DeStefano Proposes Energy Agenda

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DeStefano Proposes Energy Agenda

Patricia Daddona, New London Day May 12, 2006

Democratic gubernatorial candidate John DeStefano Jr. said Thursday he would tackle Connecticut's energy rates - among the highest in the nation - by imposing a tax on electric generators and investing in energy technology and conservation.

DeStefano, now serving his 13th year as mayor of New Haven, would use a purported $450 million in savings from a new windfall tax originally proposed by Attorney General Richard Blumenthal to lower consumers' electric bills, pay for energy credits for businesses and fund government programs that promote energy efficiency.

"The high cost of energy is causing us to lose jobs in the state," DeStefano said Thursday. "There's no comprehensive energy policy. There's a huge opportunity in Connecticut to create an industry around clean energy sources. We do little to encourage it."

The General Assembly's Energy Committee produced an energy bill that dropped the windfall tax proposal and failed to attract action. Like Blumenthal, DeStefano would tax half the excess profits, up to 20 percent of total profits, at the Millstone Power Station in Waterford and the Bridgeport Harbor coal plant.

Dominion, which owns two nuclear reactors at Millstone, claims the 40 to 50 percent profits DeStefano says the reactors are earning is inaccurate. Although electric prices rise and fall with high natural gas prices, Millstone's are locked into yearlong contracts and are less vulnerable to volatility, spokesman Pete Hyde said. Hyde would not provide the plant's profit percentage, calling the information proprietary.

"If a windfall profits tax is passed, generators will factor that cost into their bids' for sales," Hyde said. "They're not going to absorb this tax. The impetus would be for generators, including Dominion, to sell power elsewhere. Costs would rise even more because then you have a scarcity of power. And businesses wouldn't invest in new generation. You look at how difficult it already is to do business in the state of Connecticut, you add that (tax) burden, that's going to discourage new companies from investing in Connecticut."

"That's bull," DeStefano said. "Natural gas sets the pace for calculations for energy pricing," with or without the volatile spot market and long-term contracts. "This is a tax on an income they say they don't have that they obviously do. This is a tax on excessive profits, and it is unconscionable to tolerate those excess profits. Anybody who doesn't get that hasn't opened an electric bill recently."

The candidate also would direct $50 million of the state's $22 billion pension fund to investments in clean and renewable energy like hydrogen fuel cells. That would not take retirement funds away from state employees because the investments would generate a fair rate of return, he said.

DeStefano also believes the state could save $1.8 billion over the next six years by implementing measures to step up conservation and improve energy efficiency, changes that could reduce peak energy demand and thereby lower customers' electric rates. The idea comes from a study completed two years ago by GDS Associates entitled "Maximum Achievable Potential Report." It is not clear who commissioned the report. A copy was not available.

Other ideas the candidate is espousing include spending $200 million to establish and run an 'energy institute' at the University of Connecticut that could coordinate cutting-edge research and create jobs. And since energy issues are driven by changes often stemming from beyond Connecticut's borders, DeStefano would also work to obtain better representation on ISO New England, the agency that manages the sale of power in much of the Northeast, and create a federal consumer office that could influence the Federal Energy Regulatory Commission, he said.