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Panel Adopts Rell Rebate Plan

July 23, 2008

By David Funkhouser, The Hartford Courant, Conn.

Jul. 23–A legislative panel Tuesday overrode the advice of its own attorneys and adopted a set of rules governing power plant emissions that includes potential rebates for consumers.

The move is a victory for Gov. M. Jodi Rell, who had pushed for the rebates as a way to hedge against potentially higher electricity prices for consumers.

Attorney General Richard Blumenthal, however, has contended that Rell’s plan is illegal because it does not conform to legislation passed last year that set up the emissions control program. Critics of the plan say the payout would be minuscule, and the money should be spent on energy efficiency programs that offer potentially larger savings.

Rell called the vote “a victory for taxpayers” and said, “I am pleased that lawmakers on the regulations review committee have joined me in recognizing that Connecticut can be a full participant in the effort to address climate change — and provide ratepayer protections at the same time.”

But the vote surprised committee member Sen. Jonathan Harris, D-West Hartford.

“It could have been handled in [the next] legislative session,” Harris said. “There was no rush.”

Harris said the issue was cast in the committee debate as being for or against relief for ratepayers.

“Of course we support relief to ratepayers,” he said. “The larger issue that should be debated by the General Assembly is, does it make sense to give rebates that could amount to $2 or $3 a year,” vs. much greater savings that could be gained through energy efficiency programs.

Rep Claudia Powers, R-Greenwich, who voted for Rell’s proposal, noted that there is much uncertainty over energy prices.

“I tend to look at the big picture,” she said.

Regardless of the actual dollars that may be saved, Powers said “in my reading this was the only section of the proposed regulations that was an actual, ironclad protection for the consumer, the ratepayer.”

The panel voted 7-6 in favor of the rules, with Democrats and Republicans voting on both sides of the issue.

The new rules will apply to the Regional Greenhouse Gas Initiative, a 10-state collaboration that aims to battle global warming by cutting back the amount of emissions of carbon dioxide from power-generating facilities across the region.

Under the initiative, states will auction off a limited supply of permits to emit CO2. The number of permits will gradually decline, giving power companies an incentive to invest in cleaner technology and renewable sources of electricity. The first auction is scheduled for Sept. 25.

The proceeds from the permit auction — according to the law passed by the legislature in 2007 — were to be used for conservation programs, loan management and support for renewable energy sources such as biomass, wind and solar.

The permits are initially expected to sell for between $3 and $5 a ton. But recent surges in energy prices prompted Rell to propose a kind of safety valve to keep consumers from absorbing higher costs for electricity. Under her plan, if prices go above $5 a ton, the proceeds would be returned to consumers.

Opponents of Rell’s move say that would amount to 23 cents a month for every dollar the price goes above $5 a ton — far less than could be saved through conservation programs that also would be funded through the auctions.

The regulations review committee, charged with signing off on new state regulations, adopted the rules for the regional initiative, including Rell’s rebate proposal, Tuesday. That vote came despite advice from legislative attorneys who agreed with Blumenthal that Rell’s proposal does not conform with the law.

The vote puts those who support the regional emissions control initiative in a bind: They want to see Connecticut participate in the first permit auction in September. Any legal challenge now could prevent that from happening.

Blumenthal appeared conciliatory in his reaction.

“Although my interpretation of the statute and legislative intent differed from today’s decision by the legislative committee, I respect its decision and will do my best to implement it and serve the two goals of assisting consumers with energy cost savings and enhancing the environment,” he said.

Voting for the regulations with Rell’s amendments were Reps. T.R. Rowe, Paul Davis, William Hamzy, Arthur O’Neill and Claudia Powers, and Sens. Thomas Herlihy and Sam Caligiuri. Opposed were Reps. Carlo Leone and Christopher Caruso, and Sens. Andrew Rorabach, Jonathan Harris, Paul Doyle and Andrea Stillman.

Contact David Funkhouser at dfunkhouser@courant.com.

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Copyright (c) 2008, The Hartford Courant, Conn.

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