HARTFORD, Conn. (CN) — A group of energy-efficiency contractors brought a federal complaint Tuesday against Connecticut, accusing the state of illegally swiping $155 million in ratepayer funds to close last year’s budget deficit.
"It is ironic that, in the name of plugging a budget deficit, the General Assembly is squandering opportunities for the state's green economy, hobbling the award-winning Connecticut Green Bank, and defaulting on the state's commitments to deliver energy savings to the regional power grid, which ultimately will cost electric ratepayers millions in penalties and lost energy savings," the complaint states.
Three high-power firms signed on to represent the challengers: Holland & Knight, in Manhattan; Feiner Wolfson, in Hartford; and the New Haven-based Connecticut Fund for the Environment.
The suit takes issue with the bipartisan budget signed on Oct. 31 by Democratic Gov. Dannel P. Malloy. To fill the budget gap, Connecticut’s challengers say, the state diverted to the General Fund $155 million from the Conservation & Load Management, Regional Greenhouse Gas Initiative, and Clean Energy Finance and Investment Authority funds.
But the complaint says much of that funding was raised from a small charge on state electric bills, paid by ratepayers to their utility in return for specific services.
Leticia Colon de Mejias, CEO and owner of Energy Efficiencies Solutions, is the lead plaintiff behind the suit, which she filed with consumer and environmental advocates.
Their complaint also highlights the Legislature’s vote last week to restore $10 million of the Conservation & Load Management fund in fiscal-year 2019, “leaving a gap of $145 million in unlawfully seized ratepayer funds.”
Colon de Mejias and her co-plaintiffs were vocal last year about the sweep and warned the General Assembly that they would litigate. Though several lawmakers expressed regret in February that the funds had been diverted, the General Assembly didn’t do anything about it before they adjourned last week on May 9.
“These sweeps are wrong and unconstitutional,” attorney Stephen Humes of Hollander & Knight said Tuesday at a press conference outside the federal courthouse in Hartford.
Humes said they waited to see if the Legislature would do the right thing and restore the funds before heading to court. He said they also plan to seek a temporary injunction to protect the funds before they are swept in June. The complaint filed Tuesday seeks a declaratory judgment that the action was unconstitutional.
As to the $10 million that lawmakers returned to the Conservation Load Management fund, lead plaintiff Colon de Mejias told reporters Tuesday that this was “a bit of a slap in the face with a $2 billion windfall in our coffers for the rainy-day” fund.
Colon de Mejas was referring to the unexpected increase in income-tax collections the state realized in April that helped resolve the state's immediate budget woes.