Neither he nor
Mike Lane brought up all the new information about
questionable spending by CMEEC uncovered in the
forensic audit. Last week at CMEEC the Board Meeting
under public comments consumer bill advocate voiced
concerns about the more questionable spending CMEEC
uncovered in the forensic audit. Kowalski requested
an itemized list of expenses for which the auditor
could not find a legitimate business purpose. Why
is CMEEC downstream payers subsidizing CMEEC staff
closing for purchases, Kowalski asked. CMEEC and
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its member utilities still have a serious problem
with truth, transparency and accountability.
Everyone had a great time at the derby. Those that
face federal charges, those that may face federal
charges, CMEEC and municipal utility employees,
local politicians, vendors, friends, relatives and
other guests, even a CMEEC lobbyist here at the
state capital enjoyed a lavish Kentucky Derby trip.
Bill number 96 must be passed. We need third party
oversight of CMEEC operations. Ratepayers need
protection and we need the expertise and hard
driving work of consumer advocate Bill Kowalski for
many more years. CMEEC can succeed and provide
value but the ability to charge ratepayers extra to
support various funds will cause CMEEC to fail again
and again. Unsupervised kids in a candy store will
continue to fill their pockets anyway they can
because it is that easy. That is my opinion from a
ratepayers perspective. Thank you very much.
SENATOR NEEDLEMAN (33RD): Thank you so much.
Anybody have any questions? Senator Formica.
SENATOR FORMICA (20TH): Thank you, Mr. Chair. Good
afternoon, sir. Have you been here this afternoon
hearing the testimony of all of the proponents of
CMEEC that said rates are the same and going and the
benefits of the organization? You seem to be
painting a different picture.
MICHAEL BOUCHER: I am painting just a more complete
picture. I think you’ve heard the arguments about
rates, the comparison, Bill Kowalski has brought
this up, the comparison to Eversource is probably a
false comparison and they are asking for better
comparisons of other public utilities our consumer
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advocate is. So when they say they are saving 20-25
percent that is comparing it to Eversource and that
is not really a true comparison. I would get more
information from Bill Kowalski the consumer advocate
on that. But it is not a fair comparison.
SENATOR FORMICA (20TH): Thank you very much. I
thin we’ll follow up with that. But I think we did
ask some pretty tough questions of them today and
made some statements on the record with regard to
our belief about what’s happened over the past and
we apologize to the ratepayers for that but we are
ferreting that all out and I think the answer is
somewhere in between what they want and perhaps
what’s written in 961 but I think we need to come to
an answer so I agree with you 100 percent and I
thank you for taking the time to be here today and
share your testimony.
MICHAEL BOUCHER: I am concerned with the, Mike
Lane’s inability even two weeks ago to talk about
the new forensic examination and the other expenses
that were questionable. He didn’t bring that up and
had to be brought up by our consumer advocate at
CMEEC meeting a week later. So they knew about this
but they still didn’t want to talk about it in
public. And the other grave concern I have is as
far as the indemnification issue at a recent Joint
Governance Committee I attended, while the
conversation centered on indemnification a Board
Member stated where’s the effect, the whole idea is
to settle without pleading guilty. As a ratepayer
who does not want to pay legal fees so this concerns
me very much and I think there is an attitude inside
of CMEEC you’re just not getting a grasp of because
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you’re hearing from CMEEC and your are hearing the
bright side of the story.
SENATOR FORMICA (20TH): I think quite frankly the
hearing that we had last year with the Director of
CMEEC gave us a full flavor of what it is and that
is what predicated the legislation that we passed
last year and this legislation at some of the
outrange that was exhibited by Senator Somers when
she testified. So I think we’re there. You know, I
think we want to make sure we have a solution and
that the solution is not worse than the problem and
I think that is what we’re trying to balance so I
appreciate you telling us where we need to go and I
couldn’t agree more. I think, yeah, were getting
closer and one of the answers part of this Bill that
I like is the Auditor of Public Accounts. I think
they maybe able to a third party that might be able
to help us maintain stability moving forward. But I
thank you very much for your testimony and please
feel free to keep in touch with my office moving
forward. I don’t know if Mr. Chairman has any more
for you.
