General Assembly |
File No. 191 |
January Session, 2007 |
Senate, March 29, 2007
The Committee on Energy and Technology reported through SEN. FONFARA, J. of the 1st Dist., Chairperson of the Committee on the part of the Senate, that the substitute bill ought to pass.
AN ACT CONCERNING ELECTRIC RATE RELIEF.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (NEW) (Effective July 1, 2007) (a) As used in this section:
(1) "Qualifying transmission property" means new or modified high voltage facilities deemed to be part of the administered transmission system pursuant to the open access transmission tariff of the regional independent system operator, constructed or modified on or after January 1, 2007, or any additional transmission facilities that have costs allocated to electric consumers in the state pursuant to a local service tariff provided for under the open access transmission tariff of the regional independent system operator and located in the state.
(2) "High voltage facilities" means electric transmission facilities rated 345 kilovolt or higher.
(3) "Joint ownership interest" means an undivided fraction of ownership in fee in qualifying transmission property by a participating transferee utility, where said fraction is equal to the coincident maximum hourly electric load of customers receiving electric distribution service from the participating transferee utility divided by the maximum hourly load of aggregate electric consumption within the state during a calendar year. For purposes of this section, the electric load of each municipal electric utility with authority to serve electricity at retail within the state, which is a member or participant of a municipal electric energy cooperative created pursuant to chapter 101a of the general statutes acquiring such a joint ownership interest, shall be accounted for as part of the electric load of said cooperative and the electric load of the cooperative, as so calculated, shall be deemed to be the electric load of customers receiving electric distribution service.
(4) "Participating transferee utility" means each electric distribution company with the authority to serve electricity at retail within the state, each municipal electric utility with the authority to serve electricity at retail within the state, and a municipal electric energy cooperative created pursuant to chapter 101a of the general statutes and each such entity not otherwise qualifying as a transferor utility with respect to particular qualifying transmission property pursuant to this section.
(5) "Transferor utility" means an electric distribution company or its affiliate that is constructing and owns the qualifying transmission property on or before the date of transfer in accordance with the plan approved by the Department of Public Utility Control pursuant to sub-section (c) of this section.
(6) "Transmission facilities transfer proceeds" means the amount paid to the transferor utility by the participating transferee utility for the purchase of its joint ownership interest in qualifying transmission property.
(b) Any transferor utility may elect to transfer qualifying transmission property pursuant to the provisions of this section and, if it so elects, may transfer up to the amount of the transmission facilities transfer proceeds received by the transferor utility to enhanced demand side management initiatives, in accordance with section 9 of this act, in partnership with Connecticut electric efficiency partners for investment in electric efficiency or conservation and load management measures within its service area as recommended by the board and approved by the Department of Public Utility Control in accordance with section 16-245m of the general statutes, as amended by this act. The department shall recognize the amount of the transmission facilities transfer proceeds as a regulatory asset of the transferor utility. The department shall conduct a contested case proceeding for approval pursuant to chapter 54 of the general statutes and issue a final order on or before November 1, 2007, establishing the specific parameters for the creation and recovery of the regulatory asset created pursuant to this subsection, including, but not limited to, return on equity and depreciation life for the investments contemplated in this subsection. Notwithstanding any other provisions of this subsection, the return on equity component allowed in the retail rates of the transferor utility for the capital contribution associated with the transmission facilities transfer proceeds shall be not less than the allowed return on equity that the transferor utility would receive on its investment in the transferred qualifying transmission property absent such transfer and the transferor utility shall receive rate base treatment for recovery of the costs of such investment over a period not longer than the depreciation of the asset as determined by the department.
(c) (1) Each transferor utility shall submit a plan to the department on or before September 30, 2007, for the transfer of joint ownership interests in all qualifying transmission property that has entered or is anticipated to enter into commercial operation or whose costs, in whole or in part, are being or are anticipated to be recovered in the transferor utility's rates on or before January 1, 2009, to each of the participating transferee utilities for a price equal to the net book value of the investment by the transferor utility in the qualifying transmission property, as it appears in the accounts of such transferor utility, as of the date of the transfer. Said plan shall include any documentation the department determines is reasonably necessary to approve such sale and establishes that the terms of such sale will not have an adverse effect on customers of such electric distribution company. The department shall hold a hearing and issue a final order approving or modifying the plan in a time frame that will allow the transfer of the joint ownership interests to be accomplished on or before April 1, 2009.
(2) For a qualifying transmission property that does not meet the requirements of subdivision (1) of this subsection, each transferor utility on or before ninety days before the commencement of construction or, if already under construction, before the commencement of commercial operation of such qualifying transmission property shall submit a plan to the department for the participation through a joint ownership interest of each of the participating transferee utilities in said qualifying transmission property. Said plan shall provide for the transfer of the joint ownership interest to each of the participating transferee utilities at price equal to the net book investment by the transferor utility in the qualifying transmission property and shall include any documentation the department determines is reasonably necessary to approve such sale and establishes that the terms of such sale will not have an adverse effect on customers of such electric distribution company. The department shall hold a hearing and issue a final order approving or modifying the plan in a time frame that will allow the transfer of the joint ownership interests on or before the commencement of recovery in rates of any costs associated with said qualifying transmission property.
(d) No sooner than thirty days and no later than one hundred twenty days following the issuance of a final order of the department approving any plan submitted by the transferor utility pursuant to subsection (c) of this section, each of the participating transferee utilities shall tender the transmission facilities transfer proceeds to the transferor utility equivalent to its joint ownership interest in the qualifying transmission facilities described in said plan as approved by the department, and, thereafter, simultaneous with the receipt of such proceeds the transferor utility shall transfer the joint ownership interest to such participating transferee utility. If the participating transferee utility fails to tender the transmission facilities transfer proceeds during this period, the transferor utility's obligation to transfer an interest in the qualifying transmission facilities described in the plan as approved by the department and the participating transferee utility's obligation to purchase such interest shall permanently lapse.
(e) Notwithstanding the transfers of ownership in qualifying transmission facilities affected by this section, the transferor utility or the regional independent system operator, as applicable, shall retain control over and operational responsibility for the qualifying transmission facilities.
(f) The findings and approvals of the department under this section shall be in lieu of the findings and approvals required for the transfer of property pursuant to section 16-43 of the general statutes.
Sec. 2. (NEW) (Effective from passage) (a) The Energy Conservation Management Board, established pursuant to section 16-245m of the general statutes, as amended by this act, shall investigate and develop a comprehensive plan, to be known as the Connecticut energy excellence plan, which shall include, but not be limited to: (1) Describing in detail any existing Connecticut higher educational energy efficiency resources, (2) quantifying the strategic role that energy efficiency programs can play in facilitating a transition to a more efficient and competitive business climate, (3) identifying measures that can be employed and investments in research that can be made to position the state as a national leader in energy efficiency, and (4) detailing the manner in which energy efficiency efforts can be expanded to reduce the state's peak electric demand by not less than ten per cent by 2010.
(b) On or before July 1, 2007, each electric distribution company shall submit a plan to the Department of Public Utility Control to deploy an advance metering infrastructure. Said metering infrastructure shall support net metering and be capable of tracking hourly consumption to support proactive customer pricing signals through innovative rate design, such as time-of-day or real-time pricing of electric service for all customer classes. The metering infrastructure shall have the ability to capture interval data in a minimum interval of fifteen minutes for both peak kilowatt demand and kilowatt-hour consumption and allow that such data be accessible by the customer or its designated competitive electric supplier via an Ethernet or equivalent connection at or near the meter location.
(c) The plan to implement advanced metering developed pursuant to subsection (b) of this section shall allow for the deployment of a network to support the metering of seventy-five per cent of all customers on or before January 1, 2008. The deployment of the network to support the metering of the remaining twenty-five per cent of the customers of each electric distribution company shall be completed not later than January 1, 2009.
