AN ACT CONCERNING CONNECTICUT'S ENERGY FUTURE.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective July 1, 2007) On and after July 1, 2007, and not later than July 1, 2017, the Secretary of the Office of Policy and Management shall provide a five-hundred-dollar rebate for the purchase and installation in residential structures of replacement natural gas, propane and oil furnaces and boilers that are not less than eighty-four per cent efficient. Persons may apply to the secretary, on a form prescribed by the secretary, to receive such rebate. The rebate shall be available for only a residential structure containing not more than four dwelling units.

Sec. 2. Section 6 of public act 05-2 of the October 25 special session is repealed and the following is substituted in lieu thereof (Effective from passage):

The State Bond Commission shall have the power, from time to time, to authorize the issuance of bonds of the state in one or more series and in principal amounts not exceeding in the aggregate five million dollars. The proceeds of the sale of said bonds shall be deposited in the Energy Conservation Loan Fund established under section 16a-40a of the general statutes for the purposes of making and guaranteeing loans and deferred loans as provided in section 5 of [this act] public act 05-2 of the October 25 special session and section 1 of this act. All provisions of section 3-20 of the general statutes, or the exercise of any right or power granted thereby which are not inconsistent with the provisions of sections 16a-40 to 16a-40b, inclusive, of the general statutes, as amended by section 5 of public act 05-191, and this section are hereby adopted and shall apply to all bonds authorized by the State Bond Commission pursuant to said sections 16a-40 to 16a-40b, inclusive, and this section, and temporary notes in anticipation of the money to be derived from the sale of any such bonds so authorized may be issued in accordance with said section 3-20 and from time to time renewed. Such bonds shall mature at such time or times not exceeding twenty years from their respective dates as may be provided in or pursuant to the resolution or resolutions of the State Bond Commission authorizing such bonds. Said bonds issued pursuant to said sections 16a-40 to 16a-40b, inclusive, and this section shall be general obligations of the state and the full faith and credit of the state of Connecticut are pledged for the payment of the principal of and interest on said bonds as the same become due, and accordingly and as part of the contract of the state with the holders of said bonds, appropriation of all amounts necessary for punctual payment of such principal and interest is hereby made, and the Treasurer shall pay such principal and interest as the same become due.

Sec. 3. (Effective from passage) (a) On or before January 1, 2008, the Energy Conservation Management Board, in consultation with the electric distribution companies, shall develop and establish a program to (1) provide rebates to residential customers of electric distribution companies who replace an existing window air conditioning unit that does not meet the federal Energy Star standard with a unit that does meet said standard. Such rebates shall be not less than twenty-five dollars for an air conditioner with a retail price of one hundred dollars to two hundred dollars; not less than fifty dollars for an air conditioner with a retail price of more than two hundred dollars but less than three hundred dollars; and not less than one hundred dollars for an air conditioner with a retail price of more than three hundred dollars, and (2) rebates of not less than five hundred dollars to residential customers of electric distribution companies who replace an existing central air conditioning unit that does not meet the federal Energy Star standard with a unit that does meet said standard.

(b) The rebate program shall be funded by the Energy Conservation and Load Management Funds established by the electric distribution companies pursuant to section 16-245m of the general statutes.

(c) The Commissioner of Consumer Protection shall certify to participate in the program established in subsection (a) of this section only those retailers that will provide the rebate to only those customers who present an air conditioning unit to a retailer for removal or disposal upon or before the purchase of an air conditioning unit that meets the federal Energy Star standard. The commissioner may impose a fine of not more than ten thousand dollars on any retailer providing the rebate without removing or disposing of an air conditioning unit.

Sec. 4. (NEW) (Effective October 1, 2007) An electric supplier or an electric distribution company shall waive a demand charge for an operator of a fuel cell during (1) a loss of power due to problems at any distribution resource, or (2) a scheduled or unscheduled shutdown of the fuel cell if said shutdown occurs during off-peak hours. The charge waived shall not exceed the amount resulting from the problem or shutdown.

Sec. 5. (NEW) (Effective from passage) On and after January 1, 2008, the Department of Public Utility Control shall order and direct any intermediate or base load electric generating unit owned by an electric distribution company or covered by a bilateral contract with an electric distribution company that is fueled by either oil or natural gas, with a rating of not less than sixty-five megawatts, shall be capable of operating on demand using either oil or natural gas.

Sec. 6. (Effective from passage) Not later than September 1, 2007, the Department of Public Utility Control shall conduct a contested case proceeding, in accordance with the provisions of chapter 54 of the general statutes, to analyze (1) the appropriate number of linemen that are necessary for an electric distribution company to maintain, repair and extend its electric distribution lines by region under normal circumstances and under extraordinary circumstances, including, but not limited to, storm conditions, (2) whether the consolidation or centralization of line repair facilities and personnel results in longer times to reach affected areas, (3) whether greater use of shield wire or other technologies may reduce the incidence of power outages, and (4) the most efficacious way to notify the public regarding an electric power outage and the status of an electric distribution company's efforts to restore electricity to a particular area of the state. Not later than January 1, 2008, the department shall submit a report with the results of such analysis to the joint standing committee of the General Assembly having cognizance of matters relating to energy in accordance with the provisions of section 11-4a of the general statutes.

Sec. 7. Section 16-32g of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

Not later than January 1, [1988] 2008, each electric or electric distribution company shall submit to the Department of Public Utility Control a plan for the maintenance of poles, wires, conduits or other fixtures, along public highways or streets for the transmission or distribution of electric current, owned, operated, managed or controlled by such company, in such format as the department shall prescribe. Such plan shall include a summary of appropriate staffing levels necessary for the maintenance of said fixtures and a program for the trimming of tree branches and limbs located in close proximity to overhead electric wires where such branches and limbs may cause damage to such electric wires. The department shall review each plan and may issue such orders as may be necessary to ensure compliance with this section. The department may require each electric or electric distribution company to submit an updated plan at such time and containing such information as the department may prescribe. The department shall adopt regulations, in accordance with the provisions of chapter 54, to carry out the provisions of this section.

Sec. 8. Subsection (a) of section 16-19e of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) In the exercise of its powers under the provisions of this title, the Department of Public Utility Control shall examine and regulate the transfer of existing assets and franchises, the expansion of the plant and equipment of existing public service companies, the operations and internal workings of public service companies and the establishment of the level and structure of rates in accordance with the following principles: (1) That there is a clear public need for the service being proposed or provided; (2) that the public service company shall be fully competent to provide efficient and adequate service to the public in that such company is technically, financially and managerially expert and efficient; (3) that the department and all public service companies shall perform all of their respective public responsibilities with economy, efficiency and care for [the] public safety and energy security, and so as to promote economic development within the state with consideration for energy and water conservation, energy efficiency and the development and utilization of renewable sources of energy and for the prudent management of the natural environment; (4) that the level and structure of rates be sufficient, but no more than sufficient, to allow public service companies to cover their operating costs including, but not limited to, appropriate staffing levels, and capital costs, to attract needed capital and to maintain their financial integrity, and yet provide appropriate protection to the relevant public interests, both existing and foreseeable which shall include, but not be limited to, reasonable costs of security of assets, facilities and equipment that are incurred solely for the purpose of responding to security needs associated with the terrorist attacks of September 11, 2001, and the continuing war on terrorism; (5) that the level and structure of rates charged customers shall reflect prudent and efficient management of the franchise operation; and (6) that the rates, charges, conditions of service and categories of service of the companies not discriminate against customers which utilize renewable energy sources or cogeneration technology to meet a portion of their energy requirements.

Sec. 9. (NEW) (Effective from passage) The Department of Public Utility Control and the Connecticut Siting Council shall, in conjunction with the Department of Emergency Management and Homeland Security's Coordinating Council, established pursuant to section 28-1b of the general statutes, initiate a joint contested case proceeding, in accordance with the provisions of chapter 54 of the general statutes, investigate energy security with regard to the siting of electric generating facilities and transmission facilities, including considerations of planning, preparedness, response and recovery capabilities.

Sec. 10. (Effective July 1, 2007) Not later than September 1, 2007, the Connecticut Siting Council and the Department of Public Utility Control shall initiate a joint contested case proceeding, in accordance with the provisions of chapter 54 of the general statutes, to assess ways in which the state can ensure and enhance the reliability of electric generating facilities located in the state during periods of peak electric demand. Said proceeding shall include, but not be limited to, an examination of (1) the current compliance status of electric generation facilities with existing on-site dual fuel storage and operational requirements, (2) the existing inventory of fuel storage and fuel delivery resources available to supply electric generating facilities located in the state, (3) the amount of fuel delivery and storage infrastructure that would be necessary to ensure the reliable operation of in-state generating facilities during periods of peak electric demand, and (4) the types of incentives that can be offered to electric and gas market participants to enhance the reliability of electric service during periods of peak electric demand. In conducting the proceeding, the council and the department shall seek the input of interested persons and entities including, but not limited to, the Office of Consumer Counsel, the Attorney General, the state's electric and gas distribution companies, the state's electric generators, owners of natural gas pipeline facilities located in the state, and the regional independent system operator. Not later than January 1, 2008, the council and the department shall submit a report containing their findings and recommendations to the joint standing committee of the General Assembly having cognizance of matters relating to energy in accordance with the provisions of section 11-4a of the general statutes.

Sec. 11. Section 16a-38k of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2008):

(a) Notwithstanding any provision of the general statutes, any (1) new construction of a state facility [, except salt sheds, parking garages, maintenance facilities or school construction,] that is projected to cost not less than five million dollars, [or more,] and is approved and funded on or after January 1, [2007] 2008, and (2) renovation of a state facility that is projected to cost not less than two million dollars, that is financed with state funds and is approved and funded on or after January 1, 2008, shall comply with the regulations adopted pursuant to subsection (b) of this section. The Secretary of the Office of Policy and Management, in consultation with the Commissioner of Public Works, [and the Institute for Sustainable Energy,] shall exempt any facility from complying with said regulations if [said secretary] the Institute for Sustainable Energy finds, in a written analysis, that the cost of such compliance significantly outweighs the benefits. For purposes of this section, "state facility" means any building, including, but not limited to, a state-financed housing project or a building that is used or intended to be used as a school.