SENATOR NEEDLEMAN (33RD): Thank you, Senator. A
little contest going on over here. Representative
Buckbee followed by Representative Lanoue.
REP. BUCKBEE (67TH): Thank you, Mr. Chair. I don’t
even have a question for you, sir. I guess I do.
You don’t represent any organization except
yourself? Am I correct in that? You’re not here
from a group or an organization.
MICHAEL BOUCHER: Myself and the other ratepayers
who have concerns about what’s been going on, not
organized, no.
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REP. BUCKBEE (67TH): Right and thank you for that.
We sit here all day and people talk about, you’ve
been here all day. You came up, you signed up, this
is what the whole thing is all about and to me this
is the inspiring moment you took the time, you took
the day, you came up here, you told us your story
and it’s a lot of times we see a lot of different
groups here. I’m not saying you’re the only one
that does this but we see a lot of people who are
lobbyists and their different organizations doing
what they need to do and doing their job and doing
the job well. But to see a constituent come up here
and sit down with us and go through the process and
sit her on the sidelines for the day and listen to
everybody else, I certainly commend that and thank
you for doing that.
MICHAEL BOUCHER: Thank you for taking the time to
listen. It is an important subject to me.
REP. BUCKBEE (67TH): And you know that’s what’s
important to us, I think and you hear politicians
saying this stuff all the time but that is super
important to us. I know I can speak for myself only
but to have somebody come up, that you know, wants
to state their mind, speak their piece, and is
willing to spend the entire day sitting in a room
listening to a bunch of people go on and on about
topics you’re not concerned about, God bless, I love
seeing that. Thank you so much. Thank you, Mr.
Chair.
SENATOR NEEDLEMAN (33RD): Thank you,
Representative. Representative Lanoue.
REP. LANOUE (45TH): Thank you, Mr. Chairman. Let me
echo the comments of Senator Formica and
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Representative Buckby and commend you for being here
today. I certainly have share your outrage and
others. When I questioned the Mayor, you know,
earlier and it’s very disturbing to me when you see
ratepayer dollars abused at the Kentucky Derby,
Greenbrier and some others. I guess a question I
would have for you, sir is going forward what would
you like to see as the biggest reform if you were
crafting this legislation, voting on it, what would
you like to see as the biggest reform going forward
for CMEEC?
MICHAEL BOUCHER: Two points, the continuation of
the consumer advocate position and I don’t
understand what the big deal is but the third party
oversight. If somebody has big brother watching
them, they are not gonna abuse the funds that are
available to them and it’s really that simple, third
party oversight. You have to answer to a higher
power. CMEEC has to answer to a higher power. They
cannot contain or control themselves. It’s just too
much money, to easy to spend, to easy to get.
Anyone is gonna do that.
REP. LANOUE (45TH): Thank you for that answer. I
appreciate it, thanks.
SENATOR NEEDLEMAN (33RD): I want to thank you and I
want to echo what Representative Buckley said, this
is, you’re the only one that I think we’ve spoken to
tonight that doesn’t get paid for being here. So,
you did a yeoman’s job spending the entire day
listening to all this testimony and thank you for
birddogging their Board Meetings cause that’s
probably no easy task either.
MICHAEL BOUCHER: No, it’s not.
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SENATOR NEEDLEMAN (33RD): Thank you. Sarah Pierce.
Good evening, almost evening.
SARAH PIERCE: Almost evening, 5:48 I guess you can
call that evening. We would in the Midwest anyway.
All right, well good evening Members of the
Committee. Thank you so much and I do want to echo
the compliments of having the ability to stay here
and be thoughtful. I think thoughtfulness, I’ve
noticed all day is really surprising in a very
enriching and, you know, great way so thank you so
much for that.
