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Efficiency coalition lawsuit: Funding raid is unconstitutional

BY Matt Pilon

5/15/2018
Photos | Rablo Robles
Photos | Rablo Robles
A proposed raid of the Connecticut Energy Efficiency Fund to help plug the state's budget deficit could impact contractors for various initiatives, including the Home Energy Solutions program. Among those vendors is Leticia Colon de Mejias, CEO of Energy Efficiencies Solutions in Windsor, pictured here in 2013.
A group of five Connecticut energy efficiency contractors, ratepayers and not-for-profits is seeking to block the state's planned sweep of $155 million in ratepayer funds, on the grounds that the raid is unconstitutional.

The coalition, which includes the Connecticut Fund for the Environment (CFE) and Connecticut Citizen Action Group, filed a lawsuit in federal court Tuesday, naming Gov. Dannel Malloy, Comptroller Kevin Lembo and Treasurer Denise Nappier as defendants. The lead plaintiff is Leticia Colon de Mejias, founder and CEO of Windsor-based Energy Efficiencies Solutions LLC.

The coalition wants a judge to nullify the portion of the state budget approved last October that authorized the budget-balancing sweeps.

Time could be of the essence. The suit says plaintiffs believe that the sweep for the current fiscal year will occur in June, with a second sweep a year later.

"By June these funds may well be irrevocably transferred and the job losses and massive

reductions in efficiency and clean energy improvements irreversible," the complaint reads.

Lawmakers this month voted to restore $10 million of the sweeps and protect utility funds from future raids by no longer funneling them through a state account. Malloy has not yet signed Senate Bill 9 into law, but is expected to, as it contains many pieces of his environmental agenda.

The governor, who decried the energy sweeps when he signed the October budget, said Tuesday that the suit is no surprise, and blamed Republicans for pushing for the sweeps last year.

"I have long maintained that these shortsighted sweeps would increase energy costs for consumers and businesses and cause untold harm to our green energy economy," Malloy said in a statement.

The lawsuit argues that the sweeps are unconstitutional for several reasons.

First, the sweeps violate contractual relationships between utilities and ratepayers, who agree to pay conservation or systems-benefit charges in exchange for efficiency services and clean-energy investments, the coalition argues.

Second, the sweeps effectively treat taxpayers differently, since municipal utility ratepayers don't pay those charges on their bills, which replenish the state's energy efficiency fund with approximately $240 million per year, the suit says.

The plaintiffs also argue that the sweeps violate a state law that pledges to energy investors that the state won't limit or alter rights vested in the Connecticut Green Bank, which was forced to pivot its business model following the raid.

Finally, the suit argues, sweeping the funds "causes the unintended consequence of converting many tax exempt charitable organizations into taxpayers in violation of state law."

Attorneys for the plaintiff coalition include John Wolfson of Feiner Wolfson, Patrick Sweeney of Holland & Knight and Roger Reynolds of CFE.