Malloy and Dems take giant step backwards as World Leaders negotiate effort to save the Earth from Climate Change (updated)

NOTE:  Updated with responses from Malloy administration agencies

Heralded as groundbreaking legislation designed to promote energy efficiency and reduce greenhouse gasses, in 2007, Republican Governor Jodi Rell signed legislation that “permanently” exempted weatherization products and energy-efficient light bulbs from the Connecticut State Sales Tax.

The legislation, which was overwhelmingly adopted by the Democratic-controlled Connecticut General Assembly, was cited as one of the state’s major accomplishments.

Gina McCarthy, then Connecticut’s Commissioner of Environmental Protection and now the head of the United States Environmental Protection Agency, highlighted the “landmark” legislation in her 2007 Annual State Report entitled Protecting and Restoring our Environment.

In a 2014 national EPA report on “Existing State Policies and Programs that Reduce Power Sector CO2 Emissions,” McCarthy’s agency explained the importance of “State tax incentives for energy efficiency,” writing

“…sales tax exemptions…spur private sector innovation to develop more energy efficient technologies and practices and increase consumer choice of energy-efficient products.

To this day, the federal government promotes Connecticut’s sales tax exemption law on its Department of Energy website

However, just two weeks ago as world leaders, including Gina McCarthy, worked around the clock to develop the historic Paris Agreement on Climate Change, Governor Malloy and Democrats in the Connecticut General Assembly repealed Connecticut’s important sales tax exemption on weatherization and energy-efficient light bulbs as part of their “Democratic Budget Deal.”

Why?

The reason remains a mystery, but faced with a growing state budget deficit the Democrats’ “budget mitigation bill” included a variety of budget gimmicks, significant cuts to important human services and education programs, a major tax break for General Electric (and a handful of other large companies) and a sentence repealing Connecticut General Statutes Sec. 12-412k. [The state statue that exempts residential weatherization products and energy-efficient light bulbs from the state sales tax]

Section 12-412k. (a) For purposes of this section, “residential weatherization products” means programmable thermostats, window film, caulking, window and door weather strips, insulation, water heater blankets, water heaters, natural gas and propane furnaces and boilers that meet the federal Energy Star standard, windows and doors that meet the federal Energy Star standard, oil furnaces and boilers that are not less than eighty-four per cent efficient and ground-source heat pumps that meet the minimum federal energy efficiency rating.

(b) Notwithstanding the provisions of the general statutes, the provisions of this chapter shall not apply to sales of any residential weatherization products or compact fluorescent light bulbs.

With no public notice, hearing or debate, Malloy and the legislature simply voted to eliminate the sales tax exemption on residential weatherization products and energy-efficient light bulbs as of January 1, 2016.

The move will mean that Connecticut residents trying to weatherize their homes or buy energy-efficient light bulbs will pay an additional $3.6 million in sales tax to the State of Connecticut in FY 2016 and $7.5 million in FY 2017.

But, of course, perception is always more important than reality;

The recent move to reduce Connecticut’s commitment to energy efficiency and slow climate change didn’t stop Governor Malloy from making sure he was part of the news story and photo opportunity when EPA Administrator Gina McCarthy came to Connecticut last week to talk about the Paris Agreement.

As CT Newsjunkie reported with, “EPA Chief Returns to Hartford, Touts Paris Agreement On Climate Change,”

It was a homecoming of sorts for Gina McCarthy, the current administrator of the U.S. Environmental Protection Agency who served as the head of Connecticut’s Department of Environmental Protection from 2004 through 2009.

Flanked by Gov. Dannel P. Malloy and members of the Connecticut Auto Retailers Association, McCarthy returned to … to talk about the Paris agreement, under which 195 countries have committed to reducing greenhouse gas emissions.

She said climate change is one of the biggest “economic and national security challenges of our time,” and because of the leadership of President Barack Obama, “we were able to get an agreement in Paris that everyone should be proud of.”

[…]

McCarthy said the only reason they were able to push forward with a plan to reduce emissions here in the United States and a plan to lower the temperature of the climate globally is because states like Connecticut are paving the way.

[…]

The governor said Connecticut is doing its part to address the impact of global warming.

Several years ago the state passed legislation to reduce emissions by 80 percent by 2050 and it became the first “range confident” state for electric vehicles in the nation.

“Climate change is happening. Make no mistake about that,” Malloy said. “And it’s time to take action to address the challenge in a responsible and thoughtful way.”

It’s a problem we can’t fail to act upon, Malloy added.

Yup, Governor Dannel Malloy, who now serves as the head of the Democratic Governors Association (DGA) and therefore the spokesman for the country’s Democratic Governors actually spoke up about Climate Change saying, “It’s a problem we can’t fail to act upon.”

The only problem is that Malloy failed to tell EPA Administrator Gina McCarthy, the media or the public that he had, in fact, acted…

But alas, it was in exactly the wrong direction.