Sarah Pierce here, I’m the Director of Government
Relations for the Association for Home Appliance
Manufacturers. I appear today to strongly urge the
Committee to oppose HB 7151 the Act concerning
appliance efficiency standards. HB 7171 has a
number of problems relating to home appliance
products most importantly this Bill would remove
from the market products that would adversely harm
low income populations particularly those who suffer
from asthma and allergies.
My comments and opposition to this Bill will touch
on the following: Expanded Authority for DEEP
regarding Energy Efficiency Standards and energy
savings for air purifiers, portable air conditioners
and commercial clothes washers which are the only
products in this Bill that I represent in the member
companies that AHAM represents.
So first, Expanded Authority on Energy Efficiency
Standards. We strongly oppose the Bills continuance
and expansion of DEEPs authority to establish new
standards for any new product at any point in the
future. H.B. 7151 continues an unrealistic one-year
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minimum time period for companies and manufacturers
to redesign a product. The DOE standard is a
minimum of three years just so you have a reference
point.
Now on to energy savings. The goal of saving energy
is important but it should not be considered
irrespective of other consequences such as impact on
healthy indoor air quality and product availability
to lower income and disadvantaged populations. So
first: Air Purifiers/Cleaners – This Bill would harm
low income and disadvantaged population by requiring
that air purifiers meet the ENERGY STAR minimum
standard and it should be deleted. No other state
has established this type of standard for air
cleaners, and for very good reason. It is not in
the Vermont bill, it is not in the Rhode Island
bill. It is not in the Rhode Island bill because we
went to Rhode Island last year and testified to the
consequences that this Bill would have to those
populations. California does not cover air
purifiers. They studied this issue many years ago
in 2004 and they elected to not put a standard out
for air purifiers for this very reasons. For many
people including most importantly the low income
segment as I had just mentioned, air cleaners are
purchased for health reasons and I’ve included a
report that shows that the standards that HB 7151
proposes could destroy retail price points for units
under $50.00 dollars and those between $50.00
dollars and $100.00 dollars. This is likely to have
a profound effect on consumers who depend on some
availability of smaller air cleaners with a lower
clean air delivery rate value. This would be a value
that measures how clean your air is. This is the
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important value when you’re looking at your air
cleaner not whether or not it is an ENERGY STAR
rated or not. This may be especially true for those
consumers as I said over and over at those lower
price points.
The second point here is establish an ENERGY STAR
level as a mandatory minimum completely and utterly
undermines the ENERGY STAR Program. ENERY STAR was
created to acknowledge and highlight the top 25-30
percent of the most efficient products in the
marketplace, only 33 percent of air cleaners are
already rated at ENERGY STAR levels so that would
eliminate 66 percent of air cleaner products from
the Connecticut market unless they are purchased
through the internet thereby negatively impacting
brick and mortar retail stores. On portable air
conditioners, there is a compromise on the Vermont
Bill that was passed last year that we were neutral
on. We prefer portable air conditioners be
regulated by DOE that is caught up in litigation
currently but we would prefer to have preemption for
that product at the federal level.
Then on commercial clothes washers, the Bill is
referencing compliance to a California standard that
has been preempted by the Department of Energy and
so at the very minimum if you’re gonna keep this
particular product in your Bill, it should actually
be updated to reference the proper Statue.
There’s a few other things maybe we could talk about
in the Q&A that the DEEP Commissioner referred to
about the legislation but I just prefer maybe to
have a back and forth if there are any questions at
this point. Thank you very much.
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REP. ARCONTI (109TH): Thank you for your
testimony. Any questions from Committee members?
Representative Ackert.
REP. ACKERT (8TH): Thank you and Sarah, right?
SARAH PIERCE: Yes.
REP. ACKERT (8TH): So thank you for testifying.
What products do you, you’ve got you say AHAM which
covers all, it’s like a lot of.