(d) The plan shall provide for the installation of an advanced meter for any customer that chooses a competitive electric supplier or a customer that requests the installation of such meter not later than sixty days after switching to the competitive supplier making said request. For all other customers, the plan shall support the installation of meters to comply with the directives contained in the department's decisions concerning rate design in Docket No. 05-10-03 and the supplemental decision in Docket No. 05-06-04.
(e) The cost of the advanced metering infrastructure, including, but not limited to, the meters, the network to support the meters, and administrative, installation, operation and maintenance costs, shall be borne by the electric distribution company and shall be recoverable in rates. The unrecovered cost of the current metering system shall continue to be reflected in rates.
(f) On or before January 1, 2008, the department shall issue a final decision in an uncontested proceeding to approve a plan for deployment of the metering system.
(g) The department shall allocate fifty per cent of any funds received by the Energy Conservation and Load Management Funds pursuant to section 24 of this act to defray the cost of the installation of an advanced metering system for each electric distribution company.
Sec. 3. (NEW) (Effective July 1, 2007) Competitive electric suppliers and aggregators shall provide time-of-use pricing options to all customer classes. These pricing options may include, but not be limited to, hourly or real-time pricing options. These pricing options shall be in place no later than six months from the effective date of this section.
Sec. 4. Section 16-244c of the general statutes is amended by adding subsections (k) to (q) as follows (Effective January 1, 2008):
(NEW) (k) (1) As used in this section:
(A) "Program" means the retail choice and referral program described in this subsection.
(B) "Participating electric supplier" means an electric supplier that has been authorized after appropriate review by the department to make an offer to provide electric service, pursuant to this subsection, to residential customers.
(C) "Residential customer" means a customer who is eligible for standard service and who takes electric distribution-related service from an electric distribution company pursuant to a residential tariff.
(D) "Small commercial customer" means a customer who is eligible for standard service and who takes electric distribution-related service from an electric distribution company pursuant to a small commercial tariff.
(2) Each month, participating electric suppliers shall be allowed to list introductory offers to provide electric generation service to residential and small commercial customers with each customer's utility bill. The department shall determine the manner in which introductory offers shall be made.
(A) Such introductory offers shall include the price comparable to the generation-related service charge under the then-applicable standard service rate for a fixed number of months. Every participating supplier shall offer at least one service that bases price on the time of consumption. The department shall allow the listing of introductory offers with fixed prices or offers based on service characteristics other than price, including, but not limited to, the environmental characteristics of the generation service and the inclusion of energy efficiency, conservation or demand response services with the offer.
(B) Participating electric suppliers shall provide residential and small commercial customers a means of choosing one of the introductory offers. The department shall determine said means, which shall be designed to maximize the ease to the customer of exercising such choice and minimize any delay in implementing such choice. The means of exercising said choice of an introductory offer shall include at least the following: (i) An expression of affirmative choice appearing on the return portion of the utility bill; (ii) a toll-free telephone number; and (iii) a web site operated by or at the direction of the department. The department shall establish comparable enrollment procedures for customers paying their bill electronically or through third-party bill processors wherever practicable.
(C) Upon the expiration of the introductory offer, and after at least thirty days written notice, participating residential and small commercial customers may (i) switch to a different supplier, upon terms proposed by the supplier; or (ii) return to standard service at the then-applicable rate. If neither of these options is chosen, the customer shall remain with the supplier of record subject to the terms then in effect.
(3) At the direction of the department, electric distribution companies shall offer to customers initiating new service, or reinitiating service following a change of residence or business location, a choice of then-available introductory offers from participating electric suppliers to provide electric generation service as an alternative to being placed on standard service. Customers expressing a preference for a specific electric supplier or for standard service shall be enrolled with that supplier or continued on standard service. Customers not expressing a preference for a specific electric supplier shall be enrolled with an electric supplier selected randomly on a rotating basis. Upon the expiration of the introductory offer, a participating residential customer may (A) switch to a different supplier, upon terms proposed by the supplier; or (B) return to standard service at the then-applicable rate. If neither of these options is chosen, the customer shall remain with the supplier of record subject to the terms then in effect.
(4) In the manner determined by the department, residential or small commercial standard service customers making an inbound call to an electric distribution company for any purpose related to the customers' electric service shall be offered the option to learn about their ability to enroll with a participating electric supplier and shall be informed that they have the option to receive immediate savings compared to the standard service rate by participating in the referral program. Customers choosing to participate shall be transferred to a customer service representative for the program and informed of the then-available introductory offers by participating electric suppliers. Customers expressing a preference for a specific electric supplier shall be enrolled with that supplier. Upon the expiration of the introductory offer, a participating residential or small commercial customer may (A) switch to a different supplier, upon terms proposed by the supplier; or (B) return to standard service at the then-applicable rate. If neither of these options is chosen, the customer shall remain with the supplier of record subject to the terms then in effect.
(5) The department shall make available to residential and small commercial customers the ability to participate voluntarily as members of a customer choice buying pool.
(A) Said buying pool shall be created from customers electing to participate in the pool in one of the following ways: (i) The marking of a check box or similar device included with the customer's utility bill; (ii) calling a toll-free number; (iii) through a web site operated by or at the direction of the department; or (iv) by responding to a nonutility mailing approved by the department. The department shall promote the existence and purpose of, and the means of joining, the buying pool, through advertising and marketing as the department deems appropriate. Enrollment in the initial buying pool shall continue for a period of time determined by the department but shall in no event exceed ninety days from the initial announcement of the buying pool.
(B) Upon the closure of the enrollment period for the buying pool, the department shall solicit bids from participating electric suppliers to provide retail electric service to the customers in the buying pool. The means of soliciting and receiving such bids shall be determined by the department. The department shall conduct an uncontested proceeding and may choose one or more winning bidders based on price as compared to the generation-related service charges under the then-available standard offer price, financial and managerial strength of the bidders and the ability of the bidders to adhere to the current retail choice rules. If the department finds none of the bids to be acceptable, the department shall seek new bids at a time of its choosing, not to exceed one hundred twenty days from the date upon which it rejected the previous bids. Customers who provide their consent to participate in the buying pool shall remain in the buying pool until the department chooses successful bidders to provide electric service to the pool, provided if the department has not chosen successful bidders one year from the initial solicitation of bids to provide electric service to the buying pool, the buying pool shall be dissolved.
(C) Retail electric service shall be provided to the members of the buying pool for a term of one year. Each pool customer shall be enrolled by the winning supplier or suppliers with account numbers supplied by the utility to such supplier or suppliers. During the one-year term, members of the buying pool may switch to a different retail supplier or switch to a different electric service offered by the supplier to the buying pool without penalty to the customer or to the new supplier. Upon the expiration of the term, a member of the buying pool may (i) switch to a different supplier, upon terms proposed by the supplier; or (ii) return to standard service at the then-applicable rate. If neither of these options is chosen, the member of the buying pool shall remain with the supplier of record subject to the terms then in effect.
(D) Following selection of one or more winning bidders for the initial buying pool, the department may, at its discretion, form a subsequent buying pool by the means described above, provided, however, in no event shall solicitation of residential and small commercial customers for a new buying pool commence fewer than thirty days following the selection of winning bidders for the initial buying pool. To the extent practicable, customers receiving service from a competitive retail supplier, whether through a buying pool or otherwise, shall not be solicited for participation in a new buying pool. Only residential and small commercial customers enrolled in and receiving standard service may participate in a buying pool.
(NEW) (l) The department shall ensure that any and all prudently incurred costs for the implementation and operation of the programs described in subsection (k) of this section are recovered in the rates of electric distribution companies.
(NEW) (m) The department shall implement performance-based financial incentives which may be earned by electric distribution companies in connection with their implementation and operation of the programs described in subsection (k) of this section.
(NEW) (n) An electric distribution company may apply to the department for approval of rates to provide enhanced billing and other value-added services to participating electric suppliers, provided the rates for any such services may not exceed the incremental cost to the electric distribution company of providing such services. Notwithstanding the foregoing, the department may identify and implement performance-based financial incentives that may be earned by electric distribution companies in connection with their implementation and operation of such enhanced billing and other value-added services to participating electric suppliers.
