"AN ACT CONCERNING ELECTRICITY AND ENERGY EFFICIENCY. "

Strike everything after the enacting clause and substitute the following in lieu thereof:

"Section 1. (NEW) (Effective July 1, 2007) (a) Between July 1, 2007, and July 1, 2017, inclusive, 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 furnaces or boilers that meet or exceed federal Energy Star standards and propane and oil furnaces and boilers that are not less than eighty-four per cent efficient. Such rebates shall not exceed five million dollars in aggregate per year. 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. Eligibility for said rebate program shall be determined as follows:

(1) (A) For the taxable year commencing on or after January 1, 2007, but prior to January 1, 2008, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds fifty-five thousand five hundred dollars, the amount of the rebate shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(B) For the taxable year commencing on or after January 1, 2008, but prior to January 1, 2009, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds fifty-six thousand five hundred dollars, the amount of the rebate shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(C) For the taxable year commencing on or after January 1, 2009, but prior to January 1, 2010, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds fifty-eight thousand five hundred dollars, the amount of the rebate shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(D) For the taxable year commencing on or after January 1, 2010, but prior to January 1, 2011, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds sixty thousand five hundred dollars, the amount of the rebate shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(E) For the taxable year commencing on or after January 1, 2011, but prior to January 1, 2012, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds sixty-two thousand five hundred dollars, the amount of the rebate shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(F) For the taxable year commencing on or after January 1, 2012, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds sixty-four thousand five hundred dollars, the amount of the rebate shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(2) In the case of any such taxpayer who files under the federal income tax for such taxable year as a married individual filing separately whose Connecticut adjusted gross income exceeds fifty thousand two hundred fifty dollars, the amount of the rebate shall be reduced by ten per cent for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(3) In the case of a taxpayer who files under the federal income tax for such taxable year as a head of household whose Connecticut adjusted gross income exceeds seventy-eight thousand five hundred dollars, the amount of the rebate shall be reduced by ten per cent for each ten thousand dollars or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(4) In the case of a taxpayer who files under federal income tax for such taxable year as married individuals filing jointly whose Connecticut adjusted gross income exceeds one hundred thousand five hundred dollars, the amount of the rebate shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(b) On or before January 1, 2009, the Energy Conservation Management Board shall report to the joint standing committee of the General Assembly having cognizance of matters relating to energy regarding the cost-effectiveness of the rebate program established pursuant to subsection (a) of this section.

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 per year. 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. Said program shall be in effect from January 1, 2008, to September 1, 2008. 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) provide 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. The board, in consultation with the Low-Income Energy Advisory Board, established pursuant to section 16a-41b of the general statutes, shall determine the parameters of the program with regard to residential customers who live in apartments.

(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, as amended by this act.

(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 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.

(d) The Energy Conservation Management Board shall provide for the environmentally responsible disposal of air conditioning units returned pursuant to subsection (c) of this section.

(e) On or before January 1, 2009, the Energy Conservation Management Board shall report to the joint standing committee of the General Assembly having cognizance of matters relating to energy the results of the rebate program established in subsection (a) of this section.

Sec. 4. (NEW) (Effective from passage) On and after January 1, 2008, the Department of Public Utility Control shall order and direct that 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 have the actual ability to operate on demand for a forty-eight-hour period using either oil or natural gas, provided the department may determine that dual fuel capability is not required for a specific generating unit if imposing such requirement is not in the best interest of Connecticut consumers.

Sec. 5. (Effective from passage) Not later than July 1, 2007, the Department of Public Utility Control shall initiate an uncontested proceeding 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 newer 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 February 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. 6. 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, and annually thereafter, 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. 7. 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. 8. (NEW) (Effective from passage) Not later than September 1, 2007, the Connecticut Siting Council, in consultation with the Emergency Management and Homeland Security Coordinating Council, established pursuant to section 28-1b of the general statutes, and the Department of Public Utility Control shall initiate a contested case proceeding, in accordance with the provisions of chapter 54 of the general statutes, to investigate energy security with regard to the siting of electric generating facilities and transmission facilities, including consideration of planning, preparedness, response and recovery capabilities. The Connecticut Siting Council may conduct such proceedings in an executive session with sensitive information submitted under a protective order.