SARAH PIERCE: Sure, it would be major appliances,
portable appliances and floor care. We do have eight
companies here in the State, Whirlpool Dyson, Helen
of Troy, I-Robot, just to name a couple household
recognizable names.
REP. ACKERT (8TH): Okay and I asked the DEEP
Commissioner at the time, I have concerns, not
saying that because I know that, you know I’ll go
into a store and there will be a $99.00 dollar, you
know, microwave. Probably not high efficiency type
of thing and things like that. So sometimes I look
at, you know, we don’t price out, someone loses a
refrigerator and this is the example. The
refrigerator goes out, right and are we pricing that
and granted we don’t want, we would like to have a
high efficiency product as possible, somebody
mentioned that well over the life of it you’ll get
your money back. But on that day I’ve got enough
money to buy that one, that low, the cheap stove.
You know with the electric burners on top that you
know is not energy efficient, but you know, at all
but that is what they can afford. Are we in that
market, you said three years to develop a product or
to get into the stores kind of thing?
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SARAH PIERCE: That would be a redesign, retool so
there would be a new standard that would be put in
place so your examples of a stove or a refrigerator
are regulated by the Department of Energy through
the Federal Appliance Standard Program so there is a
minimum standard required for all products. So that
is your floor and what you would see manufacturers
do which would actually go to another question that
you had asked the Commissioner and just kind of
easily fits in here, is that products are, there is
more than one model of a refrigerator, right, and so
we have a lot of different designs and features that
consumers have access to and so depending on the
design and the feature that is what is going to
dictate your price point. Your price point is also
dictated to a certain extent by that minimum
efficiency standard just as it’s dictated when you
are buying a refrigerator that is rated at ENERY
STAR. So you have options. So if it’s not static
but there is a baseline that you must meet and so if
you’re thinking about then looking at products where
you want to establish a baseline minimum that is
ENERGY STAR that is completely undermining the whole
point and spirit and intent of that program which is
to make something more efficient than what that
baseline level that you have out there. And so
you’re creating different points at the market at
which consumers can make their own decision to chose
and of course as I think has been noted by others,
there are labels on those products that will help
consumers understand that.
REP. ACKERT (8TH): Thank you for that
clarification. I would just trying to get to the
point that, I mean, you know, as long as in this
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direction that we’re moving to try to get things as
efficient as possible, I didn’t notice like an
appliance but a water heater. I didn’t see water
heater in here at all. Electric water heaters are
like the worst energy hogs that I could ever think.
SARAH PIERCE: We don’t represent those.
REP. ACKERT (8TH): You don’t [Cross talking]. It’s
not an appliance right?
SARAH PIERCE: But maybe if I could just, but also
remember that energy efficiency also is a
competitive tool for manufactures so I’ve heard a
few themes here that a manufacturer could produce
something that is less efficient because they
weren’t a member, I think she said, of a trade
association and I was very confused by that because
again these are competitive tools and ENERGY STAR is
a competitive tool. Companies are in that game
because they want to be putting the best out there
and they want consumers again to have choice. So we
don’t want to limit choice and, you know, just to
reference something else.
Products, there are two different things, there are
covered products at the federal level and there are
products that aren’t covered at the federal level
which means they won’t be subjected to that federal
appliance standards program. So our products that
are in this Bill are not covered as a DOE covered
product. So I just want to make sure that we are
not doing apples and oranges and we’re doing oranges
and oranges or bananas and bananas or whatever you
want to say but just keep that in mind as well is
that these products aren’t covered products by the
DOE at least the ones that I’ve talked about today.
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So except the commercial clothes washer, excuse me,
but just keep that in mind is that they’re not
acting in these areas because they haven’t
determined those products to be part of that
program.
REP. ACKERT (8TH): Thank you for your responses.
Thank you, Mr. Chairman.
REP. ARCONTI (109TH): Representative Buckbee.