(NEW) (o) Each electric distribution company shall implement a purchase of receivables program for participating electric suppliers with full and timely cost recovery for the electric distribution company under terms and conditions approved by the department.
(NEW) (p) Notwithstanding section 16-245p and upon request by a participating electric supplier, each electric distribution company shall provide to such requesting retail supplier the following customer information, provided no electric company shall provide such information relating to a customer who withholds or withdraws consent to do so: (1) Account name; (2) billing address; (3) service address; (4) utility account number; (5) utility rate class; (6) monthly historic consumption for the previous twelve months; and (7) any other information that the department deems necessary for participating electric suppliers.
(NEW) (q) Any customer that receives electric generation service from a participating electric supplier can return to standard service or supplier of last resort service at any time. Any customer that is receiving electric generation service from an electric distribution company pursuant to either standard service or supplier of last resort service can switch to an electric supplier at any time without the imposition of any additional charges.
Sec. 5. Section 16-245m of the general statutes is amended by adding subsection (h) as follows (Effective January 1, 2008):
(NEW) (h) The department, in consultation with the Energy Conservation Management Board, shall identify and implement cost-effective energy conservation programs and market transformation initiatives to be supported by participating electric suppliers, as defined in section 16-244c, as amended by this act, and electric distribution companies designed to promote energy efficiency for customers participating in the retail choice and referral program established pursuant to section 16-244c, as amended by this act. Such a program may include market-based offerings, such as coupons or vouchers, for use in purchasing energy-efficient appliances or lighting and promotion of deployment of advanced metering infrastructure technology.
Sec. 6. Subsection (e) of section 16-244c of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):
(e) (1) On and after January 1, 2007, an electric distribution company shall serve customers that are not eligible to receive standard service pursuant to subsection (c) of this section as the supplier of last resort. This subsection shall not apply to customers purchasing power under contracts entered into pursuant to section 16-19hh. [Any customer previously receiving electric generation services from an electric supplier shall not be eligible to receive supplier of last resort service pursuant to this subsection unless such customer agrees to receive supplier of last resort service for a period of not less than one year.]
(2) An electric distribution company shall procure electricity at least every calendar quarter to provide electric generation services to customers pursuant to this subsection. The Department of Public Utility Control shall determine a price for such customers that reflects the full cost of providing the electricity on a monthly basis. Each electric distribution company shall recover the actual net costs of procuring and providing electric generation services pursuant to this subsection, provided such company mitigates the costs it incurs for the procurement of electric generation services for customers that are no longer receiving service pursuant to this subsection.
Sec. 7. (NEW) (Effective from passage) (a) For purposes of this section:
(1) "State facility electric supply manager" means the third-party entity that enters into a contract with the Department of Public Utility Control for the provision of state facility energy services pursuant to the provisions of this section.
(2) "State facility electric services" means electric generation services, implementation of electric conservation and load management measures, such as electric demand response, and other services related to the provision of electric service supplied to or used by facilities or properties operated by any state agency, institution or department. Such services do not include the provision or supply of electric distribution services.
(b) Notwithstanding any other provision of the general statutes, to better manage the costs of electricity, the state shall establish a leadership role with respect to managing and controlling the costs of state facilities and expanding the use of conservation and load management and energy efficiency measures for facilities owned or operated by the state, and the use of electricity consumed at such facilities for the benefit of the state as a whole. State agencies and institutions shall participate in an integrated energy purchasing and efficiency program with the oversight of the Department of Public Utility Control, pursuant to this section, which shall provide for the consolidated purchasing of electricity by state agencies and institutions, the coordinated deployment of innovative conservation and load management and energy efficiency measures throughout the facilities of state government and the coordination and joint management and use of the electric infrastructure owned or operated by state agencies or institutions as part of said program to achieve the lowest possible total energy costs for the state. It is the intent of this integrated energy purchasing and efficiency program to provide input and information to the department to be incorporated into the state's comprehensive plan for the procurement of energy resources, including, but not limited to, conventional and renewable generating facilities, energy efficiency, load management, demand response, combined heat and power facilities and distributed generation to meet the projected requirements of electric customers in a manner that minimizes the cost of such resources to customers over time consistent with the state's environmental goals and standards as set forth in section 15 of this act.
(c) (1) The department may, pursuant to this section, negotiate and enter into a contract for the supply of all or a portion of state facility electric services to all facilities or properties operated by any state agency, institution or department for a term not to exceed five years with provision for annual renewal thereafter with a third-party, possessing the requisite managerial, technical and financial capacity, as determined by the department, to perform said contract during its term. The department shall order the electric distribution companies to consolidate all of the state facilities in their respective service areas into a single consolidated combined account for purposes of billing transmission and distribution services as a single coincident peak demand. If the state facilities electric supply manager is a municipal electric energy cooperative created pursuant to chapter 101a of the general statutes, the electric distribution companies shall incorporate the load of the state facilities into any existing agreements for transmission and other related services under the terms of said agreements. The department shall further order each electric distribution company to implement, in whole or in part, on or before January 1, 2008, such measures as the department and the state facilities electric supply manager consider appropriate, including, but not limited to, the installation of necessary smart metering, communication equipment to be provided by the state facilities electric supply manager and support of necessary permit filings as required.
(2) To fulfill the purposes of this section, the department may perform all acts necessary for the negotiation, execution and administration of said contract under the terms as set forth in subsection (d) of this section and which are reasonably incidental to and further the needs of the state and the purposes of this section. The department shall cooperate with the state facilities electric supply manager to determine the demand reduction and enhanced reliability initiative opportunities to reduce federally mandated congestion charges by maximizing the value of existing and new load curtailment capability in combination or coordination with existing or new distributed resources owned or operated by any state agency, and to determine feasible options to establish the most desirable mechanism to monitor electric load levels and hourly energy market prices and initiate curtailment requests to achieve the objectives contemplated pursuant to this section. As part of this cooperation, the department shall determine the value of demand reduction at various reasonably achievable levels and feasible demand bidding options in the markets administered by the regional independent system operator to take maximum cost advantage of demand side reductions in said markets.
(d) The contract with the state facility electric supply manager entered into pursuant to subsection (c) of this section shall allow for the consolidation of accounts for the purchase of electric generation services and shall include requirements for the provision of electric generation services by the state electric supply manager, procured at wholesale either as an agent or supplier of such services and credited against the state facility load, the deployment and utilization of energy conservation and load management services, the deployment of innovative and advanced metering at state facilities or properties, the optimal utilization of state facility electric services in combination or coordination with existing or new distributed resources owned or operated by any state agency, the purchase or hedging of fuels used by any distributed resources owned or operated by any state agency, and the measurement and reporting of annual electric costs and benefits associated with overall electric procurement strategies for the state and each such state agency's or institution's implementation of energy conservation and load management measures.
(e) Any costs incurred by the state in complying with the provisions of this section, including, but not limited to, the costs incurred by the state facility electric supply manager, shall be paid from annual state appropriations. The electric distribution companies shall be eligible to recover any prudently incurred costs associated with their implementation of the provisions of this section through their rates.
(f) Each budgeted state agency that installs and implements energy conservation and load management measures at the direction of the state facility electric supply manager may reallocate to its budget for the succeeding fiscal year as determined by the official with executive authority over such state agency from the amounts appropriated to such agency for the purchase of electricity during any fiscal year. The reallocation authorized by this subsection shall equal fifty per cent of the annual net savings in electric costs, measured against the applicable published standard service electric rates as determined by section 16-244c of the general statutes, as amended by this act, incurred with respect to the facility or property operated by each such budgeted state agency resulting from installation and operation of such energy conservation and load management measures.