(b) Not later than January 1, 2007, the Secretary of the Office of Policy and Management, in consultation with the Commissioner of Public Works, the Commissioner of Environmental Protection and the Commissioner of Public Safety, shall adopt regulations, in accordance with the provisions of chapter 54, to adopt building construction standards that are consistent with or exceed the silver building rating of the Leadership in Energy and Environmental Design's rating system for new commercial construction and major renovation projects, as established by the United States Green Building Council, or an equivalent standard, including, but not limited to, a two-globe rating in the Green Globes USA design program, and thereafter update such regulations as the secretary deems necessary.

Sec. 12. Section 10-286 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) The amount of the grant approved by the Commissioner of Education under the provisions of this chapter for any completed school building project shall be computed as follows:

(1) For the fiscal year ending June 30, 1984, and each fiscal year thereafter, in the case of a new school plant, an extension of an existing school building or projects involving the major alteration of any existing building to be used for school purposes, the eligible percentage, as determined in section 10-285a, of the result of multiplying together the number representing the highest projected enrollment, based on data acceptable to the Commissioner of Education, for such building during the eight-year period from the date a local or regional board of education files a notification of a proposed school building project with the Department of Education, the number of gross square feet per pupil determined by the Commissioner of Education to be adequate for the kind of educational program or programs intended, and the eligible cost of such project, divided by the gross square feet of such building, or the eligible percentage, as determined in section 10-285a, of the eligible cost of such project, whichever is less, provided, (A) any such project on which construction was started prior to July 1, 1975, shall be reimbursed under the formula in effect prior to said date, (B) any such project on which construction or payments under this chapter were started after June 30, 1975, but prior to July 31, 1983, shall be reimbursed based upon the data, submitted for each such project and accepted by the Department of Education during said period, representing the number of pupils the plant was designed to accommodate, (C) any project for which final grant calculation has been made after June 30, 1975, but prior to July 31, 1983, shall be reimbursed based upon such final calculation, and (D) any such project for which estimated grant payments were begun prior to July 31, 1983, shall be reimbursed based upon the calculation formula used in making such estimated grant payments;

(2) In case of projects involving the purchase of an existing building to be used for school purposes, the eligible percentage, as determined in section 10-285a, of the eligible cost as determined by the Commissioner of Education, provided any project for which an application is made on or after July 1, 1995, involving the purchase and renovation of an existing facility, may be exempt from the standard space specifications, and otherwise ineligible repairs and replacements may be considered eligible for reimbursement as part of such a project, if information is provided acceptable to the commissioner documenting the need for such work and the cost savings to the state and the school district of such purchase and renovation project in comparison to alternative construction options;

(3) If any school building project described in subdivisions (1) and (2) of this subsection includes the construction, extension or major alteration of outdoor athletic facilities, tennis courts or a natatorium, gymnasium or auditorium, the grant for the construction of such outdoor athletic facilities, tennis courts and natatorium shall be limited to one-half of the eligible percentage for subdivisions (1) and (2) of this subsection of the net eligible cost of construction thereof; the grant for the construction of an area of spectator seating in a gymnasium shall be one-half of the eligible percentage for subdivisions (1) and (2) of this subsection of the net eligible cost of construction thereof; and the grant for the construction of the seating area in an auditorium shall be limited to one-half of the eligible percentage for subdivisions (1) and (2) of this subsection of the net eligible cost of construction of the portion of such area that seats one-half of the projected enrollment of the building, as defined in subdivision (1) of this subsection, which it serves;

(4) In the case of a regional vocational agriculture center or the purchase of equipment pursuant to subsection (a) of section 10-65 or a regional special education facility pursuant to section 10-76e, an amount equal to the eligible cost of such project, as determined by the Commissioner of Education;

(5) In the case of a public school administrative or service facility, one-half of the eligible percentage for subdivisions (1) and (2) of this subsection of the eligible project cost as determined by the Commissioner of Education, or in the case of a regional educational service center administrative or service facility, the eligible percentage, as determined pursuant to subsection (c) of section 10-285a, of the eligible project cost as determined by the commissioner;

(6) In the case of the total replacement of a roof or the total replacement of a portion of a roof which has existed for at least twenty years, or in the case of the total replacement of a roof or the total replacement of a portion of a roof which has existed for fewer than twenty years when it is determined by a registered architect or registered engineer that such roof was improperly designed or improperly constructed and the town is prohibited from recovery of damages or has no other recourse at law or in equity, the eligible percentage for subdivisions (1) and (2) of this subsection, of the eligible cost as determined by the Commissioner of Education. In the case of the total replacement of a roof or the total replacement of a portion of a roof which has existed for fewer than twenty years (A) when it is determined by a registered architect or registered engineer that such roof was improperly designed or improperly constructed and the town has recourse at law or in equity and recovers less than such eligible cost, the eligible percentage for subdivisions (1) and (2) of this subsection of the difference between such recovery and such eligible cost, and (B) when the roof is at least fifteen years old but less than twenty years old and it cannot be determined by a registered architect or registered engineer that such roof was improperly designed or improperly constructed, the eligible percentage for subdivisions (1) and (2) of this subsection of the eligible project costs provided such costs are multiplied by the ratio of the age of the roof to twenty years. For purposes of this subparagraph, the age of the roof shall be determined in whole years to the nearest year based on the time between the completed installation of the old roof and the date of the grant application for the school construction project for the new roof;

(7) For the fiscal year ending June 30, 1984, and for each fiscal year thereafter, in the case of projects to correct code violations, the eligible percentage, as determined in section 10-285a, of the eligible cost as determined by the Commissioner of Education;

(8) In the case of a renovation project for which an application is made on or after July 1, 1995, the eligible percentage as determined in subsection (b) of section 10-285a, multiplied by the eligible costs as determined by the commissioner, provided the project may be exempt from the standard space specifications, and otherwise ineligible repairs and replacements may be considered eligible for reimbursement as part of such a project, if information is provided acceptable to the commissioner documenting the need for such work and the cost savings to the state and the school district of such renovation project in comparison to alternative construction options;

(9) In the case of projects approved to remedy certified school indoor air quality emergencies, the eligible percentage, as determined in section 10-285a, of the eligible cost as determined by the Commissioner of Education;

(10) In the case of a project involving a turn-key purchase for a facility to be used for school purposes, the eligible percentage, as determined in section 10-285a, of the net eligible cost as determined by the Commissioner of Education, except that for any project involving such a purchase for which an application is made on or after July 1, 2006, (A) final plans for all construction work included in the turn-key purchase agreement shall be approved by the Commissioner of Education in accordance with section 10-292, and (B) such project may be exempt from the standard space specifications, and otherwise ineligible repairs and replacements may be considered eligible for reimbursement as part of such project, if information acceptable to the commissioner documents the need for such work and that such a purchase will cost less than constructing the facility in a different manner and will result in a facility taking on a useful life comparable to that of a new facility;

(11) On or after January 1, 2008, in the case of a construction or a school building that is projected to cost not less than five million dollars that is consistent with or exceeds the building construction standards developed pursuant to subsection (b) of section 11 of this act, or for the renovation of a school building that is projected to cost not less than two million dollars that complies with said standards, one hundred per cent of the incremental costs of construction or renovation that are attributable to conforming the construction or renovation to said standards, as documented by school administrators and approved by the commissioner, in consultation with the Secretary of the Office of Policy and Management.

(b) (1) In the case of all grants computed under this section for a project which constitutes a replacement, extension or major alteration of a damaged or destroyed facility, no grant may be paid if a local or regional board of education has failed to insure its facilities and capital equipment in accordance with the provisions of section 10-220. The amount of financial loss due to any damage or destruction to any such facility, as determined by ascertaining the replacement value of such damage or destruction, shall be deducted from project cost estimates prior to computation of the grant.

(2) In the case of any grants computed under this section for a school building project authorized pursuant to section 10-283 after July 1, 1979, any federal funds or other state funds received for such school building project shall be deducted from project costs prior to computation of the grant.

(3) The limitation on grants for new outdoor athletic facilities, tennis courts, natatorium, gymnasium and auditorium shall not apply to school building projects for which applications for review of preliminary plans and specifications on Form 2A were submitted prior to October 1, 1975, in the case of towns and prior to October 15, 1975, in the case of regional school districts.

(4) Commencing with the school construction projects authorized by the General Assembly during the fiscal year ending June 30, 1985, and for all such projects so authorized thereafter, the calculation of grants pursuant to this section shall be made in accordance with the state standard space specifications in effect at the time of the final grant calculation, except that on and after July 1, 2005, in the case of a school district with an enrollment of less than one hundred fifty students in grades kindergarten to grade eight, inclusive, state standard space specifications shall not apply in the calculation of grants pursuant to this section and the Commissioner of Education may modify the standard space specifications for a project in such district.

(c) In the computation of grants pursuant to this section for any school building project authorized by the General Assembly pursuant to section 10-283 (1) after January 1, 1993, any maximum square footage per pupil limit established pursuant to this chapter or any regulation adopted by the State Board of Education pursuant to this chapter shall be increased by twenty-five per cent for a building constructed prior to 1950; (2) after January 1, 2004, any maximum square footage per pupil limit established pursuant to this chapter or any regulation adopted by the State Board of Education pursuant to this chapter shall be increased by up to one per cent to accommodate a heating, ventilation or air conditioning system, if needed; and (3) after July 1, 2006, for projects with total authorized project costs greater than ten million dollars, if total construction change orders or other change directives otherwise eligible for grant assistance under this chapter exceed five per cent of the authorized total project cost, only fifty per cent of the amount of such change order or other change directives in excess of five per cent shall be eligible for grant assistance.

Sec. 13. Subdivision (16) of subsection (a) of section 16a-48 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(16) "Commercial refrigerators and freezers" means reach-in cabinets, pass-through cabinets, roll-in cabinets and roll-through cabinets that have less than eighty-five feet of capacity [. "Commercial refrigerators and freezers" does not include walk-in models or consumer products regulated under the federal National Appliance Energy Conservation Act of 1987] designed for the refrigerated or frozen storage of food and food products.

