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Connecticut's Department of Energy and Environmental Protection (DEEP) has proposed to increase funding for electric and natural gas energy efficiency programs from $122 million to $231 million annually for the next three years.

DEEP says this increase will be financed through an adjustment on charges for efficiency programs that are part of monthly electric and natural gas bills.

“Increased funding for energy efficiency programs is a smart investment with an unrivaled rate of return,” says Daniel C. Esty, commissioner of DEEP. “Residents and businesses who take advantage of efficiency programs see immediate and dramatic savings on their bill - with $3 to $4 in savings typically achieved for every $1 invested in energy efficiency.”

The release of DEEP’s draft decision opens a 30-day comment period. After evaluating public comments and making any necessary adjustments, DEEP’s Bureau of Energy and Technology Policy will finalize its decision and forward it to the Public Utilities Regulatory Authority (PURA). PURA will then take action to implement a Conservation Adjustment Mechanism (CAM) to fund expanded electric and natural gas efficiency programs. Final action on this decision is expected this fall.

Legislation approved in the 2013 session of the General Assembly - P.A.13-298 - authorized the use of a CAM to fund expanded efficiency programs and outlined the process for implementing this change.

According to DEEP, monthly electric bills now include a conservation fee of $0.003/kWh, which provides funding for efficiency programs. This results in charges of $2.25/month for the average residential ratepayer - who uses 750 kWh per month. The proposed CAM will add the equivalent of another $0.003/kWh to distribution charges on electric bills.

DEEP says this charge will likely be more than offset by reduced and avoided costs on other portions of bills that are paid by ratepayers. According to the department, while customers who take advantage of efficiency program offerings will benefit the most, all customers will save money as lower consumption reduces the need for transmission upgrades and ISO New England to call upon the most expensive generation.

Approximately $105 million a year is currently collected from all electric ratepayers and $17 million from all natural gas ratepayers for energy efficiency programs, according to DEEP. These funds are distributed by the utilities for programs developed under the oversight of the Energy Efficiency Board.

DEEP says the use of a CAM to support expanded efficiency programs is consistent with the state’s first-ever Comprehensive Energy Strategy - which analyzed future needs for all sources of power in all sectors of the state economy. The strategy concluded that a full investment in all cost-effective efficiency measures would allow Connecticut ratepayers to achieve a net savings of $1.9 billion for natural gas and $3.5 billion for electricity over the next decade.

“Every dollar invested in efficiency is money that is spent within the state rather than spent somewhere else. Although Connecticut has been a leader in efficiency, the governor’s Comprehensive Energy Strategy revealed that we are seriously under-exploiting this resource,” says Esty. “The strategy showed that at current investments, we are only tapping into half of the true potential for gas and electric efficiency, and we are now taking action to capture the full benefits of energy efficiency.”

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