Bill Text: CT HB05362 | 2010 | General Assembly | Introduced
Bill Title: An Act Concerning Renewable Energy.
Spectrum: Moderate Partisan Bill (Democrat 17-1-1)
Status: (Introduced - Dead) 2010-02-26 - Public Hearing 03/04 [HB05362 Detail]
Download: Connecticut-2010-HB05362-Introduced.html
General Assembly |
Raised Bill No. 5362 | ||
February Session, 2010 |
LCO No. 1545 | ||
*01545_______ET_* | |||
Referred to Committee on Energy and Technology |
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Introduced by: |
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(ET) |
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AN ACT CONCERNING RENEWABLE ENERGY.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (NEW) (Effective from passage) (a) Any residential solar photovoltaic direct incentive program administered by the Renewable Energy Investment Fund shall be structured and implemented pursuant to this section and shall result in a minimum of thirty megawatts of new residential solar photovoltaic installations on or before December 31, 2021. For the purposes of this section and section 3 of this act, "residential" means dwellings with one to four units.
(b) The Renewable Energy Investments Board, through the Renewable Energy Investment Fund, shall offer direct financial incentives, in the form of performance-based incentives or expected performance-based buydowns, for the purchase or lease of qualifying residential solar photovoltaic systems. For the purposes of this section, "performance-based incentives" means incentives paid out on a per kilowatt-hour basis, and "expected performance-based buydowns" means incentives paid out as a one-time upfront incentive based on expected system performance. The Renewable Energy Investments Board shall consider willingness to pay studies and verified solar photovoltaic system characteristics, such as operational efficiency, size, location, shading and orientation, when determining the type and amount of incentive.
(c) Beginning with the comprehensive plan covering the period from July 1, 2010, to June 30, 2012, the Renewable Energy Investments Board shall develop and publish in each such plan a proposed schedule for the offering of performance-based incentives or expected performance-based buydowns over the duration of any such solar incentive program. Such schedule shall: (1) Provide for a series of solar capacity blocks the combined total of which shall be a minimum of thirty megawatts and projected incentive levels for each such block; (2) provide incentives that decline over time and will foster the sustained, orderly development of a state-based solar industry; (3) automatically adjust to the next block once the board has issued reservations for financial incentives provided pursuant to this section from the Renewable Energy Investment Fund fully committing the target solar capacity and available incentives in that block; and (4) provide comparable economic incentives for the purchase or lease of qualifying residential solar photovoltaic systems. The Renewable Energy Investments Board may retain the services of a third-party entity with expertise in the area of solar energy program design to assist in the development of the incentive schedule or schedules. The Department of Public Utility Control shall review and approve such schedule. Nothing in this subsection shall restrict the board from modifying the approved incentive schedule before the issuance of its next comprehensive plan to account for changes in federal or state law or regulation or developments in the solar market when such changes would affect the expected return on investment for a typical residential solar photovoltaic system by twenty per cent or more.
(d) The Renewable Energy Investments Board shall establish and periodically update program guidelines, including, but not limited to, requirements for systems and program participants related to: (1) Eligibility criteria, (2) standards for deployment of energy efficient equipment or building practices as a condition for receiving incentive funding, and (3) procedures to provide reasonable assurance that such reservations are made and incentives are paid out only to qualifying residential solar photovoltaic systems demonstrating a high likelihood of being installed and operated as indicated in application materials.
(e) The Renewable Energy Investment Fund shall maintain on its web site the schedule of incentives, solar capacity remaining in the current block and available funding and incentive estimators.
(f) Funding for the residential performance-based incentive program and expected performance-based buydowns shall be apportioned from the moneys collected under the surcharge specified in section 16-245n of the general statutes, as amended by this act, provided such apportionment shall not exceed one-third of the total surcharge collected annually, and supplemented by federal funding as may become available.
(g) The Renewable Energy Investments Board shall identify barriers to the development of a permanent Connecticut-based solar workforce and shall make provision for comprehensive training, accreditation and certification programs through institutions and individuals accredited and certified to national standards.