Sec. 9. (Effective from passage) Not later than July 1, 2007, the Department of Public Utility Control shall initiate an uncontested proceeding, in consultation with the Connecticut Siting Council, 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, (4) the value for and appropriate level of firm fuel delivery contracts, and (5) 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 distribution and gas 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 February 1, 2008, the department shall submit a report containing its 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. 10. 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 five million dollars, or more, of which two million dollars or more is state funding, and is approved and funded on or after January 1, [2007] 2008, (2) renovation of a state facility that is projected to cost two million dollars or more, of which two million dollars or more is state funding, approved and funded on or after January 1, 2008, (3) new construction of a facility that is projected to cost five million dollars, or more, of which two million dollars or more is state funding, and is authorized by the General Assembly pursuant to chapter 173 on or after January 1, 2009, and (4) renovation of a public school facility as defined in subdivision (18) of section 10-282 that is projected to cost two million dollars or more, of which two million dollars or more is state funding, and is authorized by the General Assembly pursuant to chapter 173 on or after January 1, 2009, 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.

(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, including energy standards that exceed those set forth in the 2004 edition of the American Society of Heating, Ventilating and Air Conditioning Engineers (ASHRAE) Standard 90.1 by no less than twenty per cent, 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. 11. Section 10-285a of the general statutes is amended by adding subsection (i) as follows (Effective October 1, 2007):

(NEW) (i) The percentage determined pursuant to this section for a school building project grant for a school building project pursuant to section 16a-38k, as amended by this act, shall be increased by two percentage points, not to exceed one hundred. Prior to any grant being awarded under this chapter for a project pursuant to section 16a-38k, as amended by this act, the town or regional school district shall certify to the Department of Education that the school project will meet the standards established pursuant to said section 16a-38k.

Sec. 12. Section 16a-48 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) As used in this section:

(1) ["Department" means the Department of Public Utility Control] "Office" means the Office of Policy and Management;

(2) "Fluorescent lamp ballast" or "ballast" means a device designed to operate fluorescent lamps by providing a starting voltage and current and limiting the current during normal operation, but does not include such devices that have a dimming capability or are intended for use in ambient temperatures of zero degrees Fahrenheit or less or have a power factor of less than sixty-one hundredths for a single F40T12 lamp;

(3) "F40T12 lamp" means a tubular fluorescent lamp that is a nominal forty-watt lamp, with a forty-eight-inch tube length and one and one-half inches in diameter;

(4) "F96T12 lamp" means a tubular fluorescent lamp that is a nominal seventy-five-watt lamp with a ninety-six-inch tube length and one and one-half inches in diameter;

(5) "Luminaire" means a complete lighting unit consisting of a fluorescent lamp, or lamps, together with parts designed to distribute the light, to position and protect such lamps, and to connect such lamps to the power supply;

(6) "New product" means a product that is sold, offered for sale, or installed for the first time and specifically includes floor models and demonstration units;

(7) "Secretary" means the Secretary of the Office of Policy and Management;

(8) "State Building Code" means the building code adopted pursuant to section 29-252;

(9) "Torchiere lighting fixture" means a portable electric lighting fixture with a reflector bowl giving light directed upward so as to give indirect illumination;

(10) "Unit heater" means a self-contained, vented fan-type commercial space heater that uses natural gas or propane that is designed to be installed without ducts within the heated space. "Unit heater" does not include a product regulated by federal standards pursuant to 42 USC 6291, as amended from time to time, a product that is a direct vent, forced flue heater with a sealed combustion burner, or any oil fired heating system;

(11) "Transformer" means a device consisting of two or more coils of insulated wire that transfers alternating current by electromagnetic induction from one coil to another in order to change the original voltage or current value;

(12) "Low-voltage dry-type transformer" means a transformer that: (A) Has an input voltage of [600] six hundred volts or less; (B) is between [14] fourteen kilovolt-amperes and [2,501] two thousand five hundred one kilovolt-amperes in size; (C) is air-cooled; and (D) does not use oil as a coolant. "Low-voltage dry-type transformer" does not include such transformers excluded from the low-voltage dry-type distribution transformer definition contained in the California Code of Regulations, Title 20: Division 2, Chapter 4, Article 4: Appliance Efficiency Regulations;

