Overview of Low-Income Restructuring
Legislation and Implementation
Connecticut
Last Updated: May 2009
Summary
Connecticut's 1998 electric restructuring law imposed two separate charges. One, a system benefits charge, provides a mechanism to cover some of the two largest electric utilities' expenses in operating low-income assistance programs and complying with the state's consumer protection statutes; the other, a conservation surcharge, funds conservation and load management activities.
The law also continued Connecticut's consumer protection measures, considered among the strongest in the country, including a strict winter disconnect moratorium.
A system benefits charge (SBC) imposed on customers of the state's two investor-owned utilities – Connecticut Light & Power (CL&P) and United Illuminating (UI)—helps the utilities cover some low-income energy expenses. However, the majority of the fund has been used to decommission aging power plants, including a nuclear plant, pay taxes to towns affected by sales of utility properties, provide displaced worker protection, and for other utility revenue purposes.
The utilities' assistance programs mostly consist of budget payment and arrearage forgiveness programs. Qualified customers who make regular and timely payments can receive semi-annual arrearage forgiveness. Legislation passed in 2003 affected these programs by making arrearage forgiveness for electric heating customers mandatory; it remains voluntary for non-heating electric bills. The mandatory provision went into effect in late 2004.
The utilities are also allowed to use SBC funds to write off arrearages and uncollectibles incurred by hardship customers during the winter protection period. During 2008, mandated SBC-funded arrearage forgiveness for electric heating customers amounted to about $3.4 million.
SBC funding covering the cost of arrearage forgiveness programs for other qualified electric customers, not required by statute but authorized by the Department of Public Utilities Control (DPUC), amounted to about $7.1 million in 2008.
Apart from the SBC, a gas arrearage forgiveness program has been mandated by statute for a number of years for households that receive energy assistance for their gas heating bills. During 2008, gas companies claimed about $12.5 million in expenses for this program, which served 6,000 households.
The Connecticut Energy Efficiency Fund (CEEF), also created in the 1998 legislation, is funded by another charge, the Conservation and Load Management Charge, on all electricity sold by the state's two IOUs and by customers of three gas companies. The money collected by these charges fund energy efficiency programs that benefit all energy users in Connecticut.
In 2008, this charge resulted in about $75 million, which was spent for conservation programs for all customer classes. These include load management programs, economic development, efficiency programs, including low-income weatherization; market transformation efforts, and research and development of new technologies, including renewables, that might improve energy efficiency in businesses and households.
The Energy Conservation Management Board (ECMB), an appointed group of 14 members representing public and private entities, was created by the same legislation. Originally, ECMB was created to advise and assist CL&P and UI in developing and implementing energy efficiency programs. In 2007, legislation passed that expanded ECMB’s oversight to include the energy efficiency programs of the Connecticut Municipal Electric Energy Cooperative and the natural gas utilities—Connecticut Natural Gas Corporation, Southern Connecticut Gas Company and Yankee Gas Services Company.
CL&P, Connecticut Natural Gas and Yankee Gas, whose low-income weatherization program is called WRAP, and UI’s program (UI-HELPS) spent over $7.9 million of the CEEF for low-income energy efficiency programs in 2008, serving 11,213 households, mostly through the state’s low-income weatherization network. The programs offer a full range of energy conservation measures to address inefficient lighting, water heating, inefficient heating equipment, refrigeration and insufficient insulation. Other ratepayer-funded gas programs spent over $1.6 million in 2008 for low-income energy efficiency.
CL&P’s WRAP also has a multi-family component that provided attic insulation and energy efficient lighting, refrigerators and air conditioners to a senior housing complex. Under the UI-HELPS, high school students and energy specialists worked together to install efficient lighting and low-flow showerheads and provide energy conservation tips to residents in a 70-unit apartment complex.
CL&P and UI also organize workshops for low- and fixed-income customers to acquaint them with state and local assistance programs and also how to budget limited incomes by managing energy, housing, clothing and food dollars.
In Connecticut, the Regional Greenhouse Gas Initiative (RGGI) auction proceeds have been earmarked for CEEF and other clean energy programs and technologies. The state sells emission allowances through a series of auctions to energy generators and providers in an effort to offset carbon emissions. In 2008, two RGGI auctions generated more than $8.9 million for Connecticut’s energy programs. The CEEF anticipates receiving approximately $6.2 million by December 31, 2009 to provide additional funding for CEEF programs.
The publication Evaluation of the 2005 UI Helps and WRAP Low-Income Weatherization Programs: Final Report, summarizes the key findings and recommendations of a process evaluation of the 2005 WRAP and UI Helps.
Completed in December 2006 by Nexus Market Research, the evaluation showed that the programs accomplished their goals of reducing customers' energy use and bills despite limited program resources and a great demand for services. Participants reported high levels of satisfaction with and appreciation for the programs.
The evaluation noted that some participants in both programs received comprehensive services (e.g., insulation, refrigerators, etc.) that had a large impact on their energy use and bills; however, most participants received measures with relatively minor impacts (e.g., compact fluorescent lights and portable fixtures, faucet aerators, and showerheads).
The evaluation made 28 recommendations for both programs aimed at improving program delivery, goal measurement and achievement, and customer satisfaction.
For more information:
Annual reports from the Connecticut Energy Conservation Management Board about energy efficiency programs, including low-income.
Connecticut Energy Efficient Fund website
Energy Conservation Management Board Documents
DPUC Decisions on Utility Programs
CT Energy Information website
Utility restructuring legislation, HB 5005, PA 98-28 (4/98)
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Page Last Updated: September 24, 2009