REP. BUCKBEE (67TH): Thank you, Mr. Chair. Thank
you for the testimony. I’ve been waiting to hear
that kind of thing, you heard me say it earlier and
I’ve been kinda waiting to hear that all day.
SARAH PIERCE: I’ve been waiting to tell you
[Laughter].
REP. BUCKBEE (67TH): Thank you. Is there any piece
of this on this Bill, this legislation that you
think is important for us to put forward as opposed
to suggestions on what might, from what I see again
what someone with a warehouse full of product out of
business in the state, is there anything that stands
out a necessary to you?
SARAH PIERCE: I think the market has been very
effective at dictating products that manufacturers
are gonna deliver to consumers and on other issues
I’ve testified before around the country that
particularly for home appliances, we are, we have
such a close personal relationship with the
consumer, the consumers tell us what they need and
what they want and we respond obviously as long as
we are in compliance with the laws and the
regulations but for us it makes very little sense to
have a patchwork of state laws. You cannot
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manufacture and design and innovate when you have a
separate law in Vermont, a separate law in
Connecticut and Rhode Island. These three states
are incongruent today and I know you’ve heard these
assurances that everything is the same except that
it is not. And all three of those bills are
different and so what are manufactures going to opt
to do? You have to ask yourself that question, what
is the manufacturer going to decide to do, are they
going to design a product for those, three different
products for those three different states. I mean
how do you, I mean it’s a struggle. It’s a question
you need to think. I’m sorry, I need to encourage
you to think about how that is gonna play out
ultimately and what, you know, ultimately what you
want, you know for the consumers of Connecticut to
have access to.
REP. BUCKBEE (67TH): I would agree. I think it
really handcuffs the manufacturer or the distributor
whoever it might be to limit what they can sell,
where they can sell and different markets because
it’s really a tough thing to tie their hands up that
much but thank you very much. I appreciate your
testimony and willing to hear some more of what the
fun stuff is tonight.
REP. ARCONTI (109TH): Representative Meskers.
REP. MESKERS (150TH): Yeah, I appreciate your
concerns on the regulatory environment. I’m a big
believer in consumer choice but when we sat down
today we had a number of conversations about energy,
about green energy, about efficient production and
lower the carbon footprint. So I probably not going
to sit in agreement with you. I think that we do
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need to maximize the level of choice and price and
choice for our consumers but providing a baseline
for energy consumption and efficiency I think goes
toward fulfilling our standards to get to a lower
carbon footprint. So the real question is what
price point do we set that barrier? If he federal
government doesn’t want to move in that direction to
the extent that we have publicly rated Energy Star,
etc. we have other programs, we are not forcing
manufacturers to produce to a customized range we’re
just limiting the number of products they can sell
within a market where the cost of energy is
somewhere about 20 percent above the national
average because the bottlenecks we have here. So my
concern would be reducing energy costs, if you’re
looking a low income and moderate income households,
if we’re looking at energy assistance programs there
is a purchase price on the refrigerator which I am
assuming is borne by the consumer and then there is
aid provided by the state for their energy bills
which is borne by us. So we can control those
energy costs. I’m in favor of that. So I’m stuck
between where you are in choice and where I stand on
energy efficiency.
SARAH PIERCE: Sure and I think, lets be careful
with the refrigerator example because it is
regulated by the DOE and has been through a number
of different rule makings. A refrigerator in one
year, just aside because you are interested in this
issue, then the amount of energy that the
refrigerator uses in one years’ time is the
equivalent of a 50 watt lightbulb. I mean that is
the bottom, we go up from there and again you have a
number of different models and products that you
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have available to you for that choice. I think with
regard to the air clearer which is our primary
concern in this legislation and we strongly urge
that this be eliminated is that if you’re going to
set the minimum in Connecticut at an Energy Star
level you are taking products off the shelf for
people who likely need them the most and that is a
big concern.
REP. MESKERS (150TH): I would tend to agree with you
100 percent on that. I sure can understand that
totally. I think the other issues and products and
the ratings, I think if we’re not killing choice,
I’m just telling you that.