(13) "Pass-through cabinet" means a refrigerator or freezer with hinged or sliding doors on both the front and rear of the refrigerator or freezer;

(14) "Reach-in cabinet" means a refrigerator, freezer, or combination thereof, with hinged or sliding doors or lids;

(15) "Roll-in" or "roll-through cabinet" means a refrigerator or freezer with hinged or sliding doors that allows wheeled racks of product to be rolled into or through the refrigerator or freezer;

(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] which are designed for the refrigerated or frozen storage of food and food products;

(17) "Traffic signal module" means a standard eight-inch or twelve-inch round traffic signal indicator consisting of a light source, lens and all parts necessary for operation and communication of movement messages to drivers through red, amber and green colors;

(18) "Illuminated exit sign" means an internally illuminated sign that is designed to be permanently fixed in place and used to identify an exit by means of a light source that illuminates the sign or letters from within where the background of the exit sign is not transparent;

(19) "Packaged air-conditioning equipment" means air-conditioning equipment that is built as a package and shipped as a whole to end-user sites;

(20) "Large packaged air-conditioning equipment" means air-cooled packaged air-conditioning equipment having not less than [240,000] two hundred forty thousand BTUs per hour of capacity;

(21) "Commercial clothes washer" means a soft mount front-loading or soft mount top-loading clothes washer that is designed for use in (A) applications where the occupants of more than one household will be using it, such as in multifamily housing common areas and coin laundries; or (B) other commercial applications, if the clothes container compartment is no greater than [3. 5] three and one-half cubic feet for horizontal-axis clothes washers [,] or no greater than [4. 0] four cubic feet for vertical-axis clothes washers;

(22) "Energy efficiency ratio" means a measure of the relative efficiency of a heating or cooling appliance that is equal to the unit's output in BTUs per hour divided by its consumption of energy, measured in watts;

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

(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;

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

(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 that (A) is designed to be the principal heating source for the living space of a residence; (B) is not contained within the same cabinet as a central air conditioner with a rated cooling capacity of not less than sixty-five thousand 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 three hundred thousand BTUs per hour for an electric boiler and low pressure steam or hot water boiler and less than two hundred twenty-five thousand BTUs per hour for a forced-air central furnace, gravity central furnace and electric central furnace;

(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;

(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, 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;

(29) "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;

(30) "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;

(31) "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;

(32) "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 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 two hundred fifty watts;

(33) "State regulated incandescent reflector lamp" means a lamp that is not colored or designed for rough or vibration service applications, has an inner reflective coating on the outer bulb to direct the light, has an E26 medium screw base, a rated voltage or voltage range that lies at least partially within one hundred fifteen to one hundred thirty 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 two and one-quarter inches, or (B) a reflector, parabolic aluminized reflector, bulged reflector or similar bulb shape and that has a diameter of two and one-quarter to two and three-quarters 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;

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

(35) "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;

(36) "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;

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

(38) "Residential pool pump" means a pump used to circulate and filter pool water to maintain clarity and sanitation;

(39) "Walk-in refrigerator" means a space refrigerated to temperatures at or above thirty-two degrees Fahrenheit that has a total chilled storage area of less than three thousand square feet, can be walked into and is designed for the refrigerated storage of food and food products. "Walk-in refrigerator" does not include refrigerated warehouses and products designed and marketed exclusively for medical, scientific or research purposes;

(40) "Walk-in freezer" means a space refrigerated to temperatures below thirty-two degrees Fahrenheit that has a total chilled storage area of less than three thousand square feet, can be walked into and is designed for the frozen storage of food and food products. "Walk-in freezer" does not include refrigerated warehouses and products designed and marketed exclusively for medical, scientific or research purposes;

(41) "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.

(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) residential pool pumps; (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; and [(9)] (19) any other products as may be designated by the [department] office in accordance with subdivision (3) of subsection (d) of this section.

(c) The provisions of this section do not apply to (1) new products manufactured in the state and sold outside the state, (2) new products manufactured outside the state and sold at wholesale inside the state for final retail sale and installation outside the state, (3) products installed in mobile manufactured homes at the time of construction, or (4) products designed expressly for installation and use in recreational vehicles.