Sec. 14. Subsection (a) of section 16a-48 of the general statutes is amended by adding subdivisions (23) to (42), inclusive, as follows (Effective October 1, 2007):

(NEW) (23) "Electricity ratio" means the ratio of furnace electricity use to total furnace energy use;

(NEW) (24) "Boiler" means a space heater that is a self-contained appliance for supplying steam or hot water primarily intended for space-heating. "Boiler" does not include hot water supply boilers;

(NEW) (25) "Central furnace" means a self-contained space heater designed to supply heated air through ducts of more than ten inches in length;

(NEW) (26) "Residential furnace or boiler" means a product that utilizes only single-phase electric current, or single-phase electric current or DC current in conjunction with natural gas, propane or home heating oil, and which (A) is designed to be the principal heating source for the living space of a residence; (B) is not contained within the same cabinet with a central air conditioner with a rated cooling capacity of not less than 65,000 BTUs per hour; (C) is an electric central furnace, electric boiler, forced-air central furnace, gravity central furnace, or low pressure steam or hot water boiler; and (D) has a heat input rate of less than 300,000 BTUs per hour for electric boilers and low pressure steam or hot water boilers and less than 225,000 BTUs per hour for forced-air central furnaces, gravity central furnaces and electric central furnaces;

(NEW) (27) "Furnace air handler" means the section of the furnace that includes the fan, blower and housing, generally upstream of the burners and heat exchanger. The furnace air handler may include a filter and a cooling coil;

(NEW) (28) "High-intensity discharge lamp" means a lamp in which light is produced by the passage of an electric current through a vapor or gas, and in which the light-producing arc is stabilized by bulb wall temperature and the arc tube has a bulb wall loading in excess of three watts per square centimeter;

(NEW) (29) "Medium voltage dry-type distribution transformer" means a transformer that (A) has an input voltage of not less than 600 volts but not more than 34,500 volts; (B) is air-cooled; (C) does not use oil as a coolant; and (D) is rated for operation at a frequency of 60 Hertz. "Medium voltage dry-type distribution transformer" does not mean devices with multiple voltage taps, with the highest voltage tap not less than twenty per cent more than the lowest voltage tap, or devices that are designed to be used in a special purpose application and are unlikely to be used in general purpose applications including drive transformers, rectifier transformers, auto transformers, uninterruptible power system transformers, impedance transformers, regulating transformers, sealed and nonventilating transformers, machine tool transformers, welding transformers, grounding transformers or testing transformers;

(NEW) (30) "Metal halide lamp" means a high intensity discharge lamp in which the major portion of the light is produced by radiation of metal halides and their products of dissociation, possibly in combination with metallic vapors;

(NEW) (31) "Metal halide lamp fixture" means a light fixture designed to be operated with a metal halide lamp and a ballast for a metal halide lamp;

(NEW) (32) "Probe start metal halide ballast" means a ballast used to operate metal halide lamps that does not contain an ignitor and that instead starts lamps by using a third starting electrode probe in the arc tube;

(NEW) (33) "Single voltage external AC to DC power supply" means a device that (A) is designed to convert line voltage AC input into lower voltage DC output; (B) is able to convert to only one DC output voltage at a time; (C) is sold with, or intended to be used with, a separate end-use product that constitutes the primary power load; (D) is contained within a separate physical enclosure from the end-use product; (E) is connected to the end-use product in a removable or hard-wired male and female electrical connection, cable, cord or other wiring; (F) does not have batteries or battery packs, including those that are removable or that physically attach directly to the power supply unit; (G) does not have a battery chemistry or type selector switch and indicator light, or does not have a battery chemistry or type selector switch and a state of charge meter; and (H) has a nameplate output power less than or equal to 250 watts;

(NEW) (34) "State regulated incandescent reflector lamp" means a lamp that is not colored or designed for rough or vibration service applications, that has an inner reflective coating on the outer bulb to direct the light, and E26 medium screw base, and a rated voltage or voltage range that lies at least partially within 115 to 130 volts, and that falls into one of the following categories: (A) A bulged reflector or elliptical reflector or a blown PAR bulb shape and that has a diameter that equals or exceeds 2.25 inches, or (B) a reflector, parabolic aluminized reflector, bulged reflector or similar bulb shape and that has a diameter of 2.25 to 2.75 inches. "State regulated incandescent reflector lamp" does not include ER30, BR30, BR40 and ER40 lamps of not more than fifty watts, BR30, BR40 and ER40 lamps of sixty-five watts and R20 lamps of not more than forty-five watts;

(NEW) (35) "Bottle-type water dispenser" means a water dispenser that uses a bottle or reservoir as the source of potable water;

(NEW) (36) "Commercial hot food holding cabinet" means a heated, fully-enclosed compartment with one or more solid or partial glass doors that is designed to maintain the temperature of hot food that has been cooked in a separate appliance. "Commercial hot food holding cabinet" does not include heated glass merchandizing cabinets, drawer warmers or cook-and-hold appliances;

(NEW) (37) "Pool heater" means an appliance designed for heating nonpotable water contained at atmospheric pressure for swimming pools, spas, hot tubs and similar applications, including natural gas, heat pump, oil and electric resistance pool heaters;

(NEW) (38) "Portable electric spa" means a factory-built electric spa or hot tub, supplied with equipment for heating and circulating water;

(NEW) (39) "Residential pool pump" means a pump used to circulate and filter pool water in order to maintain clarity and sanitation;

(NEW) (40) "Walk-in refrigerator" means a space refrigerated to temperatures at or above thirty-two degrees Fahrenheit that can be walked into and is designed for the refrigerated storage of food and food products;

(NEW) (41) "Walk-in freezer" means a space refrigerated to temperatures below thirty-two degrees Fahrenheit that can be walked into and is designed for the frozen storage of food and food products;

(NEW) (42) "Central air conditioner" means a central air conditioning model that consists of one or more factory-made assemblies, which normally include an evaporator or cooling coil, compressor and condenser. Central air conditioning models may provide the function of air cooling, air cleaning, dehumidifying or humidifying.

Sec. 15. Subsection (b) of section 16a-48 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(b) The provisions of this section apply to the testing, certification and enforcement of efficiency standards for the following types of new products sold, offered for sale or installed in the state: (1) Commercial clothes washers; (2) commercial refrigerators and freezers; (3) illuminated exit signs; (4) large packaged air-conditioning equipment; (5) low voltage dry-type distribution transformers; (6) torchiere lighting fixtures; (7) traffic signal modules; (8) unit heaters; (9) residential furnaces and boilers; (10) medium voltage dry-type transformers; (11) metal halide lamp fixtures; (12) single voltage external AC to DC power supplies; (13) state regulated incandescent reflector lamps; (14) bottle-type water dispensers; (15) commercial hot food holding cabinets; (16) portable electric spas; (17) walk-in refrigerators and walk-in freezers; (18) pool heaters; (19) central air conditioners; and [(9)] (20) any other products as may be designated by the department in accordance with subdivision (3) of subsection (d) of this section.

Sec. 16. Subdivision (1) of subsection (d) of section 16a-48 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(d) (1) [Not later than July 1, 2005, the] The department, in consultation with the secretary, shall adopt regulations, in accordance with the provisions of chapter 54, to implement the provisions of this section and to establish minimum energy efficiency standards for the types of new products set forth in subsection (b) of this section. The regulations shall provide for the following minimum energy efficiency standards:

(A) Commercial clothes washers shall meet the requirements shown in Table P-3 of section 1605.3 of the California Code of Regulations, Title 20: Division 2, Chapter 4, Article 4;

(B) [commercial] Commercial refrigerators and freezers shall meet the August 1, 2004, requirements shown in Table A-6 of [said California regulation] the California Code of Regulations, Title 20: Division 2, Chapter 4, Article 4;

(C) [illuminated] Illuminated exit signs shall meet the version 2.0 product specification of the "Energy Star Program Requirements for Exit Signs" developed by the United States Environmental Protection Agency;

(D) [large] Large packaged air-conditioning equipment having not more than 760,000 BTUs per hour of capacity shall meet a minimum energy efficiency ratio of 10.0 for units using both electric heat and air conditioning or units solely using electric air conditioning, and 9.8 for units using both natural gas heat and electric air conditioning;

(E) [large] Large packaged air-conditioning equipment having not less than 761,000 BTUs per hour of capacity shall meet a minimum energy efficiency ratio of 9.7 for units using both electric heat and air conditioning or units solely using electric air conditioning, and 9.5 for units using both natural gas heat and electric air conditioning;

(F) [low] Low voltage dry-type distribution transformers shall meet or exceed the energy efficiency values shown in Table 4-2 of the National Electrical Manufacturers Association Standard TP-1-2002;

(G) [torchiere] Torchiere lighting fixtures shall not consume more than 190 watts and shall not be capable of operating with lamps that total more than 190 watts;

(H) [traffic] Traffic signal modules shall meet the product specification of the "Energy Star Program Requirements for Traffic Signals" developed by the United States Environmental Protection Agency that took effect in February, 2001, except where the department, in consultation with the Commissioner of Transportation, determines that such specification would compromise safe signal operation;

(I) [unit] Unit heaters shall not have pilot lights and shall have either power venting or an automatic flue damper;

(J) On or after January 1, 2009, residential furnaces and boilers purchased by the state shall meet or exceed the following annual fuel utilization efficiency: (i) For gas and propane furnaces, ninety per cent annual fuel utilization efficiency, (ii) for oil furnaces, eighty-three per cent annual fuel utilization efficiency, (iii) for gas and propane hot water boilers, eighty-four per cent annual fuel utilization efficiency, (iv) for oil-fired hot water boilers, eighty-four per cent annual fuel utilization efficiency, (v) for gas and propane steam boilers, eighty-two per cent annual fuel utilization efficiency, (vi) for oil-fired steam boilers, eighty-two per cent annual fuel utilization efficiency, and (vii) for furnaces with furnace air handlers, an electricity ratio of not more than 2.0, except air handlers for oil furnaces with a capacity of less than 94,000 BTUs per hour shall have an electricity ratio of 2.3 or less;

(K) On or after January 1, 2009, medium voltage dry-type distribution transformers shall meet minimum efficiency levels three-tenths of a percentage point higher than the Class 1 efficiency levels for medium voltage distribution transformers specified in Table 4-2 of the "Guide for Determining Energy Efficiency for Distribution Transformers" published by the National Electrical Manufacturers Association in 2002;

(L) On or after January 1, 2010, metal halide lamp fixtures designed to be operated with lamps rated greater than or equal to 150 watts but less than or equal to 500 watts shall not contain a probe-start metal halide lamp ballast;