(h) On or before January 1, 2013, and every two years thereafter for the duration of the program, the Renewable Energy Investments Board shall report to the joint standing committee of the General Assembly having cognizance of matters relating to energy on progress toward the goals identified in subsection (a) of this section.
Sec. 2. Section 16-245n of the general statutes is amended by adding subsection (i) as follows (Effective from passage):
(NEW) (i) The Renewable Energy Investments Board, through the Renewable Energy Investment Fund, shall establish funding for performance-based incentives to qualifying residential solar energy systems pursuant to section 1 of this act by: (1) Including in its comprehensive plan for the period July 1, 2010, to June 30, 2012, inclusive, an estimate of the total funding needed to support the performance-based incentives to qualifying residential solar energy systems in its entirety and allocating up to one-third for such purpose, (2) including in its comprehensive plan for the period July 1, 2012, to June 30, 2014, inclusive, an estimate of remaining funding needed to support the outstanding capacity blocks for performance-based incentives to qualifying residential solar energy systems and allocating up to one-half of all such funding, (3) carrying forward any funding allocated to support performance-based incentives pursuant to subdivision (1) or (2) of this subsection disbursed during the two-year period covered by the comprehensive plan for the same purpose until all capacity blocks have been filled, (4) allocating the balance of the funding as necessary, and (5) monitoring the status of available funds and expected demand and including such assessment in its annual report to the Department of Public Utility Control pursuant to subsection (f) of section 1 of this act.
Sec. 3. (NEW) (Effective from passage) (a) Commencing on January 1, 2011, and within the period established in subsection (a) of section 4 of this act, each electric distribution company shall solicit and file with the Department of Public Utility Control for its approval, one or more long-term power purchase contracts with owners or developers of customer-sited, nonresidential solar photovoltaic generation projects located in this state that are less than two thousand kilowatts in size, located on the customer side of the revenue meter and connected to the distribution system of the electric distribution company. For purposes of this subsection, "nonresidential" shall include all utility retail rate classes with the exception of residential, as defined in subsection (a) of section 1 of this act.
(b) Solicitations conducted by the electric distribution company shall be for the purchase of solar renewable energy credits produced by eligible nonresidential, customer-sited solar photovoltaic generating projects over the duration of the long-term contract. For purposes of this section, a long-term contract is a contract for a minimum of fifteen years. The electric distribution company may solicit proposals for a combination of renewable energy and associated solar renewable energy credits.
(c) The aggregate procurement of solar renewable energy credits by electric distribution companies pursuant to this section shall be no less than four million three hundred fifty thousand. The production of a megawatt hour of electricity from a nonresidential Class I solar renewable energy source first placed in service on or after the effective date of this section shall create one solar renewable energy credit. The obligation to purchase solar renewable energy credits shall be apportioned to electric distribution companies based on their respective distribution system loads at the commencement of the procurement period, as determined by the department.
(d) Notwithstanding subdivision (1) of subsection (j) of section 16-244c of the general statutes, an electric distribution company may retire the solar renewable energy credits it procures through long-term contracting to satisfy its obligation pursuant to section 16-245a of the general statutes.
(e) Nothing in this section shall preclude the resale or other disposition of energy or associated solar renewable energy credits purchased by the electric distribution company, provided the distribution company shall net the cost of payments made to projects under the long-term contracts against the proceeds of the sale of energy or solar renewable energy credits and the difference shall be credited or charged to distribution customers through a reconciling component of electric rates as determined by the department.
Sec. 4. (NEW) (Effective from passage) (a) Each electric distribution company shall, not later than one hundred eighty days after the effective date of this section, propose a ten-year solar solicitation plan that shall include a timetable and methodology for soliciting proposals for long-term solar renewable energy credits or energy contracts from in-state generators. The electric distribution company's solar solicitation plan shall be subject to the review and approval of the Department of Public Utility Control, provided contracts comprising no less than twenty-five per cent of the electric distribution company's obligation shall be submitted for department approval on or before January 1, 2012, no less than fifty per cent of such obligation shall be submitted for such approval on or before July 1, 2014, and no less than seventy-five per cent of such obligation shall be submitted for such approval on or before July 1, 2016.