(d) (1) [Not later than July 1, 2005, the department] The office, in consultation with the [secretary] Department of Public Utility Control, 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;

(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] seven hundred sixty thousand 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] seven hundred sixty-one thousand 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] one hundred ninety watts and shall not be capable of operating with lamps that total more than [190] one hundred ninety 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 ninety-four thousand BTUs per hour shall have an electricity ratio of 2.3 or less;

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

(L) 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;

(M) 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;

(N) 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;

(O) 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.

(2) Such efficiency standards, where in conflict with the State Building Code, shall take precedence over the standards contained in the Building Code. Not later than July 1, 2007, and biennially thereafter, the [department] office, in consultation with the [secretary] Department of Public Utility Control, shall review and increase the level of such efficiency standards by adopting regulations in accordance with the provisions of chapter 54 upon a determination that increased efficiency standards would serve to promote energy conservation in the state and would be cost-effective for consumers who purchase and use such new products, provided no such increased efficiency standards shall become effective within one year following the adoption of any amended regulations providing for such increased efficiency standards.

(3) The [department] office, in consultation with the [secretary] Department of Public Utility Control, shall adopt regulations, in accordance with the provisions of chapter 54, to designate additional products to be subject to the provisions of this section and to establish efficiency standards for such products upon a determination that such efficiency standards (A) would serve to promote energy conservation in the state, (B) would be cost-effective for consumers who purchase and use such new products, and (C) that multiple products are available which meet such standards, provided no such efficiency standards shall become effective within one year following their adoption pursuant to this subdivision.

(e) On or after July 1, 2006, except for commercial clothes washers, for which the date shall be July 1, 2007, commercial refrigerators and freezers, for which the date shall be July 1, 2008, and large packaged air-conditioning equipment, for which the date shall be July 1, 2009, no new product of a type set forth in subsection (b) of this section or designated by the [department] office may be sold, offered for sale, or installed in the state unless the energy efficiency of the new product meets or exceeds the efficiency standards set forth in such regulations adopted pursuant to subsection (d) of this section.

(f) The [department] office, in consultation with the [secretary] Department of Public Utility Control, shall adopt procedures for testing the energy efficiency of the new products set forth in subsection (b) of this section or designated by the department if such procedures are not provided for in the State Building Code. The [department] office shall use United States Department of Energy approved test methods, or in the absence of such test methods, other appropriate nationally recognized test methods. The manufacturers of such products shall cause samples of such products to be tested in accordance with the test procedures adopted pursuant to this subsection or those specified in the State Building Code.

(g) Manufacturers of new products set forth in subsection (b) of this section or designated by the [department] office 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] office, in consultation with the [secretary] Department of Public Utility Control, shall promulgate regulations governing the certification of such products. The secretary shall publish an annual list of such products.

(h) The Attorney General may institute proceedings to enforce the provisions of this section. Any person who violates any provision of this section shall be subject to a civil penalty of not more than two hundred fifty dollars. Each violation of this section shall constitute a separate offense, and each day that such violation continues shall constitute a separate offense.

