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State Energy Efficiency Policy Database

Connecticut

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Summary

Connecticut's electric distribution companies (Connecticut Light & Power and United Illuminating Company), natural gas investor-owned utilities (Connecticut Natural Gas Corporation, Southern Connecticut Gas Company, and Yankee Gas Services Company), and municipal electric companies provide portfolios of energy efficiency programs to their customers. The Energy Conservation Management Board (ECMB), appointed by the Public Utilities Regulatory Authority (PURA), is responsible for approving the natural gas and electric distribution companies’ plans. Electric and natural gas programs are both required by legislation. The ECMB administers the Connecticut Energy Efficiency Fund (CEEF), which is primarily supported by monthly charges on customers' bills.  The utilities administer the energy efficiency programs, and the utilities and contractors they hire implement them.

In 2007, the Connecticut legislature enacted Public Act 07-242, An Act Concerning Electricity and Energy Efficiency, which places new requirements for energy efficiency and establishes new regulatory mechanisms, such as electric and natural gas decoupling. The Act requires the electric distribution utilities to procure all cost-effective energy efficiency as their first-priority resource.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Customer Energy Efficiency Programs

Electric distribution utilities, natural gas companies, and municipal electric utilities are required by Connecticut statute to provide "conservation and load management" (C&LM) programs for their customers. The Energy Efficiency Board (EEB) advises and assists the electric and natural gas utilities in the development of energy efficiency programs included in their Conservation and Load Management Plan (“Plan”). The integrated Plan is subject to review and approval by the Public Utilities Regulatory Authority (PURA) and the Department of Energy and Environmental Protection (“DEEP”). All programs included in the plans are required to pass a benefit-cost test. The DEEP and PURA oversee the fully integrated electric distribution utility and natural gas utility programs. The EEB, appointed by the PURA, administers the Connecticut Energy Efficiency Fund (CEEF).  The utilities administer the energy efficiency programs. The utilities and contractors hired by the utilities implement the programs.

The EEB and the CEEF were established in 1998 through the state’s electric utility restructuring legislation, Public Act 98–28, An Act Concerning Energy Independence, Connecticut General Statute §16-245m. The 1998 Act required electric companies to offer efficiency programs. In 2005, Public Act 05-1, An Act Concerning Energy Independence (Connecticut General Statute §16-32f  and Connecticut General Statute §7-233y) required the investor-owned natural gas companies to submit energy efficiency program plans to the DPUC and required the municipal electric companies and the Connecticut Fuel Oil Conservation Board to work with the EEB to develop energy efficiency programs for their customers.

Investment and savings information is summarized at www.ctenergydashboard.com .There are low-interest loans available for commercial and industrial customers as well as 0% on-bill financing for small businesses who implement eligible energy-savings measures. More information can be found in the ACEEE report, Energy Efficiency Financing Programs.

Connecticut’s electric energy efficiency programs are funded by a monthly system benefits charge on customers' electric bills.  Connecticut Energy Efficiency Fund (“CEEF”) electric programs are also funded through the revenues the electric utilities receive from the ISO-New England Forward Capacity Market (“FCM”).  CEEF will also be supplemented with funds the electric utilities receive from the sale of Class III Renewable Energy Credits (“REC”) for energy efficiency savings and from the Regional Greenhouse Gas Initiative (RGGI”).  Natural gas energy efficiency programs are funded by a monthly charge established in the companies’ Plan plus funding based on the difference between the imposed tax and the approved tax (described in PA 07-242, section 115b). Municipal electric utilities are required to create a fund to support energy efficiency and renewable energy programs. This fund is supported by a surcharge of 0.22 cents/kWh.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

Links:

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November 8, 2013


Energy Efficiency Resource Standards

Summary: Requirement for acquisition of all cost-effective efficiency resources, equivalent to annual electricity savings targets of ~1.4%, natural gas savings of ~60 MMTherms through 2015.

The state's renewable portfolio standard (RPS), established in 1998 and revised thereafter, requires that electricity providers and wholesale suppliers obtain 27% of their retail load from renewable energy and energy efficiency by 2020. Technologies eligible to meet the standard are grouped into tiers or classes, with each class assigned a specified percentage of load it must meet.  Energy efficiency measures and combined heat and power systems installed after January 1, 2006 are considered "Class III sources" and must meet 1% of retail load in 2007, 2% in 2008, 3% in 2009 and 4% in 2010 and thereafter.

Utilities are offered an alternative method of compliance called an "alternative compliance payment" (ACP), the price of which was set at $31/MWh for efficiency.  An ACP is an amount of money required by a utility or load serving entity that fails to meet its requirement for energy efficiency.  This allows load serving entities in the state some flexibility in complying with the regulations by enabling them to either run efficiency programs, or pay the ACP, whichever is less costly.