(g) A municipal electric energy cooperative organized under chapter 101a of the general statutes or a legal entity comprising a project, as defined in subdivision (12) of section 7-233b of the general statutes, owned or controlled by said municipal electric energy cooperative, may act as the state facility electric supply manager, pursuant to the provisions of this section, and may perform the obligations of the contract authorized by this section and shall not thereby become or be made subject to the provisions of section 16-245 of the general statutes notwithstanding any provision of the general statutes, provided no provision of said contract shall require or authorize said municipal electric energy cooperative to act in a manner inconsistent or in conflict with the provisions of chapter 101a of the general statutes, including any take or pay commitments made by said cooperative with respect to the state facility electric services provided under the contract entered pursuant to this section or to otherwise impair or restrict its existing authorities or obligations under chapter 101a of the general statutes.
(h) In furtherance of the performance of its duties pursuant to the provisions of this section, the department shall consult with the Secretary of the Office of Policy and Management and the Commissioner of Public Works.
Sec. 8. (NEW) (Effective July 1, 2007) As used in sections 8 to 10, inclusive, of this act:
(1) "Enhanced demand side management initiatives" means demand side dispatchable load management solutions, load shifting technologies, demand side dispatchable emergency generation, demand side renewable energy generation and energy efficient capital equipment financed by a Connecticut electric efficiency partner.
(2) "Connecticut electric efficiency partner" means a company formed for the purpose of providing enhanced demand side management initiatives under the terms and conditions of a contract approved by the Department of Public Utility Control between such company and the electric distribution companies.
Sec. 9. (NEW) (Effective from passage) (a) On or before July 1, 2007, the Department of Public Utility Control shall develop and issue a request for proposals to solicit responses from a Connecticut electric efficiency partner or partners for investments in enhanced demand side management initiatives.
(b) The request for proposals developed and issued pursuant to subsection (a) of this section shall include solicitations from a Connecticut electric efficiency partner or partners to design, develop, own, operate and maintain enhanced demand side management initiatives.
(c) The department shall complete the evaluation of responses and selection of a Connecticut electric efficiency partner or partners on or before November 1, 2007. The department may implement a second round of requests for proposals on or before July 1, 2008.
(d) Any proposal from a Connecticut electric efficiency partner shall describe in detail the enhanced demand side management initiative to be deployed and its target market, cost to ratepayers and projected load-reduction benefits. The department shall review and select cost-effective proposals that target activities to areas not adequately addressed and offer lasting beneficial changes in the market. The department, in its evaluation process, shall determine whether a company seeking to become a Connecticut electric efficiency partner possesses demonstrated experience in demand side management program implementation and demonstrated managerial competence. No electric distribution company and no municipal electric utility may retain greater than forty-nine per cent of the equity of any Connecticut electric efficiency partner, and no electric distribution company and no municipal electric utility may exert direct control over the operations or budget of any Connecticut electric efficiency partner. The department shall approve only those proposals that result in overall system benefits and participating customer benefits that exceed the net costs to ratepayers from the recovery of these costs in rates during the life of the contract.
(e) Upon issuance of a Department of Public Utility Control decision approving or modifying a proposal to become a Connecticut electric efficiency partner, the Connecticut electric efficiency partner shall enter into a contractual relationship with the electric distribution companies. Any such contract shall address measures of effectiveness, shall include performance milestones, and shall further include provisions allowing for the right of the department, or its designated third-party consultants, to audit the books and records of the Connecticut electric efficiency partner, and to summon and examine, under oath, such witnesses, and to direct the production of, and examine or cause to be produced and examined, such books, records, vouchers, memoranda, documents, letters, contracts or other papers in relation to the affairs of such Connecticut electric efficiency partner as it may find advisable, and shall have the same powers in reference thereto as are vested in magistrates taking depositions. Such contract shall be for a term of at least five years, and shall be renewable at the department's option.
(f) The department, in its solicitation for proposals for enhanced demand side management initiatives, shall establish the following minimum investment goals: (1) For the calendar year 2008, one hundred million dollars, (2) for the calendar year 2009, one hundred fifty million dollars, (3) for the calendar year 2010, two hundred million dollars, (4) for the calendar year 2011, two hundred fifty million dollars, and (5) for the calendar year 2012, three hundred million dollars.
(g) The department shall encourage in the request for proposal process for enhanced demand side management initiatives from a prospective Connecticut electric efficiency partner or partners responses that include investments in Class I renewable energy sources, as defined in section 16-1 of the general statutes.
(h) In the selection process, the department shall ensure that no one technology, as defined as a Class I renewable energy source, shall account for a significant portion of the total investment of Class I renewable energy source investments as a whole by all contracts for enhanced demand side management initiatives in a given year.
Sec. 10. (NEW) (Effective July 1, 2007) (a) Proposals approved by the Department of Public Utility Control from a Connecticut electric efficiency partner or partners may include an authorization for an electric distribution company or electric distribution companies, as defined in section 16-1 of the general statutes, as amended by this act, to release funds for the purpose of investing in the enhanced demand side management initiative by the Connecticut electric efficiency partner, including the cost of discounted financing, only if the projected system benefits exceed the projected subsidy costs to ratepayers. Any such funds expended by an electric distribution company and a Connecticut electric efficiency partner shall be recoverable from ratepayers at an equivalent return allowed on transmission infrastructure investments. Electric distribution companies may be eligible for an additional incremental rate of return, based on the overall net system benefit created from the enhanced demand side management initiatives, as determined by the department.
(b) A Connecticut electric efficiency partner providing enhanced demand side management initiatives through the use of discounted financing to end users pursuant to this section shall, after receiving approval from the department, enter into an agreement with an electric distribution company for such company to provide billing services with respect to the payments due to the Connecticut electric efficiency partner from the person receiving the financing. The electric distribution company shall recover all reasonable costs incurred in implementing this subsection.
(c) An electric distribution company, through a Connecticut Energy Efficiency Partner, may propose to the department the creation of a capital-intensive enhanced demand side management financing initiative. After review and approval by the department, an electric distribution company may apply to the department for approval to include such project in its rate base. The department shall review any such application to ensure that the project (1) does not target areas adequately addressed in the marketplace; (2) provides significant system benefits; and (3) offers lasting beneficial changes in the market. Such approval may include permission to defer recovery of such investment to a future rate case.
Sec. 11. Subsection (a) of section 16-245l of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):
(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, [and] (13) 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, and (14) funds released pursuant to section 10 of this act by an electric distribution company to a Connecticut electric efficiency partner, as defined in section 8 of this act. 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. 12. Subsection (a) of section 16-41 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):
(a) Each (1) public service company and its officers, agents and employees, (2) electric supplier or person providing electric generation services without a license in violation of section 16-245, and its officers, agents and employees, (3) certified telecommunications provider or person providing telecommunications services without authorization pursuant to sections 16-247f to 16-247h, inclusive, and its officers, agents and employees, (4) person, public agency or public utility, as such terms are defined in section 16-345, subject to the requirements of chapter 293, (5) person subject to the registration requirements under section 16-258a, (6) cellular mobile telephone carrier, as described in section 16-250b, [and] (7) Connecticut electric efficiency partner, as defined in section 8 of this act, and (8) company, as defined in section 16-49, shall obey, observe and comply with all applicable provisions of this title and each applicable order made or applicable regulations adopted by the Department of Public Utility Control by virtue of this title as long as the same remains in force. Any such company, electric supplier, certified telecommunications provider, Connecticut electric efficiency partner, cellular mobile telephone carrier, person, any officer, agent or employee thereof, public agency or public utility which the department finds has failed to obey or comply with any such provision of this title, order or regulation shall be fined by order of the department in accordance with the penalty prescribed for the violated provision of this title or, if no penalty is prescribed, not more than ten thousand dollars for each offense, except that the penalty shall be a fine of not more than forty thousand dollars for failure to comply with an order of the department made in accordance with the provisions of section 16-19 or 16-247k or within thirty days of such order or within any specific time period for compliance specified in such order. Each distinct violation of any such provision of this title, order or regulation shall be a separate offense and, in case of a continued violation, each day thereof shall be deemed a separate offense. Each such penalty and any interest charged pursuant to subsection (g) or (h) of section 16-49 shall be excluded from operating expenses for purposes of rate-making.
