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Environmental Groups Appeal Energy Sweeps Ruling

November 27, 2018

HARTFORD — Energy-efficient businesses and environmental groups appealed a federal judge’s ruling that found sweeping $145 million in ratepayer funds to balance the budget in 2017 did not impair contracts between ratepayers and their electric-distribution companies.

The appeal was filed Monday with the Second Circuit Court of Appeals in New York.

“Connecticut’s leaders broke the trust of their constituents when they turned electric ratepayer dollars into an illegal tax,” said lead plaintiff Leticia Colon de Mejias, chair of Efficiency For All (EFA) and founder. “Even in these difficult times, it is obvious that stealing ratepayer funds intended to help Connecticut residents and businesses reduce energy waste, save money on energy bills, and access clean resources is a bad choice. Legislators don’t have to wait for a court decision. Our leaders must take action to restore these funds, which protect our energy stability, health, local jobs, and our economy. Efficiency and renewable resources are the future.”

Legislative leaders have yet to announce who will chair the Energy and Technology Committee in 2019 and it’s unclear if there’s any momentum to restore the funding, most of which has already been swept.

Governor-elect Ned Lamont said in August that he would honor the commitment to the Energy Efficiency Fund and the Green Bank and wouldn’t sweep those funds in the future to balance the budget.

He pointed out that the funds represent thousands of good paying jobs for contractors to go into these residential homes and weatherize them. He said it’s also important to health because it will reduce asthma by cutting down on carbon emissions.

Lamont said he has met with representatives of the Green Bank the other day and said they had told him they lost a zero-interest Bank of America loan because the General Assembly gave them the money and then took it away.

“We have to have a little consistency there,” Lamont said.

In the meantime, energy-efficiency businesses are laying off employees due to the lack of funding.

“It’s projected that more than 3,000 jobs have already been lost and a number of energy efficiency projects across the state have been halted as a result of the state’s action,” Stephen J. Humes, a partner at Holland & Knight and co-counsel on the case, said. “We are confident in our legal arguments that a contractual relationship existed between the state and the ratepayer who paid into the energy programs, and that the sweep of the funding was an unconstitutional and illegal tax that has harmed the plaintiffs and other ratepayers.”

The case raises the question about whether surcharges on utility bills that are dedicated for specific programs should be considered an enforceable contract.

“We are pursuing the case to fix the damage the raids have done to Connecticut families and businesses,” Roger Reynolds, chief legal director at Connecticut Fund for the Environment, said. “Residents trusted that their ratepayer dollars would go where their electric bills said they would—towards energy efficiency and clean energy programs that save money and cut climate pollution. Instead those hard-earned dollars were used to plug a hole in the state budget. We believe the appellate court will see that the state’s action violated federal contract and tax law, and ask them to correct that mistake to put Connecticut back on the path to a healthier energy future and a stronger economy.”

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