SARAH PIERCE: Sure, I understand. Thank you,
appreciate it.
SENATOR FORMICA (20TH): Representative.
REP. WINKLER (56TH): That statistic that you just
quoted would that be a 50 watt incandescent bulb
burning 24 hours a day?
SARAH PIERCE: Oh, that’s a good question. I do not
know the answer. If I were to speculate it I would
say probably what the average consumption would be
per household.
REP. WINKLER (56TH): So for a HEPA air filter what
price point would be eliminated if this Bill passed
as is.
SARAH PIERCE: The $50 dollar and under and the $50
dollar to $100 dollars.
REP. WINKLER (56TH): Okay. So basically small
models? Thank you, Mr. Chair.
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REP. ARCONTI (109TH): Any other questions from the
Committee members? Seeing none, thank you for your
testimony.
SARAH PIERCE: Thank you. Appreciate it.
REP. ARCONTI (109TH): Madeline?
MADELINE BUGEL: Great. Mr. Chair, Members of the
Committee. Thank you for the opportunity to give
testimony on House Bill 7151, I am Madeline Bugel
with the National Electrical Manufactures
Association or NEMA.
Our member companies make everything from a broad
range of electrical products, everything from energy
management systems to lighting products to electric
motors to name a few. In the State of Connecticut
our members have a strong presence. About 24 of our
member companies maintain 34 facilities employing
over 3,800 people. NEMA opposes House Bill 7151
which includes language to create unnecessary
standards on general service lamps and high color
rendering in DEX fluorescent lamps.
First with regards to general service lamps or GSL,
they are a federally covered product under the
Energy Policy Conservation Act or EPCA and state
regulation is expressly superseded and preempted by
EPCA. House Bill 7151 explicitly acknowledges that
these lamps are subject to federal preemption.
There has been concern that the lighting standards
are being drastically rolled back at the federal
level. These concerns are unfounded. The Daily
previously published a GFO was not in line with
congresses intent. The rule making now underway to
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make the regulation in line with what congress had
intended.
Second the standards in this Bill for High CRI glass
and lamps would have the effect of banning the sale
of P12 High CRI fluorescent bulbs in Connecticut.
These lamps are often in residential fixtures and
have specific ballast that will not operate properly
with other replacement lamps. This will put an
undue burden on consumer that have fixtures using
these lamps compelling them to purchase a new
fixture when all they want is a new lightbulb. IN
this case the cost to consumers will outweigh the
energy benefits. Additionally the energy saving
being reported by some advocacy groups including the
Appliance Standard Awareness Project are very
questionable. NEMA did a study of their numbers
that they put out in their publication talking about
the energy savings that could be deemed from banning
these high CRI lamps and we found that only three
percent of the energy savings would actually be
realized. So we ask you to consider the burden that
would be put on consumers for the questionable
energy savings with this and also to consider the
legal debacle that could ensue with this GSL
language in House Bill 7151. You must report on
energy efficiency but we do ask you to consider the
other obstacles included in this Bill. Thank you.
REP. ACKERT (8TH): Thank you for your testimony.
Any questions. Representative Ackert.
REP. ACKERT (8TH): Thank you, Mr. Chairman. Thank
you for your testimony. So I read that so the
standard, you’re talking the standard T12 lamp that
I put in my four foot fixture in my basement.
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MADELINE BUGEL: So this is slightly different. It
is a high CRI P12 lamp. Basically it shows the
colors a little bit better. Some people use it in
jewelry and seed cutting things like that. But in
the 90s they were very popular in shop-light
fixtures like in your garage so a number of people
still have them in their homes.
REP. ACKERT (8TH): So color rendering lamp is what
it is?
MADELINE BUGEL: High color.
REP. ACKERT (8TH): CLR color rendering. Yep. So
okay, is there, I don’t know what the market is for
this. I’m trying to think of the color rendering
that you’re thinking of cause I know the color
scale. It is a grow lamp, a daylight.