(M) Single-voltage external AC to DC power supplies manufactured on or after January 1, 2008, shall meet the energy efficiency standards of table U-1 of section 1605.3 of the January 2006 California Code of Regulations, Title 20, Division 2, Chapter 4, Article 4: Appliance Efficiency Regulations. This standard applies to single voltage AC to DC power supplies that are sold individually and to those that are sold as a component of or in conjunction with another product. This standard shall not apply to single voltage external AC to DC power supplies sold with products subject to certification by the United States Food and Drug Administration. A single-voltage external AC to DC power supply that is made available by a manufacturer directly to a consumer or to a service or repair facility after and separate from the original sale of the product requiring the power supply as a service part or spare part shall not be required to meet the standards in said table U-1 until five years after the effective dates indicated in the table;

(N) On or after January 1, 2009, state regulated incandescent reflector lamps shall be manufactured to meet the minimum average lamp efficacy requirements for federally-regulated incandescent reflector lamps contained in 42 USC 6295 (i)(1)(A). Each lamp shall indicate the date of manufacture;

(O) On or after January 1, 2009, bottle-type water dispensers, commercial hot food holding cabinets, portable electric spas, walk-in refrigerators and walk-in freezers shall meet the efficiency requirements of section 1605.3 of the January 2006 California Code of Regulations, Title 20, Division 2, Chapter 4, Article 4: Appliance Efficiency Regulations. On or after January 1, 2010, residential pool pumps shall meet said efficiency requirements;

(P) On or after January 1, 2009, pool heaters shall meet the efficiency requirements of sections 1605.1 and 1605.3 of the January 2006 California Code of Regulations, Title 20, Division 2, Chapter 4, Article 4: Appliance Efficiency Regulations.

Sec. 17. Subsection (g) of section 16a-48 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(g) Manufacturers of new products set forth in subsection (b) of this section or designated by the department shall certify to the secretary that such products are in compliance with the provisions of this section, except that certification is not required for single voltage external AC to DC power supplies and walk-in refrigerators and walk-in freezers. All single voltage external AC to DC power supplies shall be labeled as described in the January 2006 California Code of Regulations, Title 20, Section 1607 (9). The department, in consultation with the secretary, shall promulgate regulations governing the certification of such products. The secretary shall publish an annual list of such products.

Sec. 18. Section 4a-67c of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

The Department of Administrative Services and each other budgeted agency, as defined in section 4-69, exercising procurement authority shall procure equipment and appliances for state use which meet or exceed the federal energy conservation standards set forth in the Energy Policy and Conservation Act, 42 USC 6295, any federal regulations adopted thereunder, [and] any applicable energy performance standards established in accordance with subsection (j) of section 16a-38 and meet or exceed the federal Energy Star standards. Purchases of equipment and appliances for which energy performance standards have been established pursuant to subsection (j) of section 16a-38 shall be (1) made from among those specific models of equipment and appliances which meet such standards, and (2) based, when possible, on competitive bids. Such bids shall be evaluated on the basis of the life-cycle cost standards, if any, established pursuant to subsection (b) of section 16a-38.

Sec. 19. (NEW) (Effective from passage) (a) A municipal electric utility shall contribute a pro rata share of the one-time awards made to customer-side distributed resources made pursuant to subsection (a) of section 16-243i of the general statutes, as amended by this act, in order for customers in its service area to qualify for such awards. The Department of Public Utility Control shall conduct a contested case proceeding to determine the municipal electric utility's pro rata share. Said pro rata share shall be based on the proportion of the aggregate annual kilowatt hours of electricity sold by the municipal electric utilities in the state to retail customers as a percentage of the total annual kilowatt hours of electricity sold in the state. The pro rata share that is not paid by the municipal electric utilities shall be recovered through federally mandated congestion charges in nonmunicipal electric utility service areas and shall be paid in equal semi-annual payments for a period of not more than five years.

(b) In order to qualify for such an award, any customer shall submit an application, in a form prescribed by the Department of Public Utility Control, to said department. The application shall contain a certification by an independent licensed engineer that the customer-side distributed resource is intended to operate for purposes of reducing customer peak electric loads and that the project is financially viable.

Sec. 20. Section 16-243r of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):

The provisions of sections 7-233y, 16-1, as amended by this act, 16-19ss, 16-32f, 16-50i, 16-50k, 16-50x, 16-243i to 16-243q, inclusive, 16-244c, as amended by this act, 16-244e, 16-245d, 16-245m, 16-245n, as amended by this act, 16-245z and 16-262i and section 21 of public act 05-1 of the June special session*, apply to new customer-side distributed resources and grid-side distributed resources developed in this state that add electric capacity on and after January 1, 2006, and shall also apply to customer-side distributed resources and grid-side distributed resources developed in this state prior to January 1, 2007, that (1) have undergone upgrades that increase the resource's thermal efficiency operating level no fewer than ten percentage points, (2) operate at a thermal efficiency level of at least fifty per cent, and (3) add electric capacity in this state on or after January 1, 2007, provided such measure is in accordance with the provisions of said sections 7-233y, 16-1, as amended by this act, 16-19ss, 16-32f, 16-50i, 16-50k, 16-50x, 16-243i to 16-243q, inclusive, 16-244c, as amended by this act, 16-244e, 16-245d, 16-245m, 16-245n, as amended by this act, 16-245z and 16-262i and section 21 of public act 05-1 of the June special session*.

Sec. 21. (NEW) (Effective January 1, 2008) Any municipality may, by vote of its legislative body or, in a municipality where the legislative body is a town meeting, by vote of the board of selectmen, provide a property tax exemption to any owner of a motor vehicle exempt from sales and use taxes under subdivision (110) or (115) of section 12-412 of the general statutes, as amended by this act.

Sec. 22. Subdivision (110) of section 12-412 of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2008):

(110) On and after July 1, 2000, and prior to July 1, [2002] 2010, the sale of any passenger car that has a United States Environmental Protection Agency estimated highway gasoline mileage rating of at least [fifty] forty miles per gallon.

Sec. 23. (NEW) (Effective October 1, 2007) As used in sections 24 to 38, inclusive, of this act:

(1) "Energy improvement district distributed resources" means one or more of the following owned, leased, or financed by an Energy Improvement District Board: (A) Customer-side distributed resources, as defined in section 16-1 of the general statutes, as amended by this act; (B) grid-side distributed resources, as defined in said section 16-1; (C) combined heat and power systems, as defined in said section 16-1; and (D) Class III sources, as defined in said section 16-1;

(2) "Project" means the acquisition, purchase, construction, reconstruction, improvement or extension of one or more of energy improvement district distributed resources.

Sec. 24. (NEW) (Effective from passage) (a) Any municipality may, by vote of its legislative body, establish an energy improvement district within such municipality. The affairs of any such district shall be administered by an Energy Improvement District Board. The members of any such board shall be appointed by the chief elected official of the municipality and shall serve for such term as the legislative body may prescribe and until their successors are appointed and have qualified. Vacancies shall be filed by the chief elected official for the unexpired portion of the term. The members of each such board shall serve without compensation, except for necessary expenses.

(b) After a vote by a municipality to establish an energy improvement district, the chief elected official of the municipality shall notify each property owner of record within said district by mail of said action. An owner may record on the land records in the municipality its decision to participate in the energy improvement district and the provisions of sections 24 to 38, inclusive, of this act. Any owner of record, including any new owner of record, may rescind said decision at any time.

Sec. 25. (NEW) (Effective October 1, 2007) (a) An Energy Improvement District Board shall fund energy improvement district distributed resources in its district and shall prepare a comprehensive plan for the development and financing of such resources, except on state or federally owned properties, with a view to the increase and efficiency, reliability and the furtherance of commerce and industry in the energy improvement district. The board may lease or acquire office space and equip the same with suitable furniture and supplies for the performance of work of the board, and may employ such personnel as may be necessary for such performance. The board also shall have power to:

(1) Sue and be sued;

(2) Have a seal and alter the same;

(3) Confer with any body or official having to do with electric power distribution facilities within and without the district, and hold public hearings as to such facilities;

(4) Confer with electric distribution companies with reference to the development of electric distribution facilities in such district and the coordination of the same;

(5) Determine the location, type, size and construction of energy improvement district distributed resources, subject to the approval of any department, commission or official of the United States, the state or the municipality where federal, state or municipal statute or regulation requires it;

(6) Make surveys, maps and plans for, and estimates of the cost of, the development and operation of requisite energy improvement district distributed resources and for the coordination of such facilities with existing agencies, both public and private, with the view of increasing the efficiency of the electric distribution system in the district and in the furtherance of commerce and industry in the district;

(7) Make contracts and leases, loans and execute all instruments necessary or convenient to carry out their duties under the provision of this section, including the lending of proceeds of bonds issued in accordance with subdivision (9) of this section, to owners, lessees or occupants of facilities in the energy improvement district;

(8) Fix fees, rates, rentals or other charges for the purpose of all energy improvement district distributed resources owned by the Energy Improvements District Board and collect such fees, rates, rentals and other charges for such facilities owned by the board, which fees, rates, rentals or other charges shall be sufficient to comply with all covenants and agreements with the holders of any bonds issued pursuant to section 26 of this act;

(9) Operate and maintain all energy improvement district distributed resources owned or leased by the board and use the revenues from such resources for the corporate purposes of the board in accordance with any covenants or agreements contained in the proceedings authorizing the issuance of bonds pursuant to section 26 of this act;

(10) Accept gifts, grants, loans or contributions for the United States, the state or any agency or instrumentality of either of them, or a person or corporation, by conveyance, bequest or otherwise, and expend the proceeds for any purpose of the board and, as necessary, contract with the United States, the state or any agency or instrumentality of either of them, to accept gifts, grants, loans or contributions on such terms and conditions as may be provided by the law authorizing the same;

(11) Maintain staff to promote and develop the movement of commerce through the energy improvement district; and

(12) Use the officers, employees, facilities and equipment of the municipality, with the consent of the municipality, and pay a proper portion of the compensation or cost.