Footnote:

The 2007 legislation exempting weatherization and energy-efficient light bulbs passed the Connecticut House of Representatives on June 1, 2007 by a vote of 128 -19, with both present Speaker of the House Sharkey and Majority Leader Aresimowicz voted in favor of the bill. The next day the bill passed the Connecticut State Senate by a vote of 32-3 with now President Pro-Tempore Looney and Majority Leader Duff voting “Yes.”

The advocacy group, Energy Northeast, wrote about the original sales tax exemption stating;

Illustrating the bi-partisan and diverse stakeholder appeal of legislation requiring [greater energy efficiency] is Rhode Island’s 2006 efficiency procurement law [which] passed a Democratic-majority state Senate and House unanimously and was signed at a joint press event with the sitting Republican Governor a few days later. Similarly, Connecticut’s 2007 Efficiency Procurement legislation was passed overwhelming by a Democratic-majority state legislature and signed by a Republican Governor.”

But that was then and this is now…

Eight years after the bi-partisan commitment to promoting energy efficiency and with the issue more important than ever, Connecticut’s Democratic Governor and Democratic General Assembly decided that a few million dollars in additional state revenue was more important than continuing to help Connecticut residents weatherize their homes and buy energy-efficient light bulbs.

Requests for comment were made to Governor Malloy’s Office, the Office of Policy and Management and various agencies in the Malloy administration.

The Department of Revenue Services responded by email saying  they would have no comment.

The Connecticut Department of Energy and Environmental Protection’s Communication Director responded as follows:

In these difficult financial times for our state, we recognize that tough decisions have to be made.  In order to balance the state’s budget, the General Assembly has had to look at eliminating sales tax exemptions on many products and services.

While the sales tax exemption that covered many products used for weatherizing homes was certainly an added incentive for people to take action, we believe its elimination will not have a significant impact on the public’s appetite for energy efficiency projects.

Homeowners and businesses understand the importance of weatherization and energy efficiency – and the kinds of saving that can be achieved.  This concept has become deeply embedded in people’s minds and even without an sales tax exemption there will continue to be a strong focus on saving energy.

 

 

You can read more about McCarthy’s visit to Connecticut last week via the CT Mirror’s EPA’s Gina McCarthy stops by with a Paris postcard

 

BNE Energy, Wind Farms, Occhiogrosso: A lesson on how modern government really works.

Despite claiming he had no specific plans for work following his resignation as Governor Malloy’s chief advisor, spokesperson and ultra-ego, Roy Occhiogrosso is returning to become the Managing Director for Global Strategy Group’s Hartford Office.

Global Strategy Group is a campaign management and public relations company that specializes in helping companies and organizations push their legislative and political agendas.  Occhiogrosso and the Global Strategy Group served as lead consultants in candidate Dan Malloy’s 2006 and 2010 gubernatorial campaigns. Occhiogrosso and other staff then moved to join the Malloy administration when Governor Malloy was inaugurated in January 2011.

The move is a classic reminder of how government really works and the not-so-clean anti-revolving door policies that are supposed to prevent public officials from personally and financially capitalizing on their public service.

Returning to Global Strategy Group will provide Occhiogrosso (and the company’s clients) with unique access to the development of government policy.

Take, for example, the case study of BNE Energy, which became a client of Global Strategy Group before Occhiogrosso left and has remained one of their primary clients throughout Malloy’s first two years in office.

BNE Energy, incorporated in Delaware, but owned by two Connecticut residents, has been trying to develop commercial wind projects in Prospect and Colebrook Connecticut.  The firm is owned by Greg Zupkus, who serves as President and CEO and Paul Corey, who serves as the company’s Chairman of the Board.

Paul J. Corey is well known in Connecticut politics and government.  During the Rowland years, Corey served as the Executive Director of the Connecticut Department of Public Utility Control, the organization that plays such a significant role in the development of energy policy in Connecticut.  Corey also served as the Chairman of the Board of the Connecticut Lottery Corporation from January 2000 to December 2004.

Corey’s wife, Christine, was a high-ranking personal assistant to former Governor John Rowland.  Together they gave Rowland the famous hot-tub that helped lead to the impeachment hearings and Rowland’s subsequent resignation and trip to federal prison.

After leaving public service, Corey joined the law firm of Brown, Rudnick to work in their Public Utility Practice Group.

In addition to the two corporate executives, BNE Energy operation is assisted by the law firm of Pullman & Comley, where former State Senator Andrew McDonald worked before becoming Malloy’s Chief Counsel.  (Malloy has recently nominated McDonald to a seat on the State Supreme Court).  Pullman & Comley was retained to help BNE get approval from the Connecticut Siting Council.

Meanwhile, lobbying and permitting tasks for the wind farms were given to the law firm of Brown Rudnick, LLP.    The lead individual from Brown, Rudnick is Thomas Ritter, the former speaker of the Connecticut House of Representatives.