(b) The electric distribution company's approved solar solicitation plan shall be designed to foster a diversity of solar project sizes and participation among all eligible customer classes subject to cost-effectiveness considerations. Separate procurement processes shall be conducted for (1) nonresidential systems between ten kilowatts and fifty kilowatts, and (2) nonresidential systems greater than fifty kilowatts but less than two thousand kilowatts. The department shall give preference to competitive bidding for resources of more than fifty kilowatts, unless the department determines that an alternative methodology is in the best interests of the electric distribution company's customers and the development of a competitive and self-sustaining solar market. Systems up to fifty kilowatts in size shall be eligible to receive a solar renewable energy credit price equivalent to the highest accepted bid price in the most recent solicitation for systems greater than fifty kilowatts but less than two thousand kilowatts, plus an additional incentive of ten per cent.
(c) Each electric distribution company shall execute its approved ten-year solicitation plan and submit for department review and approval its preferred solar procurement plan comprised of any proposed contract or contracts with independent solar developers.
(d) The department shall hold a hearing that shall be conducted as an uncontested case, in accordance with the provisions of chapter 54 of the general statutes, to approve, reject or modify an application for approval of the electric distribution company's solar procurement plan. The department shall only approve such proposed plan if the department finds that (1) the solicitation and evaluation conducted by the electric distribution company was the result of a fair, open, competitive and transparent process; (2) approval of the solar procurement plan would result in the greatest expected ratepayer value from solar energy or solar renewable energy credits at the lowest reasonable cost; and (3) such procurement plan satisfies other criteria established in the approved solicitation plan. The department shall not approve any proposal made under such plan unless it determines that the plan and proposals encompass all foreseeable sources of revenue or benefits and that such proposals, together with such revenue or benefits, would result in the greatest expected ratepayer value from solar energy or solar renewable energy credits. The department may, in its discretion, retain the services of an independent consultant with expertise in the area of energy procurement. The independent consultant shall be unaffiliated with the electric distribution company or its affiliates and shall not, directly or indirectly, have benefited from employment or contracts with the electric distribution company or its affiliates in the preceding five years, except as an independent consultant. For purposes of such audit, the electric distribution company shall provide the independent consultant immediate and continuing access to all documents and data reviewed, used or produced by the electric distribution company in its bid solicitation and evaluation process. The electric distribution company shall make all its personnel, agents and contractors used in the bid solicitation and evaluation available for interview by the consultant. The electric distribution company shall conduct any additional modeling requested by the independent auditor to test the assumptions and results of the bid evaluation process. The independent consultant shall not participate in or advise the electric distribution company with respect to any decisions in the bid solicitation or bid evaluation process. The department's administrative costs in reviewing the electric distribution company's solar procurement plan and the costs of the consultant shall be recovered through a reconciling component of electric rates as determined by the department.
(e) The electric distribution company shall be entitled to recover its reasonable costs of complying with its approved solar procurement plan through a reconciling component of electric rates as determined by the department.
(f) If, by January 1, 2012, the department has not received proposed long-term solar renewable energy credit contracts consisting of at least twenty-five per cent of each electric distribution company's procurement obligation or by July 1, 2014, has not received proposed long-term solar renewable energy contracts consisting of at least fifty per cent of each electric distribution company's procurement obligation, or by July 1, 2016, has not proposed long-term solar renewable energy contracts consisting of at least seventy-five per cent of each electric distribution company's procurement obligation, respectively, the department shall notify the electric distribution company and the Renewable Energy Investments Board of the shortfall. Unless, upon petition by the electric distribution company, the department grants the distribution company an extension not to exceed ninety days to correct this deficiency, the Renewable Energy Investments Board shall issue one or more requests for proposals to address the shortfall. The board shall perform an initial review of each proposal, examine the financial and technical viability of each proposal and analyze project costs and benefits for the purpose of selecting projects that will promote the provision of long-term solar renewable energy contracts. Upon selection of the projects, the board shall forward such projects to each electric distribution company for review. For each project, each electric distribution company shall analyze the interconnection point and costs related thereto, reliability and other impacts of such project to determine whether the project will promote the provision of additional long-term solar renewable energy contracts. Each electric distribution company shall provide the results of its analysis to the department, which shall conduct a proceeding to determine whether to approve or reject each project. The reasonable administrative costs associated with the procurement of long-term solar renewable energy contracts shall be collected by the distribution company, maintained in a separate interest-bearing account and disbursed to the Renewable Energy Investment Fund on a quarterly basis.