(b) Nothing in the provisions of sections 24 to 38, inclusive, of this act shall be construed to authorize an Energy Improvement District to:

(1) Be an electric distribution company, as defined in section 16-1 of the general statutes, as amended by this act, or provide electric distribution or electric transmission services, as defined in said section 16-1, or own or operate assets to provide such services;

(2) Be a municipal electric utility, as defined in section 7-233 of the general statutes, or provide the services of a municipal electric utility;

(3) Sell electricity to persons or entities in its municipality outside of the Energy Improvement District;

(4) Undertake any authority or jurisdiction granted by the general states to the Connecticut Siting Council, the Department of Public Utility Control, or any other state agency, or to undertake any actions under the jurisdiction of any federal agency; or

(5) Acquire property by eminent domain.

Sec. 26. (NEW) (Effective October 1, 2007) (a) An Energy Improvement District Board may, from time to time, issue bonds subject to the approval of the legislative body in the municipality in which the energy improvement district is located, for the purpose of paying all or any part of the cost of acquiring, purchasing, constructing, reconstructing, improving or extending any energy improvement district distributed resources project and acquiring necessary land and equipment thereof, or for any other authorized purpose of the board. The board may issue such types of bonds as it may determine, including, but not limited to, bonds payable as to principal and interest: (1) From its revenues generally; (2) exclusively from the income and revenues of a particular project; or (3) exclusively from the income and revenues of certain designated projects, whether or not they are financed in whole or in part from the proceeds of such bonds. Any such bonds may be additionally secured by a pledge of any grant or contribution from a participating municipality, the state or any political subdivision, agency or instrumentality thereof, any federal agency or any private corporation, copartnership, association or individual, or a pledge of any income or revenues of the board, or a mortgage on any project or other property of the board, provided such pledge shall not create any liability on the entity making such grant or contribution beyond the amount of such grant or contribution. Whenever and for so long as any board has issued and has outstanding bonds, the board shall fix, charge and collect rates, rents, fees and other charges in accordance with section 28 of this act. Neither the members of the board nor any person executing the bonds shall be liable personally on the bonds by reason of the issuance thereof. The bonds and other obligations shall so state on the face, shall not be a debt of the state or any political subdivision thereof, except when the board or a participating municipality which, in accordance with section 35 of this act, has guaranteed payment of principal and of interest on the same, and no person other than the board or such a public body shall be liable thereon, nor shall such bonds or obligations be payable out of any funds or properties other than those of the board or such a participating municipality. Such bonds shall not constitute an indebtedness within the meaning of any statutory limitation on the indebtedness of any participating municipality. Bonds of the board are declared to be issued for an essential public and governmental purpose. In anticipation of the sale of such revenue bonds the board may issue negotiable bond anticipation notes and may renew the same from time to time, but the maximum maturity of any such note, including renewals thereof, shall not exceed five years from the date of issue of the original note. Such notes shall be paid from any revenues of the board available therefor and not otherwise pledged, or from the proceeds of sale of the revenue bonds of the Energy Improvement District Board in anticipation of which they were issued. The notes shall be issued in the same manner as the revenue bonds. Such notes and the resolution or resolutions authorizing the same may contain any provisions, conditions or limitations which a bond resolution of the board may contain.

(b) An Energy Improvement District Board may issue bonds as serial bonds or as term bonds, or both. Bonds shall be authorized by resolution of the members of the authority and shall bear such date or dates, mature at such time or times, not exceeding twenty years from their respective dates, bear interest at such rate or rates, or have provisions for the manner of determining such rate or rates, payable at such time or times, be in such denominations, be in such form, either coupon or registered, carry such registration privileges, be executed in such manner, be payable in lawful money of the United States of America at such place or places, and be subject to such terms of redemption, as such resolution or resolutions may provide. The revenue bonds or notes may be sold at public or private sale for such price or prices as the Energy Improvement District Board shall determine. Pending preparation of the definitive bonds, the Energy Improvement District Board may issue interim receipts or certificates which shall be exchanged for such definitive bonds.

(c) Any resolution or resolutions authorizing any revenue bonds or any issue of revenue bonds may contain provisions, which shall be part of the contract with the holders of the revenue bonds to be authorized, as to: (1) Pledging all or any part of the revenues of a project or any revenue-producing contract or contracts made by the Energy Improvement District Board with any individual, partnership, corporation or association or other body, public or private, to secure the payment of the revenue bonds or of any particular issue of revenue bonds, subject to such agreements with bondholders as may then exist; (2) the rentals, fees and other charges to be charged, and the amounts to be raised in each year thereby, and the use and disposition of the revenues; (3) the setting aside of reserves or sinking funds or other funds or accounts as the board may establish and the regulation and disposition thereof, including requirements that any such funds and accounts be held separate from or not be commingled with other funds of the board; (4) limitations on the right of the board or its agent to restrict and regulate the use of the project; (5) limitations on the purpose to which the proceeds of sale of any issue of revenue bonds then or thereafter to be issued may be applied and pledging such proceeds to secure the payment of the revenue bonds or any issue of the revenue bonds; (6) limitations on the issuance of additional bonds, the terms upon which additional bonds may be issued and secured, the refunding of outstanding bonds; (7) the procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent thereto, and the manner in which such consent may be given; (8) limitations on the amount of moneys derived from the project to be expended for operating, administrative or other expenses of the board; (9) defining the acts or omissions to act that shall constitute a default in the duties of the board to holders of its obligations and providing the rights and remedies of such holders in the event of a default; (10) the mortgaging of a project and the site thereof for the purpose of securing the bondholder; and (11) provisions for the execution of reimbursement agreements or similar agreements in connection with credit facilities, including, but not limited to, letters of credit or policies of bond insurance, remarketing agreements and agreements for the purpose of moderating interest rate fluctuations.

(d) If any member whose signature or a facsimile of whose signature appears on any bonds or coupons ceases to be such member before delivery of such bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes the same as if he had remained in office until such delivery. Notwithstanding the provisions of sections 24 to 38, inclusive, of this act, or any recitals in any bonds issued under the provisions of this section, all such bonds shall be deemed to be negotiable instruments under the provisions of the general statutes.

(e) Unless otherwise provided by the ordinance creating the Energy Improvement District Board, bonds may be issued under the provisions of this section, without obtaining the consent of the state or of any political subdivision thereof, and without any other proceedings or the happening of other conditions or things than those proceedings, conditions or things which are specifically required by sections 23 to 38, inclusive, of this act.

(f) An Energy Improvement District Board may, out of any of any funds available to it, purchase its bonds or notes. The Energy Improvement District Board may hold, pledge, cancel or resell such bonds, subject to and in accordance with agreements with bondholders.

(g) An Energy Improvement District Board shall cause a copy of any bond resolutions adopted by it to be filed for public inspection in its office and in the office of the clerk of each participating municipality and may thereupon cause to be published at least once, in a newspaper published or circulating in each participating municipality, a notice stating the fact and date of such adoption and the places where such bond resolution has been so filed for public inspection and the date of the first publication of such notice and also stating that any action or proceeding of any kind or nature in any court questioning the validity or proper authorization of bonds provided for by the bond resolution, or the validity of any covenants, agreements or contracts provided for by the bond resolution, shall be commenced not later than twenty days after the first publication of such notice. If any such notice is published and if no action or proceeding question the validity or proper authorization of bonds provided for by the bond resolution referred to in such notice, or the validity of any covenants, agreements, contracts provided for by the bond resolution is commenced or instituted not later than twenty days after the first publication of said notice, then all residents and taxpayers and owners of property in each participating municipality and all other persons shall be forever barred and foreclosed from instituting or commencing any action or proceeding in any court, or from pleading any defense to any action or proceeding, questioning the validity or proper authorization of such bonds, or the validity of such covenants, agreements or contracts, and said bonds, covenants, agreements and contracts shall be conclusively deemed to be valid and binding obligations in accordance with their terms and tenor.

(h) Notwithstanding any provision of the general statutes, (1) the state shall not have any liability or responsibility with regard to any obligation issued by the board, and (2) no political subdivision of the state shall have any liability or responsibility with regard to any obligation issued by the board except as expressly provided by sections 24 to 38, inclusive, of this act.

Sec. 27. (NEW) (Effective October 1, 2007) An Energy Improvement District Board may secure any bonds issued under the provisions of section 26 of this act by a trust indenture by way of conveyance, deed of trust or mortgage of any project or any other property of the board, whether or not financed in whole or in part from the proceeds of such bonds, or by a trust agreement by and between the board and a corporate trustee, which may be any trust company or bank having the powers of a trust company within or without the state or by both such conveyance, deed of trust or mortgage and indenture or trust agreement. Such trust indenture or agreement may pledge or assign any or all fees, rents and other charges to be received or proceeds of any contract or contracts pledged, and may convey or mortgage any property of the board. Such trust indenture or agreement may contain such provisions for protecting and enforcing the right and remedies of the bondholders as may be reasonable and proper and not in violation of law, including provisions that have been specifically authorized to be included in any resolution or resolutions of the board authorizing the issue of bonds. Any bank or trust company incorporated under the laws of the state may act as depository of the proceeds of such bonds or of revenues or other moneys and may furnish such indemnifying bonds or pledge such securities as may be required by the board. Such trust indenture may set forth rights and remedies of the bondholders and of the trustee, and may restrict the individual right of action by bondholders. In addition to the foregoing, such trust indenture or agreement may contain such other provisions as the board may deem reasonable and proper for the security of the bondholders. All expenses incurred in carrying out the provisions of such trust indenture or agreement may be treated as part of the cost of a project.