The 2007 Electricity and Energy Efficiency Act (Public Act 07-242) took an important step in recognizing the value of energy efficiency by requiring utilities to achieve resource needs through "all available energy efficiency resources that are cost-effective, reliable and feasible." The Department of Public Utility Control interpreted this mandate overly restrictively, however, focusing only on capacity needs, and did not approve funding increases to achieve all cost-effective energy efficiency (Docket 10-02-07).  Therefore, the state has an all cost-effective efficiency procurement requirement for electric and natural gas utilities that has yet to be implemented.

Public Act 11-80 (2011) created the Department of Energy and Environmental Protection (DEEP), into which was integrated the DPUC, renamed the Public Utilities Regulatory Authority (PURA).  DEEP has several goals related to energy: to reduce the cost electricity in the state; to ensure the reliability and safety of the state's energy supply; to increase the use of clean energy; and to develop the state's energy economy.  The Act requires DEEP to review the state's energy and capacity resource assessment every two years and to develop an integrated resources plan that identifies how best to meet projected demand for electricity and to lower the cost of electricity through a mixture of supply and demand side measures, including energy efficiency, load management, demand response, combined heat and power facilities, distributed generation and other emerging energy technologies.

In 2013, the state passed Public Act 13-298, An Act Concerning Implementation of Connecticut’s Comprehensive Energy Strategy. The Act contained provisions requiring gas and electric distribution companies to create triennial energy conservation plans and increased funding levels to the point where the state’s all cost-effective mandate is achievable. In December, 2013, PURA approved rate adjustments requested by utilities for implementation of their efficiency plans.


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February 14, 2014


Alternative Business Models

Connecticut's 2007 Electricity and Energy Efficiency Act (CT Public Act No. 07-242) requires the Department of Public Utility Control to order the state's electric and natural gas distribution companies to decouple distribution revenues from the volume of natural gas or electricity sales. In 2013 Public Act 13-298  was adopted again requiring decoupling for all electric distribution companies. Currently, United Illuminating uses a full decoupling mechanism, adjusted annually (See Docket No. 08-07-04RE03).


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August 12, 2013


Reward Structures for Successful Energy Efficiency Programs

During annual hearings, the Energy Efficiency Board (EEEB) reviews the past year’s results relative to the established goals and determines a performance incentive for the distribution utilities for achieving or exceeding the goals. The incentive, referred to as a “management fee,” can be from 2-8% of the program costs before taxes. The threshold for earning the minimum incentive (2%) is 70% of the goal. At 100% of the goal, the incentive would be 5%. At 130% of goals, it would be 8%. Program costs are recovered through rates.

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

The Connecticut LDCs have proposed a new performance incentives for natural energy efficiency programs in the recently filed 3-year 2013-2015 C&LM Plan.

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


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August 9, 2013


Energy Efficiency as a Resource

Prior to passage of the 2007 Electric and Energy Efficiency Act, utilities were not required to submit integrated resource plans in Connecticut's restructured utility markets. With passage of this act (View authorizing legislation), however, this changed. The act requires electric distribution companies to review the state's energy and capacity resource assessment and develop a comprehensive plan for procurement of energy resources, considering a full array of supply and demand resources. The act requires resource selection and procurement to be done so as to minimize the costs and to maximize consumer benefits consistent with the state's environmental goals. The distribution companies must submit annual assessments of energy and capacity requirements for the next three, five and ten years, as well as plans to "eliminate growth in electric demand" and to achieve other demand-side and environmental objectives. Resource needs are first to be met through "all available energy efficiency resources that are cost-effective, reliable and feasible."

The Energy Future Act of 2011 (PA 11-80) requires that Connecticut’s energy needs “shall be met first through all available energy efficiency and demand reduction resources that are cost-effective, reliable, and feasible.


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August 12, 2013


Evaluation, Measurement & Verification

The evaluation of ratepayer-funded energy efficiency programs in Connecticut relies on legislative mandates (Public Act 11-80). Evaluations are administered by the Connecticut Energy Efficiency Board. Connecticut has established formal rules and procedures for evaluation, which are stated in Public Act 11-80 and Evaluation Rules and Roadmap. Statewide evaluations are conducted. Connecticut uses two of the five classic benefit-cost tests identified in the California Standard Practice Manual. These are the Total Resource Cost (TRC) and Utility/Programs Administrator (UCT) test. The rules for benefit-cost tests are stated in Public Act 11-80. Connecticut specifies the UCT to be its primary cost-effectiveness test. These benefit-cost tests are required for overall portfolio and total program level screening.


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August 12, 2013