(g) Not later than sixty days after its approval of the distribution company procurement plans submitted on or before January 1, 2012, the department shall submit a report to the joint standing committee of the General Assembly having cognizance of matters relating to energy. The report shall document for each distribution company procurement plan: (1) The total number of solar renewable energy credits bid relative to the number of solar renewable energy credits requested by the distribution company; (2) the total number of bidders in each market segment; (3) the number of contracts awarded; and (4) the total weighted average price of the solar renewable energy credits or energy so purchased. The department shall not report individual bid information or other proprietary information.
Sec. 5. (NEW) (Effective from passage) (a) On or before July 1, 2011, the Renewable Energy Investment Fund, in consultation with the Office of Policy and Management and the Department of Public Works, shall, within available funding, complete, or cause to be completed by private vendors, a comprehensive solar feasibility survey of facilities owned or operated by the state with a load of fifty kilowatts or more. The survey shall rank state-owned or operated facilities based on their technical feasibility to accommodate solar photovoltaic generating systems by considering such factors as: (1) On-site energy consumption; (2) building orientation; (3) roof age and condition; (4) shading and the potential for obstruction to sunlight over the life of the solar system; (5) structural load capacity; (6) availability of ancillary facilities, such as parking lots, walkways or maintenance areas; (7) nonenergy related amenities; and (8) other factors that the Renewable Energy Investment Fund deems may bear on the technical feasibility of such solar deployment.
(b) The Office of Policy and Management, in consultation with the Renewable Energy Investment Fund, shall, within available funding, issue one or more requests for proposals for the deployment of solar photovoltaic generating systems at state-owned or operated facilities. Any such request for proposals shall be structured to maximize the state's ability to secure incentives available from the federal government or other sources. The Office of Policy and Management may seek in any request for proposals the services of an entity to finance, design, construct, own or maintain such solar photovoltaic system under a long-term solar services agreement. Any such entity chosen to provide such services shall not be considered a public service company under section 16-1 of the general statutes.
Sec. 6. (NEW) (Effective from passage) (a) Each electric distribution company shall, not later than July 1, 2011, file with the Department of Public Utility Control for its approval a tariff for production-based payments to owners or operators of Class I solar renewable energy source projects located in this state that are not less than one megawatt and connected directly to the distribution system of an electric distribution company.
(b) Such tariffs shall provide production-based payments for a period not less than fifteen years from the in-service date of the Class I solar renewable energy source project at a price that is, at the determination of the Department of Public Utility Control, a cost-based payment consisting of the fully allocated cost of constructing and operating a Class I solar renewable energy source of from one megawatt to seven and one-half megawatts were such construction and operation to be undertaken or procured by the electric distribution company itself. In calculating the cost-based tariff, the department shall consider actual cost data for Class I solar energy sources constructed and operated by the electric distribution company pursuant to subsection (e) of this section taking into consideration all available state and federal incentives.
(c) Such tariffs shall include a per project eligibility cap of seven and one-half megawatts and an aggregate eligibility cap of fifty megawatts, apportioned among each electric distribution company in proportion to distribution load.
(d) The cost of such tariff payments shall be eligible for inclusion in any subsequent rates, provided such payments are for projects operational on or after the effective date of this section, and recovered through a reconciling component of electric rates as determined by the department.