Sec. 13. Subsection (a) of section 16-245l of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) The Department of Public Utility Control shall establish and each electric distribution company shall collect a systems benefits charge to be imposed against all end use customers of each electric distribution company beginning January 1, 2000. The department shall hold a hearing that shall be conducted as a contested case in accordance with chapter 54 to establish the amount of the systems benefits charge. The department may revise the systems benefits charge or any element of said charge as the need arises. The systems benefits charge shall be used to fund (1) the expenses of the public education outreach program developed under subsections (a), (f) and (g) of section 16-244d other than expenses for department staff, (2) the reasonable and proper expenses of the education outreach consultant pursuant to subsection (d) of section 16-244d, (3) the cost of hardship protection measures under sections 16-262c and 16-262d and other hardship protections, including, but not limited to, electric service bill payment programs, funding and technical support for energy assistance, fuel bank and weatherization programs and weatherization services, (4) the payment program to offset tax losses described in section 12-94d, (5) any sums paid to a resource recovery authority pursuant to subsection (b) of section 16-243e, (6) low income conservation programs approved by the Department of Public Utility Control, (7) displaced worker protection costs, (8) unfunded storage and disposal costs for spent nuclear fuel generated before January 1, 2000, approved by the appropriate regulatory agencies, (9) postretirement safe shutdown and site protection costs that are incurred in preparation for decommissioning, (10) decommissioning fund contributions, (11) the costs of temporary electric generation facilities incurred pursuant to section 16-19ss, (12) operating expenses for the Connecticut Energy Advisory Board, (13) costs associated with the Connecticut electric efficiency partner program established pursuant to section 94 of this act, (14) reinvestments and investments in energy efficiency programs and technologies pursuant to section 101 of this act, costs associated with the electricity conservation incentive program established pursuant to section 119 of this act, and [(13)] (15) legal, appraisal and purchase costs of a conservation or land use restriction and other related costs as the department in its discretion deems appropriate, incurred by a municipality on or before January 1, 2000, to ensure the environmental, recreational and scenic preservation of any reservoir located within this state created by a pump storage hydroelectric generating facility. As used in this subsection, "displaced worker protection costs" means the reasonable costs incurred, prior to January 1, 2008, (A) by an electric supplier, exempt wholesale generator, electric company, an operator of a nuclear power generating facility in this state or a generation entity or affiliate arising from the dislocation of any employee other than an officer, provided such dislocation is a result of (i) restructuring of the electric generation market and such dislocation occurs on or after July 1, 1998, or (ii) the closing of a Title IV source or an exempt wholesale generator, as defined in 15 USC 79z-5a, on or after January 1, 2004, as a result of such source's failure to meet requirements imposed as a result of sections 22a-197 and 22a-198 and this section or those Regulations of Connecticut State Agencies adopted by the Department of Environmental Protection, as amended from time to time, in accordance with Executive Order Number 19, issued on May 17, 2000, and provided further such costs result from either the execution of agreements reached through collective bargaining for union employees or from the company's or entity's or affiliate's programs and policies for nonunion employees, and (B) by an electric distribution company or an exempt wholesale generator arising from the retraining of a former employee of an unaffiliated exempt wholesale generator, which employee was involuntarily dislocated on or after January 1, 2004, from such wholesale generator, except for cause. "Displaced worker protection costs" includes costs incurred or projected for severance, retraining, early retirement, outplacement, coverage for surviving spouse insurance benefits and related expenses. "Displaced worker protection costs" does not include those costs included in determining a tax credit pursuant to section 12-217bb.

Sec. 14. (NEW) (Effective July 1, 2007) (a) On or before October 1, 2007, the Energy Conservation Management Board, established pursuant to section 16-245m of the general statutes, as amended by this act, in consultation with the electric distribution and gas companies, shall develop and estimate the cost of a comprehensive residential conservation program, including, but not limited to, the following features: (1) An audit identifying appropriate conservation measures applicable to a utility customer's dwelling unit, whether owned or rented by the customer, prioritizing measures for cost-effectiveness and reductions in peak electricity demand; (2) a system that prioritizes customers to be assisted at least in part by the customer's consent to installation of those measures that are the most cost-effective and reduce peak electricity demand; (3) a system of oversight that advises and assists a customer in obtaining landlord authority where needed for installation of cost-effective measures and assists a customer in accessing incentives, other cost savings and financing for cost-effective measures and identifying knowledgeable contractors for installation of such measures and ensures successful installation of such measures; and (4) provides financing for conservation measures on the utility bill, to the extent such financing repayment does not exceed the expected life of the measure, and the repayment amount plus the periodic customer bill after installation of conservation measures does not exceed the anticipated periodic bill for utility service without installation of such conservation measures, and authorizes disconnection for nonpayment by the customer of any financing repayment amount and assignment of repayment obligations to subsequent owners or tenants of the dwelling unit.

(b) On or before February 1, 2008, the Energy Conservation Management Board shall provide a report to the joint standing committees of the General Assembly having cognizance of matters relating to energy and the environment regarding development and the estimated cost of a comprehensive residential conservation program as defined in subsection (a) of this section. Nothing herein shall preclude development and implementation of conservation programs with features described in subsection (a) of this section prior to provision of said report, provided such programs have been approved by the Department of Public Utility Control.

