Electricity sale bill creates Conn. budget issues

Electricity suppliers bill creates Conn. budget issues; prompts interest in other revenue

Associated Press

HARTFORD, Conn. (AP) -- Democratic legislative leaders have attempted to revise a contentious proposal that would change how 800,000 electricity customers in Connecticut purchase power, aware that if the program doesn't garner enough support from lawmakers there will be an $80 million revenue hole in the state budget.

In a letter obtained Thursday by The Associated Press, the leaders informed Attorney General George Jepsen that they've added a number of consumer protections to the proposal.

The concept, first proposed by Gov. Dannel P. Malloy, involves auctioning off the right to provide electricity to customers who currently buy power under the so-called standard offer instead of choosing a supplier. Various groups oppose the concept, concerned about how consumers' rates would be affected in the future. More than 50 members of the House of Representatives signed on to a possible amendment to a budget bill that would scrap the energy auction.

While the director of Connecticut AARP said she appreciates efforts to improve the bill, her organization still opposes the auction.

"There is definitely, clearly an effort to incorporate some of our concerns, but they are not fully addressed," Nora Duncan said. "The unfortunate fact is you are mitigating harm. Things are not rosy. I find it incredibly hard to believe that AARP will ever endorse this auction."

The possibility of losing the $80 million in revenue has led to discussions of raising the cigarette tax or allowing keno gaming across the state, among other revenue-generating proposals. While a framework for a budget deal has been reached between the Democratic governor and Democratic lawmakers, a final agreement has not yet been reached. The session ends June 5.

Charles Bunnell, chief of staff for external and governmental affairs for the Mohegan Tribe, said a member of Malloy's staff contacted him this week to ask if the tribe's chairman and the tribal council were still willing to discuss the possibility of allowing keno at other locations in Connecticut besides the two casinos owned and operated by the federally recognized Mohegans and the Mashantucket Pequots.

Bunnell said the tribe first discussed the issue of keno, a game of chance based on the drawing of numbers, with Malloy when he first took office in 2010.

While the tribe maintains that keno is a casino game and both the Mohegans and Mashantuckets have the exclusive right to operate all casino games according to their compact with the state, Bunnell said the Mohegans are willing "to sit down and find a mutually agreeable solution, if that was something the state wanted to pursue." Keno is currently offered in states surrounding Connecticut.

Bunnell said the tribe would be interested in a revenue-sharing arrangement with the state. When former Republican Gov. M. Jodi Rell proposed allowing keno in bars and restaurants in 2010, the game was estimated to generate $60 million a year for the state.

The American Heart Association, meanwhile, is hoping concerns over the electricity auction proposal will lead lawmakers to reconsider a shelved proposal to increase the state's cigarette tax by 95-cents per pack. John Bailey, director of government relations in Connecticut, said he has heard from both Democratic and Republican House and Senate members in recent days that support the increase. The current state tax is $3.40 a pack.

"We just see this as a win, win, win," Bailey said, adding how the public supports the proposal, the proposal helps discourage people from smoking and a higher tax raises revenue. The advocacy group Tobacco Free Kids estimates the higher tax could generate an additional $50.68 million a year. Malloy, however, has said he opposes any new tax increases.

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