(e) On and after July 1, 2011, electric distribution companies may construct, own and operate solar electric generating facilities up to one-third of their proportional share of the total cap amounts specified under subsection (c) of this section, provided any such development shall be phased in over a period of no less than three years. Such projects shall be located on company-owned properties, brownfields or other locations identified by the Department of Public Utility Control for strategic placement of distributed generation. The department, in a contested case, shall authorize the electric distribution company to recover in rates its costs to construct, own and operate solar electric generating facilities, including a reasonable return on its investment, if such approval would result in a reasonable cost of meeting the solar energy requirements pursuant to said subsection (c) of this section and that such investment will not restrict competition or restrict growth in the state's solar energy industry or unfairly employ in a manner which would restrict competition in the market for solar energy systems any financial, marketing, distributing or generating advantage that the electric distribution company may exercise as a result of its authority to operate as a public service company.
(f) Notwithstanding subdivision (1) of subsection (j) of section 16-244c of the general statutes, the amount of renewable energy produced from Class I renewable energy sources receiving tariff payments or included in utility rates under this section shall be applied to reduce the electric distribution company's Class I renewable energy source portfolio standard.
(g) On or before September 1, 2012, the Department of Public Utility Control, in consultation with the Office of Consumer Counsel and the Renewable Energy Investments Board, shall study the operation of solar renewable energy tariffs and shall report, in accordance with the provisions of section 11-4a of the general statutes, its findings and recommendations to the joint standing committee of the General Assembly having cognizance of matters relating to energy.
(h) The department shall suspend the tariff established pursuant to this section upon the earlier of (1) an electric distribution company reaching its aggregate cap pursuant to subsection (c) of this section, or (2) three years from the effective date of the tariff.
Sec. 7. (NEW) (Effective from passage) The Renewable Energy Investment Fund and the Conservation and Load Management Fund shall develop coordinated programs to create a self-sustaining market for solar thermal systems for electricity, natural gas and fuel oil customers.
Sec. 8. (NEW) (Effective from passage) The Renewable Energy Investment Fund, shall provide an additional incentive of up to five per cent of the then-applicable incentive provided pursuant to sections 1 and 7 of this act for the use of major system components manufactured or assembled in Connecticut, and another additional incentive of up to five per cent of the then applicable incentive provided pursuant to sections 1 and 7 of this act for the use of major system components manufactured or assembled in a distressed municipality, as defined in section 32-9p of the general statutes, or a targeted investment community, as defined in section 32-222 of the general statutes.
Sec. 9. (NEW) (Effective from passage) (a) For the two-year period starting January 1, 2011, and ending June 30, 2013, the aggregate net annual cost recovered for electric ratepayers pursuant to section 1 and sections 3 to 8, inclusive, of this act and subsection (i) of section 16-245n of the general statutes, as amended by this act, shall not exceed one-half of one per cent of total retail electricity sales revenues of each electric distribution company. For the two-year period starting July 1, 2013, and ending June 30, 2015, the aggregate net annual cost recovered for electric ratepayers pursuant to section 1 and sections 3 to 8, inclusive, of this act and subsection (i) of section 16-245n of the general statutes, as amended by this act, shall not exceed three-fourths of one per cent of total retail electricity sales revenues of each electric distribution company. For each twelve-month period starting July 1, 2015, and every July first thereafter for the duration of the solar programs established pursuant to section 1 and sections 3 to 8, inclusive, of this act and subsection (i) of section 16-245n of the general statutes, as amended by this act, the aggregate net cost of such programs recovered for electric ratepayers shall not exceed one per cent of total retail electricity sales revenues of each electric distribution company.
(b) The Department of Public Utility Control shall net out the incentives paid by the Renewable Energy Investment Fund pursuant to section 16-245n of the general statutes, as amended by this act, for solar deployment programs against the aggregate annual costs identified in this section.