Sec. 28. (NEW) (Effective October 1, 2007) (a) An Energy Improvement District Board may fix, revise, charge and collect rates, rents, fees and charges for the use of and for the services furnished or to be furnished by each project and to contract with any person, partnership, association or corporation, or other body, public or private, in respect thereof. Such rates, rents, fees and charges shall be fixed and adjusted in respect of the aggregate of rates, rents, fees and charges from such project so as to provide funds sufficient with other revenues, if any, (1) to pay the cost of maintaining, repairing and operating the project and each and every portion thereof, to the extent that the payment of such cost has not otherwise been adequately provided for, (2) to pay the principal of and the interest on outstanding revenue bonds of the board issued in respect of such project as the same shall become due and payable, and (3) to create and maintain reserves required or provided for in any resolution authorizing, or trust agreement securing, such revenue bonds of the board. Such rates, rents, fees and charges shall not be subject to supervision or regulation by any department, commission, board, body, bureau or agency of this state other than the board. A sufficient amount of the revenues derived in respect of a project, except such part of such revenues as may be necessary to pay the cost of maintenance, repair and operation and to provide reserves and for renewals, replacements, extensions, enlargements and improvements as may be provided for in the resolution authorizing the issuance of any revenue bonds of the board or in the trust agreement securing the same, shall be set aside at such regular intervals as may be provided in such resolution or trust agreement in a sinking or other similar fund which is hereby pledged to, and charged with, the payment of the principal of and the interest on such revenue bonds as the same shall become due, and the redemption price or the purchase price of bonds retired by call or purchase as therein provided. Such pledge shall be valid and binding from the time when the pledge is made; the rates, rents, fees and charges and other revenues or other moneys so pledged and thereafter received by the board shall immediately be subject to the lien of any such pledge, without any physical delivery thereof or further act, and the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the board, irrespective of whether such parties have notice thereof. Neither the resolution nor any trust indenture or agreement by which a pledge is created need be filed or recorded except in the records of the board. The use and disposition of moneys to the credit of such sinking or other similar fund shall be subject to the provisions of the resolution authorizing the issuance of such bonds or of such trust agreement. Except as may otherwise be provided in such resolution or such trust indenture or agreement, such sinking or other similar fund shall be a fund for all revenue bonds issued to finance a project of such board without distinction or priority of one over another.

(b) All moneys received by the board pursuant to sections 24 to 38, inclusive, of this act, whether as proceeds from the sale of bonds or as revenues, shall be deemed to be trust funds to be held and applied solely as provided pursuant to this section.

Sec. 29. (NEW) (Effective October 1, 2007) Any holder of bonds, notes, certificates or other evidences of borrowing issued under the provisions of section 26 of this act, or of any of the coupons appertaining thereto, and the trustee under any trust indenture or agreement, except to the extent the right may be restricted by such trust indenture or agreement, may, either at law or in equity, by suit, action, injunction, mandamus or other proceedings, protect and enforce any and all rights under the provisions of the general statutes or granted by sections 24 to 38, inclusive, of this act, or under such trust indenture or agreement or the resolution authorizing the issuance of such bonds, notes or certificates, and may enforce and compel the performance of all duties required by said section or by such trust indenture or agreement or solution to be performed by the Energy Improvement District Board or by any officer or agent thereof, including the fixing, charging and collection of fees, rents and other charges.

Sec. 30. (NEW) (Effective October 1, 2007) An Energy Improvement District Board, in the exercise of its powers granted pursuant to sections 24 to 38, inclusive, of this act, shall be for the benefit of the inhabitants of the state, for the increase of their commerce and for the promotion of their safety, health, welfare, convenience and prosperity, and as the operation and maintenance of any project which the board is authorized to undertake constitute the performance of an essential governmental function, no board shall be required to pay any taxes or assessments upon any project acquired and constructed by it under the provisions of said sections. The bonds, notes, certificates or other evidences of debt issued under the provisions of section 26 of this act, their transfer and the income therefrom, including any profit made on the sale thereof, shall at all times be free and exempt from taxation by the state and by any political subdivision thereof.

Sec. 31. (NEW) (Effective October 1, 2007) Bonds issued by an Energy Improvement District Board pursuant to section 26 of this act, shall be securities in which all public officers and public bodies of the state and its political subdivisions, all insurance companies, trust companies, banking associations, investment companies and executors, administrators, trustees and other fiduciaries may properly and legally invest funds, including capital in their control or belonging to them. Such bonds shall be securities that may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the state for any purpose for which the deposit of bonds or obligations is now or may hereafter be authorized by law.

Sec. 32. (NEW) (Effective October 1, 2007) A municipality may, by ordinance, and any other governmental unit may, without any referendum or public or competitive bidding, and any person may sell, lease, lend, grant or convey to an Energy Improvement District Board, or to permit a board to use, maintain or operate as part of any distributed resource facility, any real or personal property that may be necessary or useful and convenient for the purposes of the board and accepted by the board. Any such sale, lease, loan, grant, conveyance or permit may be made or given with or without consideration and for a specified or an unlimited period of time and under any agreement and on any terms and conditions that may be approved by such municipality, governmental unit or person and that may be agreed to by the board in conformity with its contract with the holders of any bonds. Subject to any such contracts with the holders of bonds, the board may enter into and perform any and all agreements with respect to property so purchased, leased, borrowed, received or accepted by it, including agreements for the assumption of principal or interest or both of indebtedness of such municipality, governmental unit or person or of any mortgage or lien existing with respect to such property or for the operation and maintenance of such property as part of any energy improvement district distributed resources facility.

Sec. 33. (NEW) (Effective October 1, 2007) A municipality, governmental unit or person may enter into and perform any lease or other agreement with any Energy Improvement District Board for the lease or other agreement with any municipality, governmental unit or person of all or any part of any energy improvement district distributed resource facility or facilities. Any such lease or other agreement may provide for the payment to the board by such municipality, governmental unit or person, annually or otherwise, of such sum or sums of money, computed at fixed amount or by any formula or in any other manner, as may be so fixed or computed. Any such lease or other agreement may be made and entered into for a term beginning currently or at some future or contingent date and with or without consideration and for a specified or unlimited time and on any terms and conditions which may be approved by such municipality, governmental unit or person and which may be agreed to by the board in conformity with its contract with the holders of any bonds, and shall be valid and binding on such municipality, governmental unit or person whether or not an appropriation is made thereby prior to authorization or execution of such lease or other agreement. Such municipality, governmental unit or person shall do all acts and things necessary, convenient or desirable to carry out and perform any such lease or other agreement entered into by it and to provide for the payment or discharge of any obligation thereunder in the same manner as other obligations of such municipality, governmental unit or person.

Sec. 34. (NEW) (Effective October 1, 2007) For the purpose of aiding an Energy Improvement District Board, a municipality, by ordinance or by resolution of its legislative body, shall have power from time to time and for such period and upon such terms, with or without consideration, as may be provided by such resolution or ordinance and accepted by the board, (1) to appropriate moneys for the purposes of the board, and to loan or donate such money to the board in such installments and upon such terms as may be agreed upon with the board, (2) to covenant and agree with the board to pay to or on the order of the board annually or at shorter intervals as a subsidy for the promotion of its purposes not more than such sums of money as may be stated in such resolution or ordinance or computed in accordance therewith, (3) upon authorization by it in accordance with law of the performance of any act or thing which it is empowered by law to authorize and perform and after appropriation of the moneys, if any, necessary for such performance, to covenant and agree with the board to do and perform such act or thing and as to the time, manner and other details of its doing and performance, and (4) to appropriate money for all or any part of the cost of acquisition or construction of such facility, and, in accordance with the limitations and any exceptions thereto and in accordance with procedure prescribed by law, to incur indebtedness, borrow money and issue its negotiable bonds for the purpose of financing such distributed resource facility and appropriation, and to pay the proceeds of such bonds to the board.

Sec. 35. (NEW) (Effective October 1, 2007) For the purpose of aiding an Energy Improvement District Board in the planning, undertaking, acquisition, construction or operation of any distributed resource facility, a participating municipality may, pursuant to resolution adopted by its legislative body in the manner provided for adoption of a resolution authorizing bonds of such municipality and with or without consideration and upon such terms and conditions as may be agreed to by and between the municipality and the board, unconditionally guarantee the punctual payment of the principal of and interest on any bonds of the board and pledge the full faith and credit of the municipality to the payment thereof. Any guarantee of bonds of the board made pursuant to this section shall be evidenced by endorsement thereof on such bonds, executed in the name of the municipality and on its behalf by such officer thereof as may be designated in the resolution authorizing such guaranty, and such municipality shall thereupon and thereafter be obligated to pay the principal of and interest on said bonds in the same manner and to the same extent as in the case of bonds issued by it. As part of the guarantee of the municipality for payment of principal and interest on the bonds, the municipality may pledge to and agree with the owners of bonds issued under this chapter and with those persons who may enter into contracts with the municipality or the board or any successor agency pursuant to the provisions of this chapter that it will not limit or alter the rights thereby vested in the bond owners, the board or any contracting party until such bonds, together with the interest thereon, are fully met and discharged and such contracts are fully performed on the part of the municipality or the board, provided nothing in this subsection shall preclude such limitation or alteration if and when adequate provisions shall be made by law for the protection of the owners of such bonds of the municipality or the board or those entering into such contracts with the municipality or the board. The board is authorized to include this pledge and undertaking for the municipality in such bonds or contracts. To the extent provided in such agreement or agreements, the obligations of the municipality thereunder shall be obligatory upon the municipality and the inhabitants and property thereof, and thereafter the municipality shall appropriate in each year during the term of such agreement, and there shall be available on or before the date when the same are payable, an amount of money that, together with other revenue available for such purpose, shall be sufficient to pay such principal and interest guaranteed by it and payable thereunder in that year, and there shall be included in the tax levy for each such year in an amount that, together with other revenues available for such purpose, shall be sufficient to meet such appropriation. Any such agreement shall be valid, binding and enforceable against the municipality if approved by action of the legislative body of such municipality. Any such guaranty of bonds of the board may be made, and any resolution authorizing such guaranty may be adopted, notwithstanding any statutory debt or other limitations, but the principal amount of bonds so guaranteed shall, after their issuance, be included in the gross debt of such municipality for the purpose of determining the indebtedness of such municipality under subsection (b) of section 7-374 of the general statutes. The principal amount of bonds so guaranteed and included in gross debt shall be deducted and is declared to be and to constitute a deduction from such gross debt under and for all the purposes of subsection (b) of said section 7-374, (1) from and after the time of issuance of said bonds until the end of the fiscal year beginning next after the completion of acquisition and construction of the distributed resource facility to be financed from the proceeds of such bonds, and (2) during any subsequent fiscal year if the revenues of the board in the preceding fiscal year are sufficient to pay its expenses of operation and maintenance in such year and all amounts payable in such year on account of the principal and interest on all such guaranteed bonds, all bonds of the municipality issued as provided in this section and all bonds of the Energy Improvement District Board issued under section 26 of this act.