Sec. 13. (NEW) (Effective July 1, 2007) The Department of Public Utility Control, in consultation with the Office of Consumer Counsel, shall implement a public education outreach program to inform electric ratepayers about the various programs and options available to them. These include, but are not limited to, the choice of alternative electric suppliers, the range of energy efficiency products and options available, time of use rates and customer-side distributed generation programs. The department may retain the use of a consultant in accordance with section 16-18a of the general statutes, as amended by this act, to implement the outreach program.
Sec. 14. Subsection (b) of section 16-18a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):
(b) The Department of Public Utility Control may retain consultants to assist in [developing and implementing the] the implementation of a public education outreach program pursuant to section [16-244d, provided the authorization to retain such consultants shall expire December 31, 2005, and provided further the reasonable and proper expenses for such services shall not exceed three hundred fifty thousand dollars in the aggregate] 13 of this act. All reasonable and proper expenses [accrued prior to January 1, 2000,] of the program shall be borne by electric companies or electric distribution companies, as the case may be. [After the systems benefits charge begins to be collected on January 1, 2000, pursuant to section 16-245l, such companies shall recover those expenses that have been accrued by the companies up until said date through the systems benefits charge. On and after January 1, 2000, all reasonable and proper expenses shall be assessed directly through the systems benefits charge.] These expenses shall in turn be reimbursed to the electric companies or electric distribution companies through the systems benefits charge.
Sec. 15. (NEW) (Effective July 1, 2007) On or before September 1, 2007, the chairperson of the Public Utilities Control Authority and the Commissioner of Environmental Protection shall enter into a collaborative memorandum of understanding allowing for the timely permitting and operation of emergency electric generation resources as dispatchable resources available to participate in the locational Forward Reserve Market administered by the regional independent system operator, the timely installation and coordination of pollution control equipment or measures as deemed appropriate on such resources, and any necessary regulatory reviews and approvals. The objectives of the collaborative memorandum of understanding shall be to maximize the savings to the state's electric ratepayers and to benefit the state's economy as a whole, while recognizing the agencies' mutual goals of promoting a healthy economy by reducing the cost of electricity while preserving and improving the environment. The memorandum shall recognize that electric reliability charges in Connecticut largely arise because the regional independent system operator has determined that all electric generation in the state is needed to meet operational reliability requirements of the interconnected electric system and there is insufficient "quick start" electric generation capacity within the state to allow the system to recover from contingency outages of large generating units or transmission lines and further recognize that entities with operations within the state have registered with the Department of Environmental Protection a significant number of resources able to synchronize to the transmission grid and commence the generation of electricity within thirty minutes or less of a request, where the regional independent system operator currently does not recognize such resources because they are not represented in the energy management system administered. The chairperson and the commissioner of the respective state agencies shall incorporate into and include for consideration in the collaborative memorandum of understanding an estimation of the emissions reductions resulting from not using steam driven fossil fueled generating units in a reserve and spinning status to meet the quick start generating needs of the state, the estimated emissions from the use of emergency generation operating under the locational forward reserve markets of the regional independent system operator, adders to the dispatch price of the emergency electric generating resources associated with any incremental environmental emissions from such facilities and the feasibility of actions required and estimated costs to remediate some portion of such emergency generation to comply with Connecticut air quality requirements in conformance with federal and regional clean air standards. On or before September 1, 2007, and upon any additional modification to such memorandum of understanding, said chairperson and said commissioner shall report on the actions and measures taken pursuant to the memorandum of understanding directed by this section to the joint standing committees of the General Assembly having cognizance of matters relating to energy and the environment in accordance with the provisions of section 11-4a of the general statutes.
Sec. 16. (NEW) (Effective from passage) (a) Notwithstanding the provisions of title 22a of the general statutes, the Department of Environmental Protection shall review and issue a final decision no later than ninety days following the submission of a complete and accurate application with respect to each permit application filed with said department on or after May 1, 2007, and not later than January 1, 2010, which is required for the installation of emergency electric generation and distributed resources, as defined in section 16-1 of the general statutes, as amended by this act, to be offered in the locational forward reserve market including systems that utilize fossil fuels as the primary fuel source. Any such permit issued as directed by this section shall have a term of no less than three years.
(b) The Department of Environmental Protection shall notify the Department of Public Utility Control not later than August 1, 2007, of the acceptable pollution control equipment or measures applicable to the various types of emergency electric generation resources that may participate in the locational forward reserve market.
Sec. 17. (NEW) (Effective from passage) (a) Not later than June 1, 2007, each electric distribution company shall file with the Department of Public Utility Control, for review, a new plan by which each company proposes to procure electric generation services contracts for standard service. Each company's filed plan shall address, at a minimum, the following: (1) The potential benefits of various types of service contracts such as full requirements, unit specific, and block power purchases and how the plan uses all available types of service contracts to produce just, reasonable and reasonably stable retail rates, (2) the potential benefits of various term lengths for service contracts and how the plan uses all available term lengths for service contracts to create the most cost-effective portfolio, (3) the potential benefits of procuring service contracts separately for particular times of use or seasons and how the plan uses the option of procuring service contracts separately for particular times of use or seasons to create the most cost-effective portfolio, (4) the impact on price of the timing of service contract procurement and how the plan addresses and mitigates any adverse price impacts related to the timing of procurements, (5) the potential benefits of procuring service contracts separately for different customer classes and how the plan uses the option of procuring service contracts separately for different customer classes to create the most cost-effective portfolio, (6) the manner in which the competing needs of systematic process transparency and flexibility in the procurement of service contracts are balanced in the proposed plan, and (7) the need for a third party portfolio entity to acquire and administer the most cost-effective portfolio and the potential net benefit of such an entity. The plan shall also address the relationship between any capacity contracts obtained pursuant to section 16-243m of the general statutes, as amended by this act, any long-term renewable energy contracts obtained pursuant to subsection (j) of section 16-244c of the general statutes, and any existing independent power producer contracts held by the electric distribution companies and the service contracts obtained under the proposed plan and how the plan will make cost-effective use of any such resources. Each plan shall address each requirement, identify those provisions of the plan that address each requirement and demonstrate the manner in which the identified provisions will work to meet each requirement. The department shall approve or modify each such plan on or before October 1, 2007.
(b) The department shall, on a quarterly basis, conduct an assessment to determine the percentage of load served by each competitive electric supplier in each electric distribution company's service area. Not less than two months before the delivery date of any standard service contract, the department shall make available to all competitive electric suppliers the output of standard service contracts entered into by the electric distribution companies. The quantity of output available to each competitive electric supplier shall be based upon each competitive electric supplier's share of load in each electric distribution company's service area.
Sec. 18. Section 16-243a of the general statutes is amended by adding subsection (h) as follows (Effective October 1, 2007):
(NEW) (h) Not later than January 1, 2008, the Department of Public Utility Control shall adopt regulations, in accordance with the provisions of chapter 54, containing interconnection standards that promote the policies of this section and meet or exceed national standards of interconnectivity. If the department does not adopt regulations by October 1, 2008, each electric distribution company, municipal electric energy cooperative and municipal electric utility shall meet the standards set forth in Title 4, Chapter 4, Subchapter 9, "Net Metering and Interconnection Standards for Class I Renewable Energy Systems" of the New Jersey Administrative Code.
Sec. 19. 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. 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. 20. Subdivision (57) of section 12-81 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007, and applicable to assessment years commencing on or after October 1, 2007):
(57) (a) [Subject to authorization of the exemption by ordinance in any municipality, any] Any Class I renewable energy source, as defined in section 16-1, as amended by this act, or any hydropower facility described in subdivision (27) of said section 16-1 installed for the generation of electricity for private residential use, provided such installation occurs on or after October 1, 1977, and further provided such installation is for a single family dwelling or multifamily dwelling consisting of two to four units, or any passive or active solar water or space heating system or geothermal energy resource;
(b) Any person claiming the exemption provided in this subdivision for any assessment year shall, on or before the first day of November in such assessment year, file with the assessor or board of assessors in the town in which such hydropower facility, Class I renewable energy source, or passive or active solar water or space heating system or geothermal energy resource is located, written application claiming such exemption. Failure to file such application in the manner and form as provided by such assessor or board within the time limit prescribed shall constitute a waiver of the right to such exemption for such assessment year. Such application shall not be required for any assessment year following that for which the initial application is filed, provided if such hydropower facility, Class I renewable energy source, or passive or active solar water or space heating system or geothermal energy resource is altered in a manner which would require a building permit, such alteration shall be deemed a waiver of the right to such exemption until a new application, applicable with respect to such altered source, is filed and the right to such exemption is established as required initially.