(c) If the department projects that the annual cost cap will be exceeded, the department may take the following cost mitigation measures: (1) Delay or modify the development of solar electric generating facilities by electric distribution companies pursuant to subsection (e) of section 6 of this act; (2) temporarily suspend the availability of production-based incentives to customers not already eligible to receive such incentives under section 6 of this act; and (3) extend the scheduled electric distribution company solar renewable energy credit procurement plans under section 4 of this act. If the department determines that cost mitigation measures are required, it shall reduce proportionally the annual funding for the programs identified in subdivisions (1) to (3), inclusive, of this subsection and only to the extent required to bring projected annual costs below the cost cap.
(d) On or before January 1, 2014, the department shall report to the joint standing committee of the General Assembly having cognizance of matters relating to energy on the cost and charges involved in the implementation of this program, including a cost-benefit analysis.
Sec. 10. Subdivision (2) of subsection (j) of section 16-244c of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(2) Notwithstanding the provisions of subsection (d) of this section regarding an alternative transitional standard offer option or an alternative standard service option, an electric distribution company providing transitional standard offer service, standard service, supplier of last resort service or back-up electric generation service in accordance with this section shall, not later than July 1, 2008, file with the Department of Public Utility Control for its approval one or more long-term power purchase contracts from Class I renewable energy source projects that receive funding from the Renewable Energy Investment Fund and that are not less than one megawatt in size, at a price that is either, at the determination of the project owner, (A) not more than the total of the comparable wholesale market price for generation plus five and one-half cents per kilowatt hour, or (B) fifty per cent of the wholesale market electricity cost at the point at which transmission lines intersect with each other or interface with the distribution system, plus the project cost of fuel indexed to natural gas futures contracts on the New York Mercantile Exchange at the natural gas pipeline interchange located in Vermillion Parish, Louisiana that serves as the delivery point for such futures contracts, plus the fuel delivery charge for transporting fuel to the project, plus five and one-half cents per kilowatt hour. In its approval of such contracts, the department shall give preference to purchase contracts from those projects that would provide a financial benefit to ratepayers or would enhance the reliability of the electric transmission system of the state. Such projects shall be located in this state. The owner of a fuel cell project principally manufactured in this state shall be allocated all available air emissions credits and tax credits attributable to the project and no less than fifty per cent of the energy credits in the Class I renewable energy credits program established in section 16-245a attributable to the project. On [and after October 1, 2007, and until September 30, 2008, such contracts shall be comprised of not less than a total, apportioned among each electric distribution company, of one hundred twenty-five megawatts; and on] and after October 1, [2008] 2011, such contracts shall be comprised of not less than a total, apportioned among each electrical distribution company, of one hundred fifty megawatts, plus not less than an additional forty-five megawatts to address project attrition after contract execution with the intent that no more than one hundred fifty megawatts reach commercial operation pursuant to this section. The cost of such contracts and the administrative costs for the procurement of such contracts directly incurred shall be eligible for inclusion in the adjustment to the transitional standard offer as provided in this section and any subsequent rates for standard service, provided such contracts are for a period of time sufficient to provide financing for such projects, but not less than ten years, and are for projects which began operation on or after July 1, 2003. Except as provided in this subdivision, the amount from Class I renewable energy sources contracted under such contracts shall be applied to reduce the applicable Class I renewable energy source portfolio standards. For purposes of this subdivision, the department's determination of the comparable wholesale market price for generation shall be based upon a reasonable estimate. On or before September 1, [2007] 2011, the department, in consultation with the Office of Consumer Counsel and the Renewable Energy Investments [Advisory Council] Board, shall study the operation of such renewable energy contracts and report its findings and recommendations to the joint standing committee of the General Assembly having cognizance of matters relating to energy.
This act shall take effect as follows and shall amend the following sections: | ||
Section 1 |
from passage |
New section |
Sec. 2 |
from passage |
16-245n |
Sec. 3 |
from passage |
New section |
Sec. 4 |
from passage |
New section |
Sec. 5 |
from passage |
New section |
Sec. 6 |
from passage |
New section |
Sec. 7 |
from passage |
New section |
Sec. 8 |
from passage |
New section |
Sec. 9 |
from passage |
New section |
Sec. 10 |
from passage |
16-244c(j)(2) |
Statement of Purpose:
To promote the use of renewable energy.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]