Sec. 15. Section 16-245n of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) For purposes of this section, "renewable energy" means solar photovoltaic energy, solar thermal, geothermal energy, wind, ocean thermal energy, wave or tidal energy, fuel cells, landfill gas, hydropower that meets the low-impact standards of the Low-Impact Hydropower Institute, hydrogen production and hydrogen conversion technologies, low emission advanced biomass conversion technologies, alternative fuels, used for electricity generation including ethanol, biodiesel or other fuel produced in Connecticut and derived from agricultural produce, food waste or waste vegetable oil, provided the Commissioner of Environmental Protection determines that such fuels provide net reductions in greenhouse gas emissions and fossil fuel consumption, 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.

(b) On and after July 1, 2004, the Department of Public Utility Control shall assess or cause to be assessed a charge of not less than one mill per kilowatt hour charged to each end use customer of electric services in this state which shall be deposited into the Renewable Energy Investment Fund established under subsection (c) of this section. Notwithstanding the provisions of this section, receipts from such charges shall be disbursed to the resources of the General Fund during the period from July 1, 2003, to June 30, 2005, unless the department shall, on or before October 30, 2003, issue a financing order for each affected distribution company in accordance with sections 16-245e to 16-245k, inclusive, to sustain funding of renewable energy investment programs by substituting an equivalent amount, as determined by the department in such financing order, of proceeds of rate reduction bonds for disbursement to the resources of the General Fund during the period from July 1, 2003, to June 30, 2005. The department may authorize in such financing order the issuance of rate reduction bonds that substitute for disbursement to the General Fund for receipts of both charges under this subsection and subsection (a) of section 16-245m and also may in its discretion authorize the issuance of rate reduction bonds under this subsection and subsection (a) of section 16-245m that relate to more than one electric distribution company. The department shall, in such financing order or other appropriate order, offset any increase in the competitive transition assessment necessary to pay principal, premium, if any, interest and expenses of the issuance of such rate reduction bonds by making an equivalent reduction to the charges imposed under this subsection, provided any failure to offset all or any portion of such increase in the competitive transition assessment shall not affect the need to implement the full amount of such increase as required by this subsection and sections 16-245e to 16-245k, inclusive. Such financing order shall also provide if the rate reduction bonds are not issued, any unrecovered funds expended and committed by the electric distribution companies for renewable resource investment through deposits into the Renewable Energy Investment Fund, provided such expenditures were approved by the department following August 20, 2003, and prior to the date of determination that the rate reduction bonds cannot be issued, shall be recovered by the companies from their respective competitive transition assessment or systems benefits charge except that such expenditures shall not exceed one million dollars per month. All receipts from the remaining charges imposed under this subsection, after reduction of such charges to offset the increase in the competitive transition assessment as provided in this subsection, shall be disbursed to the Renewable Energy Investment Fund commencing as of July 1, 2003. Any increase in the competitive transition assessment or decrease in the renewable energy investment component of an electric distribution company's rates resulting from the issuance of or obligations under rate reduction bonds shall be included as rate adjustments on customer bills.

(c) There is hereby created a Renewable Energy Investment Fund which shall be administered by Connecticut Innovations, Incorporated. The fund may receive any amount required by law to be deposited into the fund and may receive any federal funds as may become available to the state for renewable energy investments. Connecticut Innovations, Incorporated, may use any amount in said fund for expenditures [which] that promote investment in renewable energy sources in accordance with a comprehensive plan developed by it to foster the growth, development and commercialization of renewable energy sources, related enterprises and stimulate demand for renewable energy and deployment of renewable energy sources [which] that serve end use customers in this state and for the further purpose of supporting operational demonstration projects for advanced technologies that reduce energy use from traditional sources. Such expenditures may include, but not be limited to, grants, direct or equity investments, contracts or other actions which support research, development, manufacture, commercialization, deployment and installation of renewable energy technologies, and actions which expand the expertise of individuals, businesses and lending institutions with regard to renewable energy technologies.