Sec. 21. Section 20-340 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
The provisions of this chapter shall not apply to: (1) Persons employed by any federal, state or municipal agency; (2) employees of any public service company regulated by the Department of Public Utility Control or of any corporate affiliate of any such company when the work performed by such affiliate is on behalf of a public service company, but in either case only if the work performed is in connection with the rendition of public utility service, including the installation or maintenance of wire for community antenna television service, or is in connection with the installation or maintenance of wire or telephone sets for single-line telephone service located inside the premises of a consumer; (3) employees of any municipal corporation specially chartered by this state; (4) employees of any contractor while such contractor is performing electrical-line or emergency work for any public service company; (5) persons engaged in the installation, maintenance, repair and service of electrical or other appliances of a size customarily used for domestic use where such installation commences at an outlet receptacle or connection previously installed by persons licensed to do the same and maintenance, repair and service is confined to the appliance itself and its internal operation; (6) employees of industrial firms whose main duties concern the maintenance of the electrical work, plumbing and piping work, solar thermal work, heating, piping, cooling work, sheet metal work, elevator installation, repair and maintenance work, automotive glass work or flat glass work of such firm on its own premises or on premises leased by it for its own use; (7) employees of industrial firms when such employees' main duties concern the fabrication of glass products or electrical, plumbing and piping, fire protection sprinkler systems, solar, heating, piping, cooling, chemical piping, sheet metal or elevator installation, repair and maintenance equipment used in the production of goods sold by industrial firms, except for products, electrical, plumbing and piping systems and repair and maintenance equipment used directly in the production of a product for human consumption; (8) persons performing work necessary to the manufacture or repair of any apparatus, appliances, fixtures, equipment or devices produced by it for sale or lease; (9) employees of stage and theatrical companies performing the operation, installation and maintenance of electrical equipment if such installation commences at an outlet receptacle or connection previously installed by persons licensed to make such installation; (10) employees of carnivals, circuses or similar transient amusement shows who install electrical work, provided such installation shall be subject to the approval of the State Fire Marshal prior to use as otherwise provided by law and shall comply with applicable municipal ordinances and regulations; (11) persons engaged in the installation, maintenance, repair and service of glass or electrical, plumbing, fire protection sprinkler systems, solar, heating, piping, cooling and sheet metal equipment in and about single-family residences owned and occupied or to be occupied by such persons; provided any such installation, maintenance and repair shall be subject to inspection and approval by the building official of the municipality in which such residence is located and shall conform to the requirements of the State Building Code; (12) persons who install, maintain or repair glass in a motor vehicle owned or leased by such persons; (13) persons or entities holding themselves out to be retail sellers of glass products, but not such persons or entities that also engage in automotive glass work or flat glass work; (14) persons who install preglazed or preassembled windows or doors in residential or commercial buildings; (15) persons registered under chapter 400 who install safety-backed mirror products or repair or replace flat glass in sizes not greater than thirty square feet in residential buildings; [and] (16) sheet metal work performed in residential buildings consisting of six units or less by new home construction contractors registered pursuant to chapter 399a, by home improvement contractors registered pursuant to chapter 400 or by persons licensed pursuant to this chapter, when such work is limited to exhaust systems installed for hoods and fans in kitchens and baths, clothes dryer exhaust systems, radon vent systems, fireplaces, fireplace flues, masonry chimneys or prefabricated metal chimneys rated by the Underwriter's Laboratory or installation of stand-alone appliances including wood, pellet or other stand-alone stoves that are installed in residential buildings by such contractors or persons; and (17) employees of or any contractor employed by and under the direction of a properly licensed solar contractor, performing work limited to the hoisting, placement and anchoring of solar collectors, photovoltaic panels, towers or turbines.
Sec. 22. Section 12-412 of the general statutes is amended by adding subdivisions (117) and (118) as follows (Effective July 1, 2007, and applicable to sales occurring on or after July 1, 2007):
(NEW) (117) Sales of solar energy electricity generating systems and passive or active solar water or space heating systems and geo-thermal resource systems, including equipment related to such systems, and sales of services relating to the installation of such systems.
(NEW) (118) Sales of ice storage systems used for cooling, including equipment related to such systems, and sales of services relating to the installation of such systems by a utility ratepayer who is billed by such utility on a time-of-service metering basis.
Sec. 23. Subsection (a) of section 16-245e of the general statutes is amended by adding subdivisions (14) to (18), inclusive, as follows (Effective from passage):
(NEW) (14) "State rate reduction bonds" means the rate reduction bonds issued on June 23, 2004, by the state to sustain funding of conservation and load management and renewable energy investment programs by substituting for disbursements to the General Fund from the Energy Conservation and Load Management Funds, established by section 16-245m, as amended by this act, and from the Renewable Energy Investment Fund, established by section 16-245n. The state rate reduction bonds for the purposes of section 4-30a shall be deemed to be outstanding indebtedness of the state;
(NEW) (15) "Operating expenses" in connection with the state rate reduction bonds, means (A) all expenses, costs and liabilities of the state or the trustee incurred in connection with the administration or payment of the state rate reduction bonds or in discharge of its obligations and duties under the state rate reduction bonds or bond documents, expenses and other costs and expenses arising in connection with the state rate reduction bonds or pursuant to the financing order providing for the issuance of such bonds including any arbitrage rebate and penalties payable under the code in connection with such bonds, and (B) all fees and expenses payable or disbursable to the servicers or others under the bond documents;
(NEW) (16) "Bond documents" means, in connection with the state rate reduction bonds, the following documents: The servicing agreements, the tax compliance agreement and certificate, and the continuing disclosure agreement entered into in connection with the state rate reduction bonds and the indenture;
(NEW) (17) "Indenture" means, in connection with the state rate reduction bonds, the RRB Indenture, dated as of June 23, 2004, by and between the state and the trustee, as amended from time to time; and
(NEW) (18) "Trustee" means in connection with the state rate reduction bonds the trustee appointed under the indenture.
Sec. 24. Section 16-245e of the general statutes is amended by adding subsection (l) as follows (Effective from passage):
(NEW) (l) The sum of ninety-five million dollars is appropriated to the Treasurer, from the General Fund, for the fiscal year ending June 30, 2007, for the purpose of (1) defeasing the state rate reduction bonds maturing after December 30, 2007, by irrevocably depositing with the bond trustee in trust such appropriation to be used for the scheduled payments of principal and interest on the said state rate reduction bonds and paying operating expenses, (2) if the Treasurer determines it to be in the state's best interest, purchasing state rate reduction bonds maturing after December 30, 2007, in the open market on such terms and conditions as the Treasurer determines to be in the best interest of the state for purposes of satisfying such bonds, or (3) defeasing or satisfying the state rate reduction bonds maturing after December 30, 2007, by a combination of the methods described in subdivisions (1) and (2) of this subsection. Such appropriation is for the purpose of paying debt service on bonds or other evidences of indebtedness and related costs and expenses provided for in the indenture. After the defeasance or satisfaction of all outstanding state rate reduction bonds, the trustee shall deliver to the Treasurer or apply in accordance with the instructions of the Treasurer all moneys held by it not necessary to defease or satisfy such bonds or allocated to pay operating expenses. Such funds shall be first applied to satisfy any unpaid operating expenses. After payment of the operating expenses, seventy-five per cent of any remaining amounts shall be paid to the Energy Conservation and Load Management Funds, established pursuant to section 16-245m, as amended by this act, and twenty-five per cent of such remaining amount shall be paid to the Renewable Energy Investment Fund, established pursuant to section 16-245n. The Treasurer and the finance authority have the authority to take any necessary and appropriate actions to implement the defeasance or satisfaction of the state rate reduction bonds and the payment of all operating expenses so that the amount of state rate reduction charges which before defeasance secured the state rate reduction bonds can be applied to the Energy Conservation and Load Management Funds and the Renewable Energy Investment Fund.