Sec. 36. (NEW) (Effective October 1, 2007) Any lease or other agreement, and any instruments making or evidencing the same, may be pledged or assigned by the board to secure its bonds and thereafter may not be modified except as provided by the terms of such instrument or by the terms of such pledge or assignment.

Sec. 37. (NEW) (Effective October 1, 2007) All property of an Energy Improvement District Board shall be exempt from levy and sale by virtue of an execution and no execution or other judicial process shall issue against the same nor shall any judgment against the board be a charge or lien upon its property, provided nothing in this section shall apply to or limit the rights of the holder of any bonds to pursue any remedy for the enforcement of any pledge or lien given by the board on its facility revenues or other moneys.

Sec. 38. (NEW) (Effective October 1, 2007) An Energy Improvement District Board and the municipality in which any property of the board is located may enter into agreements with respect to the payment by the board to such municipality of annual sums of money in lieu of taxes on such property in such amount as may be agreed upon between the board and the municipality. The board may make, and the municipality may accept, such payments and apply them in the manner in which taxes may be applied in such municipality, provided no such annual payment with respect to any parcel of such property shall exceed the amount of taxes paid thereon for the taxable year immediately prior to the time of its acquisition by the board.

Sec. 39. Subsection (b) of section 16-243a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(b) Each electric public service company, municipal electric energy cooperative and municipal electric utility shall: (1) Purchase any electrical energy and capacity made available, directly by a private power producer or indirectly under subdivision (4) of this subsection; (2) sell backup electricity to any private power producer in its service territory; (3) make such interconnections in accordance with the regulations adopted pursuant to subsection (h) of this section necessary to accomplish such purchases and sales; (4) upon approval by the Department of Public Utility Control of an application filed by a willing private power producer, transmit energy or capacity from the private power producer to any other such company, cooperative or utility or to another facility operated by the private power producer; and (5) offer to operate in parallel with a private power producer. In making a decision on an application filed under subdivision (4) of this subsection, the department shall consider whether such transmission would (A) adversely impact the customers of the company, cooperative or utility which would transmit energy or capacity to the private power producer, (B) result in an uncompensated loss for, or unduly burden, such company, cooperative, utility or private power producer, (C) impair the reliability of service of such company, cooperative or utility, or (D) impair the ability of the company, cooperative or utility to provide adequate service to its customers. The department shall issue a decision on such an application not later than one hundred twenty days after the application is filed, provided, the department may, before the end of such period and upon notifying all parties and intervenors to the proceeding, extend the period by thirty days. If the department does not issue a decision within one hundred twenty days after receiving such an application, or within one hundred fifty days if the department extends the period in accordance with the provisions of this subsection, the application shall be deemed to have been approved. The requirements under subdivisions (3), (4) and (5) of this subsection shall be subject to reasonable standards for operating safety and reliability and the nondiscriminatory assessment of costs against private power producers, approved by the Department of Public Utility Control with respect to electric public service companies or determined by municipal electric energy cooperatives and municipal electric utilities.

Sec. 40. Section 16-243a of the general statutes is amended by adding subsection (h) as follows (Effective October 1, 2007):

(NEW) (h) Not later than January 1, 2008, the Department of Public Utility Control shall adopt regulations in accordance with the provisions of chapter 54 containing interconnection standards that promote the policies of this section and meet or exceed national standards of interconnectivity. If the department does not adopt regulations by October 1, 2008, each electric distribution company, municipal electric energy cooperative and municipal electric utility shall meet the standards set forth in Title 4, Chapter 4, Subchapter 9, "New Metering and Interconnection Standards for Class I Renewable Energy Systems" of the New Jersey Administrative Code.

Sec. 41. Subsection (a) of section 16-245n of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) For purposes of this section, "renewable energy" means solar photovoltaic energy, solar thermal energy, wind, ocean thermal energy, wave or tidal energy, fuel cells, landfill gas, hydropower that will meet the low-impact standards of the Low-Impact Hydropower Institute, hydrogen production and hydrogen conversion technologies, low emission advanced biomass conversion technologies, alternative fuel, including ethanol, biodiesel, or other fuel produced in Connecticut and derived from agricultural produce, food waste or waste vegetable oil, usable electricity from combined heat and power systems with waste heat recovery systems, thermal storage systems and other energy resources and emerging technologies which have significant potential for commercialization and which do not involve the combustion of coal, petroleum or petroleum products, municipal solid waste or nuclear fission.

Sec. 42. Section 16-243h of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

On and after January 1, 2000, each electric supplier or any electric distribution company providing standard offer, transitional standard offer, standard service or back-up electric generation service, pursuant to section 16-244c, as amended by this act, shall give a credit for any electricity generated by a residential or commercial customer from a Class I renewable energy source or a hydropower facility that has a nameplate capacity rating of two megawatts or less. The electric distribution company providing electric distribution services to such a customer shall make such interconnections necessary to accomplish such purpose. An electric distribution company, at the request of any residential customer served by such company and if necessary to implement the provisions of this section, shall provide for the installation of metering equipment that (1) measures electricity consumed by such customer from the facilities of the electric distribution company, (2) deducts from the measurement the amount of electricity produced by the customer and not consumed by the customer, and (3) registers, for each billing period, the net amount of electricity either (A) consumed and produced by the customer, or (B) the net amount of electricity produced by the customer. If, in a given monthly billing period, a customer-generator supplies more electricity to the electric distribution system than the electric distribution company or electric supplier delivers to the customer-generator, the electric distribution company and electric supplier shall credit the customer-generator for the excess by reducing the customer-generator's bill for the next monthly billing period to compensate for the excess electricity from the customer-generator in the previous billing period. The electric distribution company and electric supplier shall carry over credit earned from monthly billing period to monthly billing period, and the credit shall accumulate until the end of the annualized period. At the end of each annualized period, the electric distribution company and electric supplier shall compensate the customer-generator for any excess kilowatt-hours generated, at the avoided cost of wholesale power. A residential customer who generates electricity from a generating unit with a name plate capacity of more than ten kilowatts of electricity pursuant to the provisions of this section shall be assessed for the competitive transition assessment, pursuant to section 16-245g and the systems benefits charge, pursuant to section 16-245l based on the amount of electricity consumed by the customer from the facilities of the electric distribution company without netting any electricity produced by the customer. For purposes of this section, "residential customer" means a customer of a single-family dwelling or multifamily dwelling consisting of two to four units.

Sec. 43. Section 16-245a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) [On and after January 1, 2006, an] An electric supplier and an electric distribution company providing standard service or supplier of last resort service, pursuant to section 16-244c, as amended by this act, shall demonstrate:

(1) On and after January 1, 2006, that not less than two per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources; [.]

(2) On and after January 1, 2007, not less than three and one-half per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources; [.]

(3) On and after January 1, 2008, not less than five per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources; [.]

(4) On and after January 1, 2009, not less than [six] seven per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources; [.]

(5) On and after January 1, 2010, not less than [seven] nine per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(6) On and after January 1, 2011, not less than eleven per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources.

(b) An electric supplier or electric distribution company may satisfy the requirements of this section (1) by purchasing certificates issued by the New England Power Pool Generation Information System, provided the certificates are for (A) energy produced by a generating unit using Class I or Class II renewable energy sources and the generating unit is located in the jurisdiction of the regional independent system operator, or (B) energy imported into the control area of the regional independent system operator pursuant to New England Power Pool Generation Information System Rule 2.7(c), as in effect on January 1, 2006; [or] (2) for those renewable energy certificates under contract to serve end-use customers in the state on or before October 1, 2006, by participating in a renewable energy trading program within said jurisdictions as approved by the Department of Public Utility Control; or (3) by purchasing electricity from residential customers who are net producers.

(c) Any supplier who provides electric generation services solely from a Class II renewable energy source shall not be required to comply with the provisions of this section.

(d) An electric supplier or an electric distribution company shall base its demonstration of generation sources, as required under subsection (a) of this section on historical data, which may consist of data filed with the regional independent system operator.

(e) (1) A supplier or an electric distribution company may make up any deficiency within its renewable energy portfolio within the first three months of the succeeding calendar year or as otherwise provided by generation information system operating rules approved by New England Power Pool or its successor to meet the generation source requirements of subsection (a) of this section for the previous year.

(2) No such supplier or electric distribution company shall receive credit for the current calendar year for generation from Class I or Class II renewable energy sources pursuant to this section where such supplier or distribution company receives credit for the preceding calendar year pursuant to subdivision (1) of this subsection.

(f) The department shall adopt regulations, in accordance with the provisions of chapter 54, to implement the provisions of this section.

Sec. 44. (NEW) (Effective July 1, 2007) (a) A municipal electric energy cooperative, created pursuant to chapter 101a of the general statutes, shall submit a comprehensive report on the activities of the municipal electric utilities with regard to promotion of renewable energy resources. Such report shall identify the standards and activities of municipal electric utilities in the promotion, encouragement and expansion of the deployment and use of renewable energy sources within the service areas of the municipal electric utilities for the prior calendar year. The cooperative shall submit the report to the Renewable Energy Investment Advisory Committee established pursuant to section 16-245n of the general statutes, as amended by this act, not later than ninety days after the end of each calendar year that describes the activities undertaken pursuant to this subsection during the previous calendar year for the promotion and development of renewable energy sources for all electric customer classes.

(b) Such cooperative shall develop standards for the promotion of renewable resources that apply to each municipal electric utility. On or before January 1, 2008, and annually thereafter, such cooperative shall submit such standards to the Renewable Energy Investment Advisory Committee.

Sec. 45. (NEW) (Effective from passage) (a) Notwithstanding the provisions of title 16 of the general statutes, a customer who implements energy conservation or customer-side distributed resources, as defined in section 16-1 of the general statutes, as amended by this act, on or after January 1, 2008, shall be eligible for Class III credits, pursuant to section 16-243q of the general statutes, as amended by this act. The Class III credit shall be not less than one cent per kilowatt hour or fifty per cent of the value of the Class I renewable energy credit, whichever is greater. The credits earned pursuant to this section shall be aggregated and directed to the customer who implements energy conservation or customer-side distribution resources pursuant to this section with the remainder directed to the Conservation and Load Management Funds. Not later than July 1, 2007, the Department of Public Utility Control shall conduct a contested case proceeding in accordance with the provisions of chapter 54 of the general statutes, to develop a procedure for awarding and aggregating credits pursuant to this section.