(d) The chairperson of the board of directors of Connecticut Innovations, Incorporated, shall convene a Renewable Energy Investments Advisory Committee to assist Connecticut Innovations, Incorporated, in matters related to the Renewable Energy Investment Fund, including, but not limited to, development of a comprehensive plan and expenditure of funds. The advisory committee shall, in such plan, give preference to projects that maximize the reduction of federally mandated congestion charges. [The plan shall be consistent with the comprehensive energy plan approved by the Connecticut Energy Advisory Board pursuant to section 16a-7a. ] The advisory committee shall include not more than twelve individuals with knowledge and experience in matters related to the purpose and activities of said fund. The advisory committee shall consist of the following members: (1) One person with expertise regarding renewable energy resources appointed by the speaker of the House of Representatives; (2) one person representing a state or regional organization primarily concerned with environmental protection appointed by the president pro tempore of the Senate; (3) one person with experience in business or commercial investments appointed by the majority leader of the House of Representatives; (4) one person representing a state or regional organization primarily concerned with environmental protection appointed by the majority leader of the Senate; (5) one person with experience in business or commercial investments appointed by the minority leader of the House of Representatives; (6) one person with experience in business or commercial investments appointed by the minority leader of the Senate; (7) two state officials with experience in matters relating to energy policy and one person with expertise regarding renewable energy resources appointed by the Governor; and (8) three persons with experience in business or commercial investments appointed by the board of directors of Connecticut Innovations, Incorporated. The advisory committee shall issue annually a report to such chairperson reviewing the activities of the fund in detail and shall provide a copy of such report, in accordance with the provisions of section 11-4a, to the joint standing committee of the General Assembly having cognizance of matters relating to energy, the Department of Public Utility Control and the Office of Consumer Counsel. The report shall include a description of the programs and activities undertaken during the reporting period jointly or in collaboration with the Energy Conservation and Load Management Funds established pursuant to section 16-245m, as amended by this act.

(e) There shall be a joint committee of the Energy Conservation Management Board and the Renewable Energy Investments Advisory Committee, as provided in subdivision (2) of subsection (d) of section 16-245m, as amended by this act.

(f) No later than December 31, 2006, and no later than December thirty-first every five years thereafter, the advisory committee shall, after consulting with the Energy Conservation Management Board, conduct an evaluation of the performance of the programs and activities of the fund and submit a report, in accordance with the provisions of section 11-4a, of the evaluation to the joint standing committee of the General Assembly having cognizance of matters relating to energy.

Sec. 16. 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] that 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. 17. (NEW) (Effective from passage) (a) On or before July 1, 2007, the Department of Public Utility Control shall initiate a contested case proceeding, in accordance with chapter 54 of the general statutes, to determine a municipal electric utility's 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. Said share shall reflect an equitable method of cost allocation that reflects the benefits that accrue to electric distribution customers as a result of such customer-side distributed resources.

(b) Notwithstanding subsection (a) of this section, on or before January 1, 2010, municipal utilities located in southwest Connecticut shall be eligible for awards of not less than two hundred dollars per kilowatt of such resources.

(c) To qualify for awards pursuant to this section, 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. 18. 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, as amended by this act, 16-32f, 16-50i, 16-50k, as amended by this act, 16-50x, 16-243i to 16-243q, inclusive, as amended by this act, 16-244c, as amended by this act, 16-244e, as amended by this act, 16-245d, 16-245m, as amended by this act, 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 before January 1, 2007, that (1) have undergone upgrades that increase the resource's thermal efficiency operating level by no fewer than ten percentage points or, for resources that have a thermal efficiency level of at least seventy per cent, have undergone upgrades that increase the resource's turbine heat rate by no fewer than five percentage points and increase the electrical output of the resource by 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, 16-19ss, 16-32f, 16-50i, 16-50k, 16-50x, 16-243i to 16-243q, inclusive, 16-244c, 16-244e, 16-245d, 16-245m, 16-245n, 16-245z and 16-262i and section 21 of public act 05-1 of the June special session*. On or before January 1, 2009, the Department of Public Utility Control, in consultation with the Office of Consumer Counsel, shall report to the joint standing committee of the General Assembly having cognizance of matters relating to energy regarding the cost-effectiveness of programs pursuant to this section.

Sec. 19. (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 with respect to motor vehicles that are 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. 20. Subdivision (110) of section 12-412 of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2008, and applicable to sales occurring on or after said date):

(110) On and after [July 1, 2000] January 1, 2008, and prior to July 1, [2002] 2010, the sale of any passenger car that has a United States Environmental Protection Agency estimated city or highway gasoline mileage rating of at least [fifty] forty miles per gallon.