MADELINE BUGEL: No it’s not a grow lamp.
REP. ACKERT (8TH): Daylight lamp or?
MADELINE BUGEL: No, it’s pretty much your basic
T12, four foot linear fluorescent but it just has a
slightly different phosphorus mix in it, to just
show the colors a little bit better and like I said,
in the 90s the fixtures would be with the
electromagnetic ballast that works with these lamps
were very popular and the fixtures are still going
strong but some of the lamps are burning out.
REP. ACKERT (8TH): Okay, I just can get really
technical cause that’s an area that I understand so
I just kind of figured out, you know, standard T, we
encourage people to get out of T12s and go to either
a T5 or an LED replacement, retrofit which you can
just buy an LED retrofit and put in a T12 lamp
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fixture right. And then the other one was this
general service lamp. It says it is under energy.
What would, could you describe if you know what this
lamp is, the general service lamp.
MADELINE BUGEL: So general service lamp is a broad
category of lamps. So congress put it to DOE to
figure out what a general service lamp is and create
the definition and create a standard on that. The
previous rulemaking was not consistent with
Congress’ guideline and so now they are
reconsidering it to make it more consistent. In
House Bill 7151, 26 types of lamps are listed under
the GSL definition.
REP. ACKERT (8TH): Twenty six different lamps?
MADELINE BUGEL: Yes.
REP. ACKERT (8TH): All right. Thank you for your
testimony. I’ll be interested in lookin into it.
We do a lot with worksite lamp fixtures, things like
that, I don’t think that’s what general service
lamps. I’ll be looking into that. Thank you.
Thank you for your testimony.
REP. ARCONTI (109TH): Okay representative. Any
other questions? Seeing none, thank you for staying
late and sticking with us. Anthony from Signify.
ANTHONY SERRES: Mr. Chair and Members of the
Committee. Thank you for the opportunity Thank you
for the opportunity to provide comments about House
Bill 7151.
My name is Anthony Serres. I am a standards and
regulatory professional, representing Signify, one
of the world’s largest lighting companies. Signify,
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known as Philips Lighting until about 18 months ago,
is a global leader in lighting, employing close to
30,000 people in 70 countries, with the U.S. being
the company’s largest market. We continue to
manufacture in the U.S. and employ about 3,000
people in this country. We are proud to lead the
transformation from traditional lighting to
connected lighting and anticipate all our LED
products will be connectable by 2020. We applaud
the efforts of the Appliance Standard Awareness
Project to reduce our carbon footprint through the
deployment of energy efficient technology.
My comments today are designed to provide further
explanation about some of the lighting products
covered in HB 7151 that you just heard from
Madeline.
High CRI fluorescent lamps in general serve lamps.
As background the Department of Energy exempts high
color rendering fluorescent lamps, i.e. lamps that
have a color metric known as the color rendering
index which is 87 or greater from federal regulation
because at the time the regulations were created the
high CRI lamps could not meets the efficacy
requirements in place.
The linear fluorescent tube is on a path to become
extinct. With the market shrinking every year
according to the data from NEMA, one type of high
CRI fluorescent lamp, the T12 (which is a four foot
tube, an inch and a half in diameter, cannot meet
the current efficacy limits established by the DOE,
because it is not technically possible to make a
high CRI T12 fluorescent lamp that meets the current
DOE limits which are the same limits that are being
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called out in this legislation. Should this bill
become law, it would have the effect of banning the
sale of this high CTI T12 fluorescent product in
Connecticut altogether. Now if T12 lamps are no
longer available for purchase in Connecticut the
consumer may try to substitute a different type of
fluorescent lamp known as the T8 lamp which is one
inch in diameter. Now if you think about a basic
screw in household lightbulb, swapping out an
incandescent bulb for an LED is a seamless exercise.