Finally, Occhiogrosso’s Global Strategy Group continued to assist with public relations and grassroots lobbying services.

In the last 24 months, Ritter and Global Strategy Group have received over $200,000 in fees from BNE.

Among the backers of the BNE project is Connecticut’s Clean Energy Finance and Investment Authority, a public entity created to “help ensure Connecticut’s energy security and community prosperity by realizing its environmental and economic opportunities through clean, energy finance and investments.”  The authority is chaired by Catherine Smith, the Commissioner of the Connecticut Department of Economic and Community Development (DECD).  Another Board member is Daniel C. Esty, Malloy’s Commissioner of the Connecticut Department of Energy and Environmental Protection (DEEP).

According to public documents, the Finance and Investment Authority has given BNE Energy at least $500,000 in public funds.

In what could be described as an interesting coincidence, on June 21, 2012, BNE’s CEO Zupkus and the company’s president Corey both donated to Democratic Congressional candidate Elizabeth Esty, the wife of Commissioner Dan Esty.

According to BNE Energy, the project faced, “Fierce NIMBY opposition and a tumultuous regulatory environment…as well as heavy legislative scrutiny—particularly after a bill was introduced to place a moratorium on all wind projects in the state. In addition, opposition groups were well-funded and highly vocal, and the press was unsympathetic to the developers.”

BNE’s proposal for a project in Prospect was rejected by the Connecticut Siting Council by a vote of 6-2, but BNE’s plan for a wind farm in Colebrook was approved.  Governor Malloy appoints the members of the Connecticut Siting Council, but the agency’s activities and budget report up through Public Utilities Regulatory Authority (PURA) which is part of Commissioner Esty’s Department of Energy and Environmental Protection.

In response to the developments with BNE Energy and the Connecticut Siting Council, at the beginning of the 2012 Legislative Session, Democrat State Representative Vicki Orsini Nardello, the House Chair of the General Assembly’s Energy and Technology committee, along with State Senator Joan Hartley acted on their concern that the State of Connecticut had never adopted appropriate regulations to manage the development of wind energy in the state.  The legislators introduced legislation suspending the development of further wind power projects until state regulations were established.

Among those supporting Nardello’s bill was U.S. Senator Richard Blumenthal and a significant number of residents from northwestern Connecticut.

However, BNE CEO Zupkus was highly critical of the bill, saying, “It’s just a way the anti-wind is crowd trying to stop wind projects.”

The moratorium bill was eventually passed, but with effective lobbying from former Speaker Ritter the BNE project was exempted.

Meanwhile, in October 2012, a Connecticut Superior Court ruled that the Connecticut Siting Council’s approval of a Colebrook wind farm project was legal and BNE could move forward with construction. However, the judge did make clear that Connecticut’s wind farm siting system was “deeply flawed” and needed to be enhanced.

Meanwhile, as the 2012 legislative campaigns heated up, Lezlye Zupkus, Gregory Zupkus’ wife, announced that she was going to run against Democrat State Representative Vicki Orsini Nardello.

On Election Day, Representative Nardello was one of the only incumbents to lose.  At the time, Nardello explained, “When you take on strong corporate interests, you make enemies.”

Although both Nardello and Zupkus abided by the state’s public financing laws, a new outside group, funded by a right-wing Greenwich billionaire engaged in a series of “independent” expenditures aimed at defeating some Democrats that the group claimed were not sufficiently pro-business.  Nardello was one of those targeted by Voters for Good Government.  The PAC spent over a quarter of a million dollars to try and defeat these candidates.

Voters for Good Government, a new “super-PAC” funded by Greenwich billionaire Thomas Peterffy also took in funds from the Roger Sherman Liberty Center, Americans for Job Security and the American Justice Partnership.  According to a story in the Hartford Courant, Peterffy “hates socialism because he grew up in communist Hungary before coming to America and making his fortune in discount brokerage.”

For more on Voters for Good Government read the Wait, What?  blog post: http://jonathanpelto.com/2012/10/26/anti-socialist-greenwich-billionaire-targeting-democratic-connecticut-state-senators/

Of course, it is unclear if Malloy or Occhiogrosso were involved in any of the developments related to BNE Energy, but one thing is clear.  Occiogrosso’s Global Strategies was involved with BNE Energy before he joined Governor Malloy’s operation and he is now returning to Global Strategies on January 14, 2013.

For more on the interconnections and intrigue surrounding this issue, see the following:

http://articles.courant.com/2012-10-03/business/hc-haar-wind-farm-cases-20121003_1_bne-plan-bne-energy-greg-zupkus

http://articles.courant.com/2012-10-03/business/hc-haar-wind-farm-cases-20121003_1_bne-plan-bne-energy-greg-zupkus

https://www.wind-watch.org/news/2011/05/13/wind-prospect-denied/