Sec. 21. (NEW) (Effective from passage) As used in this section and sections 22 to 36, 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; and

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

Sec. 22. (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 chief elected official of the municipality shall appoint the members of any such board, who shall serve for such term as the legislative body may prescribe and until their successors are appointed and have qualified. The chief elected official shall fill any vacancy 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 by mail each property owner of record within said district of said action. An owner may record on the land records in the municipality its decision to participate in the energy improvement district pursuant to sections 21 to 36, inclusive, of this act. Any owner of record, including any new owner of record, may rescind said decision at any time.

Sec. 23. (NEW) (Effective from passage) (a) An Energy Improvement District Board shall fund energy improvement district distributed resources in its district consistent with a comprehensive plan prepared for the district by said board for the development and financing of such resources, except on state or federally owned properties, with a view to increasing efficiency and reliability and the furtherance of commerce and industry in the energy improvement district, provided such district's plan shall be consistent with the state-wide procurement and deployment plan prepared and approved pursuant to section 54 of this act and the siting determinations of the Connecticut Siting Council. 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) Enter into contracts and leases, make loans and execute all instruments necessary to carry out their duties pursuant to this section, including the lending of proceeds of bonds 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 Improvement 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 22 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 22 of this act;

(10) Accept gifts, grants, loans or contributions from the United States, the state or any agency or instrumentality of either, 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 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 sections 21 to 36, 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 statutes 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. 24. (NEW) (Effective from passage) (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 26 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 their face that they shall not be a debt of the state or any political subdivision thereof, except when the board or a participating municipality, in accordance with section 33 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. The maximum maturity of any such note, including renewals thereof, shall not exceed five years from the date of original issue. 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 board shall issue the notes 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 that a bond resolution of the board may contain.

(b) An Energy Improvement District Board may issue bonds as serial bonds, as term bonds or as 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 that 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, 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 and 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 as if he had remained in office until such delivery. Notwithstanding the provisions of sections 21 to 36, inclusive, of this act, or any recitals in any bonds issued pursuant to 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, the board may issue bonds pursuant to this section, without obtaining the consent of the state or of any political subdivision thereof and without any other proceedings or conditions specifically required by sections 21 to 36, inclusive, of this act.

(f) An Energy Improvement District Board may, within available funds, 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 questions 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 or 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 21 to 36, inclusive, of this act.

Sec. 25. (NEW) (Effective from passage) An Energy Improvement District Board may secure any bonds issued pursuant to section 22 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, 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. 26. (NEW) (Effective from passage) (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, to (1) 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) pay the principal and interest of outstanding revenue bonds of the board issued in respect of such project as the same shall become due and payable, and (3) 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 21 to 36, 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. 27. (NEW) (Effective from passage) Any holder of bonds, notes, certificates or other evidences of borrowing issued pursuant to section 22 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 21 to 36, 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. 28. (NEW) (Effective from passage) An Energy Improvement District Board, in the exercise of its powers granted pursuant to sections 21 to 36, 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 pursuant to section 22 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. 29. (NEW) (Effective from passage) Bonds issued by an Energy Improvement District Board pursuant to section 22 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. 30. (NEW) (Effective from passage) 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 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 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. 31. (NEW) (Effective from passage) 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. 32. (NEW) (Effective from passage) 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. 33. (NEW) (Effective from passage) 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 22 of this act.

Sec. 34. (NEW) (Effective from passage) Any Energy Improvement District Board may pledge or assign any lease or other agreement, and any instruments making or evidencing the same to secure its bonds and thereafter may not modify such leases, agreements or instruments except as provided by the terms of such lease, agreement or instrument.

Sec. 35. (NEW) (Effective from passage) 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. 36. (NEW) (Effective from passage) 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. 37. 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. 38. 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 issue a final decision approving interconnection standards that meet or exceed national standards of interconnectivity. If the department does not issue a final decision 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, "Net Metering and Interconnection Standards for Class I Renewable Energy Systems" of the New Jersey Administrative Code.

Sec. 39. 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] 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 or 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 at a rate of one kilowatt-hour for one kilowatt-hour produced. The electric distribution company or electric supplier shall carry over the credits earned from monthly billing period to monthly billing period, and the credits shall accumulate until the end of the annualized period. At the end of each annualized period, the electric distribution company or 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, as amended by this act, 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. 40. 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 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 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 eight 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 servi