Sec. 25. (Effective July 1, 2007) (a) For the purposes described in subsection (b) of this section, 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 thirty million dollars.
(b) The proceeds of the sale of said bonds, to the extent of the amount stated in subsection (a) of this section, shall be used by Connecticut Innovations, Incorporated, for the purpose of funding the net project costs, or the balance of any projects after applying any public or private financial incentives available, for any renewable energy projects in state buildings. The funds shall be made available through the Renewable Energy Investment Fund, established pursuant to section 16-245n of the general statutes. Eligible state buildings shall be Leadership in Energy and Environmental Design (LEED) certified or in the process of becoming LEED certified.
(c) 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 this section are hereby adopted and shall apply to all bonds authorized by the State Bond Commission pursuant to 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. None of said bonds shall be authorized except upon a finding by the State Bond Commission that there has been filed with it a request for such authorization which is signed by or on behalf of the Secretary of the Office of Policy and Management and states such terms and conditions as said commission, in its discretion, may require. Said bonds issued pursuant to 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 State Treasurer shall pay such principal and interest as the same become due.
Sec. 26. (NEW) (Effective from passage) (a) On or before January 1, 2008, the Department of Public Utility Control shall conduct and complete an evaluation needs assessment for baseload generation located in the state. The department shall have discretion to retain third-party consultants to assist in the preparation of the evaluation pursuant to this subsection.
(b) The evaluation conducted and completed pursuant to subsection (a) of this section shall include, but not be limited to, an assessment of the least cost per kilowatt hour generation and delivery options to Connecticut consumers.
(c) Upon completion of the evaluation conducted pursuant to this section, the department shall present its findings to the joint standing committee of the General Assembly having cognizance of matters relating to energy.
Sec. 27. Subdivision (44) of subsection (a) of section 16-1 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):
(44) "Class III renewable energy source" means (1) the electricity output from combined heat and power systems with an operating efficiency level of no less than fifty per cent that are part of customer-side distributed resources developed at commercial and industrial facilities in this state on or after January 1, 2006, [or] (2) the electricity savings created at commercial and industrial facilities in this state from conservation and load management programs begun on or after January 1, 2006, or (3) the electricity output from combined heat and power systems that increase, by not less than ten per cent, the operating efficiency level of a baseload generating facility developed in this state on or after January 1, 2006.
Sec. 28. Subsection (a) of section 16-243q of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):
(a) On and after January 1, 2007, each electric distribution company providing standard service pursuant to section 16-244c, as amended by this act, and each electric supplier as defined in section 16-1, as amended by this act, shall demonstrate to the satisfaction of the Department of Public Utility Control that not less than one per cent of the total output of such supplier or such standard service of an electric distribution company shall be obtained from Class III resources. On and after January 1, 2008, not less than [two] three per cent of the total output of any such supplier or such standard service of an electric distribution company shall, on demonstration satisfactory to the Department of Public Utility Control, be obtained from Class III resources. On or after January 1, 2009, not less than [three] four per cent of the total output of any such supplier or such standard service of an electric distribution company shall, on demonstration satisfactory to the Department of Public Utility Control, be obtained from Class III resources. On and after January 1, 2010, not less than [four] five per cent of the total output of any such supplier or such standard service of an electric distribution company shall, on demonstration satisfactory to the Department of Public Utility Control, be obtained from Class III resources. On and after January 1, 2011, not less than six per cent of the total output of any such supplier or such standard service of an electric distribution company shall, on demonstration satisfactory to the Department of Public Utility Control, be obtained from Class III resources. Electric power obtained from customer-side distributed resources that does not meet air quality standards of the Department of Environmental Protection is not eligible for purposes of meeting the percentage standards in this section.
Sec. 29. Subsection (c) of section 16-244c of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2007):
(c) (1) On and after January 1, 2007, each electric distribution company shall provide electric generation services through standard service to any customer who (A) does not arrange for or is not receiving electric generation services from an electric supplier, and (B) does not use a demand meter or has a maximum demand of less than [five hundred] three hundred fifty kilowatts.
(2) Not later than October 1, 2006, and periodically as required by subdivision (3) of this subsection, but not more often than every calendar quarter, the Department of Public Utility Control shall establish the standard service price for such customers pursuant to subdivision (3) of this subsection. Each electric distribution company shall recover the actual net costs of procuring and providing electric generation services pursuant to this subsection, provided such company mitigates the costs it incurs for the procurement of electric generation services for customers who are no longer receiving service pursuant to this subsection.
(3) An electric distribution company providing electric generation services pursuant to this subsection shall mitigate the variation of the price of the service offered to its customers by procuring electric generation services contracts in the manner prescribed in a plan approved by the department. Such plan shall require the procurement of a portfolio of service contracts sufficient to meet the projected load of the electric distribution company. Such plan shall require that the portfolio of service contracts be procured in an overlapping pattern of fixed periods at such times and in such manner and duration as the department determines to be most likely to produce just, reasonable and reasonably stable retail rates while reflecting underlying wholesale market prices over time. The portfolio of contracts shall be assembled in such manner as to invite competition; guard against favoritism, improvidence, extravagance, fraud and corruption; and secure a reliable electricity supply while avoiding unusual, anomalous or excessive pricing. The portfolio of contracts procured under such plan shall be for terms of not less than six months, provided contracts for shorter periods may be procured under such conditions as the department shall prescribe to (A) ensure the lowest rates possible for end-use customers; (B) ensure reliable service under extraordinary circumstances; and (C) ensure the prudent management of the contract portfolio. An electric distribution company may receive a bid for an electric generation services contract from any of its generation entities or affiliates, provided such generation entity or affiliate submits its bid the business day preceding the first day on which an unaffiliated electric supplier may submit its bid and further provided the electric distribution company and the generation entity or affiliate are in compliance with the code of conduct established in section 16-244h.
(4) The department, in consultation with the Office of Consumer Counsel, shall retain the services of a third-party entity with expertise in the area of energy procurement to oversee the initial development of the request for proposals and the procurement of contracts by an electric distribution company for the provision of electric generation services offered pursuant to this subsection. Costs associated with the retention of such third-party entity shall be included in the cost of electric generation services that is included in such price.
(5) Each bidder for a standard service contract shall submit its bid to the electric distribution company and the third-party entity who shall jointly review the bids and submit an overview of all bids together with a joint recommendation to the department as to the preferred bidders. The department may, within ten business days of submission of the overview, reject the recommendation regarding preferred bidders. In the event that the department rejects the preferred bids, the electric distribution company and the third-party entity shall rebid the service pursuant to this subdivision.
Sec. 30. (NEW) (Effective July 1, 2007) A municipal electric utility shall contribute a pro rata share of the one-time awards made to customer-side distributed resources made pursuant to subsection (a) of section 16-243i of the general statutes in order for customers in its service area to qualify for such awards. The Department of Public Utility Control shall conduct an uncontested case proceeding to determine the municipal electric utility's pro rata share. Said pro rata share shall be based on the proportion of the aggregate annual kilowatt hours of electricity sold by the municipal electric utilities in the state to retail customers as a percentage of the total annual kilowatt hours of electricity sold in the state. The pro rata share that is not paid by the municipal electric utilities shall be recovered through federally mandated congestion charges in nonmunicipal electric utility service areas and shall be paid in equal semi-annual payments for a period of not more than five years.