Florescent lamps however are matched to an
electrical device called ballast which actually
operates the lamp at a specific electric voltage and
current. A T8 florescent lamp will likely not
operate correctly on a T12 ballast creating a lamp
that will not work which leads to consumer
dissatisfaction. The typical consumer will be
forced to incur significant cost to hire an
electrician and either replace the ballast or the
entire lighting fixture if the florescent T12 as a
replacement is not available.
Those more inclined to do things themselves may look
to a tubular Led or T-lead lamp. While there are
available markets very few of these will actually
operate reliably on the ballast typically found in
residential applications. As I mentioned, the older
less energy efficient products are in sharp decline.
We expect in just a few short years all consumers
will have converted with more energy efficient LEDs.
To abruptly ban these products would cause
unnecessary inconvenience and expense for
Connecticut citizen. Perhaps more effective than
regulating high CRI fluorescent lamps would be
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provide additional incentives for the ubiquitous
adoption of LED lighting.
Regarding general service lamps and following up on
what Madeline just spoke about, we wish to point out
to the Committee that the DOE has recently opened a
rulemaking for general service lamp definitions and
will open a second rulemaking to set GSL standards
or efficacy limits. Until the effect of these
actions are clear it might make sense to wait and
see what happens before regulating these types of
lamps.
We would be pleased to work with the sponsors and
Committee to modify this bill. Again, thank you for
the opportunity to participate in today’s hearing;
we look forward to working with you to develop
solutions that will allow the market to phase out
these products in a common sense manner and meet the
energy efficiency goals that we all seek to achieve.
Thank you.
REP. ARCONTI (109TH): Thank you, Anthony. Thanks
for sticking around for your testimony. Any
questions. Representative Ackert.
REP. ACKERT (8TH): Thank you, Mr. Chairman and I’m
looking at general service lamps, right? Standard
incandescent lightbulb in may cases.
ANTHONY SERES: In many cases, yes.
REP. ACKERT (8TH): So, we have drastically
incentivized in Connecticut, LED replacements to the
point at which it’s cheaper than incandescent lamps
in Connecticut. Now you’re with Phillips you said
is that right?
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ANTHONY SERES: Yes, Signify yes.
REP. ACKERT (8TH): So now you barely can go to a
store, a location and buy a T12 lamp. What is the
market share in Connecticut for, how many bulbs are
you selling in Connecticut?
ANTHONY SERES: I don’t have that information, I
apologize.
REP. ACKERT (8TH): We’ve gone to T8 a long time ago
and I really, we were at a facility and I looked up
and they had T12 lamps so I look and see a T12 lamp
and a fixture now a days, I’m amazed that they still
exist for people who have not. We have incentivized
it to death to convert. Now we’re converting, we’re
at the point where we’re converting T8s to LED non
ballast. You know, so it amazes me that we’re in
that market still and that when I ran it to it, look
it must be a special T12 lamp that I’m not aware of
so but interesting dialogue. Thank you for being
here. I would be interested to see what the sales
for T12 lamps would be in and say, listen there’s
still a market for these things. So, right again
thank you for being here. Thank you for your
testimony. Thank you, Mr. Chair.
REP. ARCONTI (109TH): Thank you, Representative. .
Any other questions? Representative Winkler.
REP. WINKLER (56TH): Yes, your testimony seemed to
indicate that T8 fixture, I’m sorry a T8 bulb
wouldn’t work in a T12 fixture and vice versa.
ANTHONY SERES: On a T8 lamp would very unlikely
work on a T12 ballast. The lamps themselves have
different electrical characteristics.
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REP. WINKLER (56TH): Yes, my personal experience is
they burn out faster, but they will go on.
ANTHONOY SERES: That can happen or they may not
start at all.
REP. WINKLER (56TH): Thank you, Mr. Chair.
REP. ARCONTI (109TH): Okay thank you. Any other
questions? All right, thank you. Any other members
of the public, no. All right, so that concludes our
Public Hearing.
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