WNPR

Hidden "Energy Tax" Is A Red Flag To Connecticut Investors

Jan 30, 2018

The state’s latest budget crisis means tens of millions of dollars set aside to make homes and businesses more energy efficient will instead be pumped into the state’s general fund.

It’s a piece of legislative math that’s been criticized as a “hidden tax” on utility customers.

The changes will also undercut operations at one of the state’s most heralded clean energy programs: The Connecticut Green Bank.

More than $32 million over the next two years -- that’s the cut faced by the Connecticut Green Bank.

Bryan Garcia, its CEO, said it’s a reduction of more than half.

“They think that big number is something that they can take and sweep back into the state,” Garcia said, “without realizing that that number is tied up in all the transactions that we’re engaged with the private sector on.”

The Green Bank gets ratepayer money and loans it to leverage larger, outside investment.

The idea is to lower capital costs for projects like food-waste recycling or microgrids.

Since its founding in 2011, the program has been lauded, winning honors last year from Harvard University.

Now, Garcia said the Green Bank is canceling work.

“As a result of these sweeps, we’re seeing our private investment partners being more and more reluctant to put their resources to work in the state of Connecticut,” Garcia said, “because the state has the ability to sweep funds away into the general fund.”

Ratepayers, meanwhile, will continue to pay efficiency charges on their utility bills.

When combined with other legislative raids, the Green Bank sweep means energy consumers will funnel more than $150 million into the state’s general fund over the next two years.

Garcia said in Connecticut, a state with “the highest electric rates in the continental U.S.,” that raid raises issues of equity and environmental justice.

“This is indirectly removing opportunities to help people make their lives better,” Garcia said. “By lowering energy costs, families -- especially low-to-moderate income families -- will now have more disposable income to invest in their homes, to invest in the education of their children.”