(b) In order to be eligible for ongoing Class III credits, the customer shall, annually, submit an application, in a form prescribed by the Department of Public Utility Control, to said department. The application shall require (1) certification by an independent licensed engineer, and (2) (A) the number of kilowatt hours generated from the customer-side distributed resource system for the annual period, or (B) the number of kilowatt hours reduced by the energy conservation investments for the annual period.

Sec. 46. Section 16-243q of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) On and after January 1, 2007, each electric distribution company providing standard service pursuant to section 16-244c, as amended by this act, and each electric supplier as defined in section 16-1, as amended by this act, shall demonstrate to the satisfaction of the Department of Public Utility Control that not less than one per cent of the total output of such supplier or such standard service of an electric distribution company shall be obtained from Class III [resources] sources. On and after January 1, 2008, not less than two per cent of the total output of any such supplier or such standard service of an electric distribution company shall, on demonstration satisfactory to the Department of Public Utility Control, be obtained from Class III [resources] sources. On or after January 1, 2009, not less than three per cent of the total output of any such supplier or such standard service of an electric distribution company shall, on demonstration satisfactory to the Department of Public Utility Control, be obtained from Class III [resources] sources. On and after January 1, 2010, not less than four per cent of the total output of any such supplier or such standard service of an electric distribution company shall, on demonstration satisfactory to the Department of Public Utility Control, be obtained from Class III [resources] sources. Electric power obtained from customer-side distributed resources that does not meet air and water quality standards of the Department of Environmental Protection is not eligible for purposes of meeting the percentage standards in this section.

(b) Except as provided in subsection (d) of this section, the Department of Public Utility Control shall assess each electric supplier and each electric distribution company that fails to meet the percentage standards of subsection (a) of this section a charge of up to five and five-tenths cents for each kilowatt hour of electricity that such supplier or company is deficient in meeting such percentage standards. Seventy-five per cent of such assessed charges shall be deposited in the Energy Conservation and Load Management Fund established in section 16-245m, and twenty-five per cent shall be deposited in the Renewable Energy Investment Fund established in section 16-245n, as amended by this act, except that such seventy-five per cent of assessed charges with respect to an electric supplier shall be divided among the Energy Conservation and Load Management Funds of electric distribution companies in proportion to the amount of electricity such electric supplier provides to end use customers in the state using the facilities of each electric distribution company.

(c) An electric supplier or electric distribution company may satisfy the requirements of this section by participating in a conservation and distributed resources trading program approved by the Department of Public Utility Control. Credits created by conservation and customer-side distributed resources shall be allocated to the person that conserved the electricity or installed the project for customer-side distributed resources to which the credit is attributable and to the Energy Conservation and Load Management Fund. Such credits shall be made in the following manner: A minimum of twenty-five per cent of the credits shall be allocated to the person that conserved the electricity or installed the project for customer-side distributed resources to which the energy credit is attributable and the remainder of the credits shall be allocated to the Energy Conservation and Load Management Fund, based on a schedule created by the department no later than January 1, 2007, and reviewed annually thereafter. The department may, in a proceeding and for good cause shown, allocate a larger proportion of such credits to the person who conserved the electricity or installed the customer-side distributed resources. The department shall consider the proportion of investment made by a ratepayer through various ratepayer-funded incentive programs and the resulting reduction in federally mandated congestion charges. The portion allocated to the Energy Conservation and Load Management Fund shall be used for measures that respond to energy demand and for peak reduction programs.

(d) An electric distribution company providing standard service may contract with its wholesale suppliers to comply with the conservation and customer-side distributed resources standards set forth in subsection (a) of this section. The Department of Public Utility Control shall annually conduct a contested case, in accordance with the provisions of chapter 54, to determine whether the electric distribution company's wholesale suppliers met the conservation and distributed resources standards during the preceding year. Any such contract shall include a provision that requires such supplier to pay the electric distribution company in an amount of up to five and one-half cents per kilowatt hour if the wholesale supplier fails to comply with the conservation and distributed resources standards during the subject annual period. The electric distribution company shall immediately transfer seventy-five per cent of any payment received from the wholesale supplier for the failure to meet the conservation and distributed resources standards to the Energy Conservation and Load Management Fund and twenty-five per cent to the Renewable Energy Investment Fund. Any payment made pursuant to this section shall not be considered revenue or income to the electric distribution company.

(e) The Department of Public Utility Control shall conduct a contested proceeding to develop the administrative processes and program specifications that are necessary to implement a Class III sources conservation and distributed resources trading program. The proceeding shall include, but not be limited to, an examination of issues such as (1) the manner in which qualifying activities are certified, tracked and reported, (2) the manner in which Class III certificates are created, accounted for and transferred, [(3) the feasibility and benefits of expanding eligible Class III resources to include those resulting from electricity savings made by residential customers, (4)] (3) verification of the accuracy of conservation and customer-side distributed resources credits, [(5)] (4) verification of the fact that resources or credits used to satisfy the requirement of this section have not been used to satisfy any other portfolio or similar requirement, [(6)] (5) the manner in which credits created by conservation and customer-side distributed resources may best be allocated to maximize the impact of the trading program, and [(7)] (6) setting such alternative payment amounts at a level that encourages development of conservation and customer-side distributed resources. The department may retain the services of a third party entity with expertise in the development of energy efficiency trading or verification programs to assist in the development and operation of the program. The department shall issue a decision no later than February 1, [2006] 2008.

Sec. 47. Subdivision (44) of subsection (a) of section 16-1 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(44) "Class III [renewable energy] source" means the electricity output from combined heat and power systems with an operating efficiency level of no less than fifty per cent that are part of customer-side distributed resources developed at commercial and industrial facilities in this state on or after January 1, 2006, a waste heat recovery system installed on or after April 1, 2007, that produces electrical or thermal energy by capturing preexisting waste heat or pressure from industrial or commercial processes, or the electricity savings created at commercial and industrial facilities and residences in this state from conservation and load management programs begun on or after January 1, 2006.

Sec. 48. Subsection (a) of section 22a-6 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) The commissioner may: (1) Adopt, amend or repeal, in accordance with the provisions of chapter 54, such environmental standards, criteria and regulations, and such procedural regulations as are necessary and proper to carry out his functions, powers and duties; (2) enter into contracts with any person, firm, corporation or association to do all things necessary or convenient to carry out the functions, powers and duties of the department; (3) initiate and receive complaints as to any actual or suspected violation of any statute, regulation, permit or order administered, adopted or issued by him. The commissioner shall have the power to hold hearings, administer oaths, take testimony and subpoena witnesses and evidence, enter orders and institute legal proceedings including, but not limited to, suits for injunctions, for the enforcement of any statute, regulation, order or permit administered, adopted or issued by him; (4) in accordance with regulations adopted by him, require, issue, renew, revoke, modify or deny permits, under such conditions as he may prescribe, governing all sources of pollution in Connecticut within his jurisdiction; (5) in accordance with constitutional limitations, enter at all reasonable times, without liability, upon any public or private property, except a private residence, for the purpose of inspection and investigation to ascertain possible violations of any statute, regulation, order or permit administered, adopted or issued by him and the owner, managing agent or occupant of any such property shall permit such entry, and no action for trespass shall lie against the commissioner for such entry, or he may apply to any court having criminal jurisdiction for a warrant to inspect such premises to determine compliance with any statute, regulation, order or permit administered, adopted or enforced by him, provided any information relating to secret processes or methods of manufacture or production ascertained by the commissioner during, or as a result of, any inspection, investigation, hearing or otherwise shall be kept confidential and shall not be disclosed except that, notwithstanding the provisions of subdivision (5) of subsection (b) of section 1-210, such information may be disclosed by the commissioner to the United States Environmental Protection Agency pursuant to the federal Freedom of Information Act of 1976, (5 USC 552) and regulations adopted thereunder or, if such information is submitted after June 4, 1986, to any person pursuant to the federal Clean Water Act (33 USC 1251 et seq.); (6) undertake any studies, inquiries, surveys or analyses he may deem relevant, through the personnel of the department or in cooperation with any public or private agency, to accomplish the functions, powers and duties of the commissioner; (7) require the posting of sufficient performance bond or other security to assure compliance with any permit or order; (8) provide by notice printed on any form that any false statement made thereon or pursuant thereto is punishable as a criminal offense under section 53a-157b; (9) construct or repair or contract for the construction or repair of any dam or flood and erosion control system under his control and management, make or contract for the making of any alteration, repair or addition to any other real asset under his control and management, including rented or leased premises, involving an expenditure of five hundred thousand dollars or less, and, with prior approval of the Commissioner of Public Works, make or contract for the making of any alteration, repair or addition to such other real asset under his control and management involving an expenditure of more than five hundred thousand dollars but not more than one million dollars; (10) in consultation with affected town and watershed organizations, enter into a lease agreement with a private entity to allow the private entity to generate hydroelectricity; (11) by regulations adopted in accordance with the provisions of chapter 54, require the payment of a fee sufficient to cover the reasonable cost of the search, duplication and review of records requested under the Freedom of Information Act, as defined in section 1-200, and the reasonable cost of reviewing and acting upon an application for and monitoring compliance with the terms and conditions of any state or federal permit, license, registration, order, certificate or approval required pursuant to subsection (i) of section 22a-39, subsections (c) and (d) of section 22a-96, subsections (h), (i) and (k) of section 22a-424, and sections 22a-6d, 22a-32, 22a-134a, 22a-134e, 22a-135, 22a-148, 22a-150, 22a-174, 22a-208, 22a-208a, 22a-209, 22a-342, 22a-345, 22a-354i, 22a-361, 22a-363c, 22a-368, 22a-372, 22a-379, 22a-403, 22a-409, 22a-416, 22a-428 to 22a-432, inclusive, 22a-449 and 22a-454 to 22a-454c, inclusive, and Section 401 of the federal Clean Water Act, (33 USC 1341). Such costs may include, but are not limited to the costs of (A) public notice, (B) reviews, inspections and testing incidental to the issuance of and monitoring of compliance with such permits, licenses, orders, certificates and approvals, and (C) surveying and staking boundary lines. The applicant shall pay the fee established in accordance with the provisions of this section prior to the final decision of the commissioner on the application. The commissioner may postpone review of an application unt