This act shall take effect as follows and shall amend the following sections: | ||
Section 1 |
July 1, 2007 |
New section |
Sec. 2 |
from passage |
New section |
Sec. 3 |
July 1, 2007 |
New section |
Sec. 4 |
January 1, 2008 |
16-244c |
Sec. 5 |
January 1, 2008 |
16-245m |
Sec. 6 |
July 1, 2007 |
16-244c(e) |
Sec. 7 |
from passage |
New section |
Sec. 8 |
July 1, 2007 |
New section |
Sec. 9 |
from passage |
New section |
Sec. 10 |
July 1, 2007 |
New section |
Sec. 11 |
July 1, 2007 |
16-245l(a) |
Sec. 12 |
July 1, 2007 |
16-41(a) |
Sec. 13 |
July 1, 2007 |
New section |
Sec. 14 |
July 1, 2007 |
16-18a(b) |
Sec. 15 |
July 1, 2007 |
New section |
Sec. 16 |
from passage |
New section |
Sec. 17 |
from passage |
New section |
Sec. 18 |
October 1, 2007 |
16-243a |
Sec. 19 |
October 1, 2007 |
16-243h |
Sec. 20 |
October 1, 2007, and applicable to assessment years commencing on or after October 1, 2007 |
12-81(57) |
Sec. 21 |
from passage |
20-340 |
Sec. 22 |
July 1, 2007, and applicable to sales occurring on or after July 1, 2007 |
12-412 |
Sec. 23 |
from passage |
16-245e(a) |
Sec. 24 |
from passage |
16-245e |
Sec. 25 |
July 1, 2007 |
New section |
Sec. 26 |
from passage |
New section |
Sec. 27 |
July 1, 2007 |
16-1(a)(44) |
Sec. 28 |
July 1, 2007 |
16-243q(a) |
Sec. 29 |
July 1, 2007 |
16-244c(c) |
Sec. 30 |
July 1, 2007 |
New section |
ET |
Joint Favorable Subst. |
The following fiscal impact statement and bill analysis are prepared for the benefit of members of the General Assembly, solely for the purpose of information, summarization, and explanation, and do not represent the intent of the General Assembly or either chamber thereof for any purpose:
OFA Fiscal Note
State Impact: See Below
Municipal Impact: See Below
Explanation
The bill makes various changes in the electric industry structure and other energy related programs that could affect rates paid by the state and municipalities, the extent of which cannot be determined at this time.
The bill also results in other fiscal impacts, as follows:
Section 7 provides that each budgeted agency that installs and implements energy conservation and load management measures at the direction of the state facility electric supply manager may reallocate 50% of the annual net savings in electric costs to its budget for the next fiscal year. In FY 07, and under the Governor's recommended budget for the 2008 - 2009 biennium, energy costs are budgeted to: (1) agencies that have care and control of their own facilities; (2) the Department of Public Works, which has care and control of certain state facilities; and (3) the Office of Policy and Management (OPM) for Energy Contingency costs. Historically, agencies do not budget the full amount anticipated for energy costs and the shortfall is funded through a separate Energy Contingency account in OPM. The Energy Contingency funds available for FY 07 are $10.245 million and the Governor's recommended budget provides $10 million in each of FY 08 and FY 09 for this purpose. Because electricity costs are not budgeted to agencies that do not have care and control of their facilities, it is unclear how such agencies would be credited with 50% of the energy savings they achieve. In addition, the bill does not indicate how such funds will be reallocated to the next fiscal year. It is assumed that the 50% savings would not lapse at the end of the fiscal year and would be carried forward to the following fiscal year.
Section 15 requires DPUC and DEP to enter into a memorandum of understanding (MOU) regarding the timely permitting and operation of emergency generation resources. Both DPUC and DEP anticipate entering into this MOU within existing agency resources.
Section 16 requires DEP to issue a final decision on certain permits no later than 90 days following submission of a complete and accurate application within air program resources and to the extent that a hearing is not requested. This also can be performed within existing agency resources.
Section 20 of the bill requires, rather than allows, municipalities to exempt class I renewable resources and hydropower facilities from the property tax. It also requires them to exempt solar water or space heating systems and geothermal energy resources from the tax. Municipalities will experience a loss to their net grand list (assessed value less exemptions permitted under state law) as a result of having to exempt this property and will likely necessitate an increase in a municipality's mill rate to offset the loss of taxable property.
Section 22 of the bill exempts the sales and installation of solar energy systems, geothermal resource systems, and ice storage systems used for cooling from sales tax beginning 7/1/07. These exemptions are anticipated to result in a General Fund revenue loss of $500,000 in FY 08 and $700,000 in FY 09.
Sections 23 and 24 provide $95 million from the General Fund in FY 07 to defease1 state rate reduction bonds that mature after 12/30/07. The $95 million will be deposited into an irrevocable trust account where it will be invested and accumulate interest. The funds in this account will be used to pay the debt service due on the bonds at their maturity date (column c in table below).
Special Obligation Rate Reduction Bonds Outstanding after 12/30/07 | |||
($ millions) | |||
Maturity Date |
Principal |
Interest |
Total Debt Service |
a |
b |
c (a+b) | |
06/30/08 |
14.7 |
2.7 |
17.4 |
12/30/08 |
15.1 |
2.4 |
17.4 |
06/30/09 |
15.5 |
2.0 |
17.4 |
12/30/09 |
15.8 |
1.6 |
17.4 |
06/30/10 |
16.2 |
1.2 |
17.4 |
12/30/10 |
16.6 |
0.8 |
17.4 |
06/30/11 |
17.0 |
0.4 |
17.4 |
Total |
111.0 |
11.1 |
122.1 |
There is no fiscal impact to the State Treasurer's Office to perform bond defeasance.
Section 25 authorizes the issuance of $30 million in General Obligation (GO) bonds for renewable energy projects in state-owned buildings through the Renewable Energy Investment Fund. The debt service cost to bond this amount over 20 years at a 5.0% interest rate is $45.8 million.
The Connecticut Innovations, Inc. (CII) would need ½ of a full time employee plus fringe benefits and associated other expenses at a cost of approximately $75,000 in FY 2008 to administer the renewable energy projects in state building program. It is anticipated that these costs would come from (CII) operating funds.
The Out Years
The annualized ongoing fiscal impact identified above would continue into the future subject to inflation except for the effects described above and for the effect on electric rate structures which cannot be determined at this time.
OLR Bill Analysis
AN ACT CONCERNING ELECTRIC RATE RELIEF.
This bill establishes a wide range of energy initiatives. Among other things, it
1. allows an electric company to sell certain transmission lines to another electric company, a municipal electric utility, or the Connecticut Municipal Electric Energy Cooperative (CMEEC);
2. requires the Energy Conservation Management Board (ECMB) to identify how Connecticut can become a national leader in energy efficiency;
3. requires each electric company to submit a plan to the Department of Public Utility Control (DPUC) to deploy a system to support advanced metering;
4. contains several measures to make it easier for an electric customer to choose a competitive supplier;
5. requires state agencies to participate in an integrated energy purchasing and efficiency program and gives DPUC oversight over this program;
6. allows electric companies to enter into partnerships with non-utility parties to promote energy efficiency and distributed resources (small generators) on customers' premises, with the costs of these partnerships recovered in electric rates;
7. amends how electric companies procure power for their small and medium-sized (standard service) customers who do not choose competitive suppliers;
8. replaces money that was transferred to the General Fund from the electric companies' conservation funds and the state's Clean Energy Fund; and
9. authorizes up to $30 million in bonds for renewable energy projects in state buildings.
The analysis below summarizes each section of the bill, in order.
EFFECTIVE DATE: Various, see below
§ 1 — SALE OF TRANSMISSION LINES
The bill allows an electric company to sell certain transmission lines to another electric company, a municipal electric utility, CMEEC, or another entity. The eligible lines are (1) new or modified lines that operate at 345 kilovolts or more and (2) other transmission lines that provide local service.
Each electric company that sells transmission lines must submit a transfer plan to DPUC. In the case of existing lines, or lines that will be placed in the company's rate base by January 1, 2009, the plan must be submitted by September 30, 2007. For other lines, the plan must be submitted at least 90 days before the construction begins, or at least 90 days before it begins commercial operations if the line is already under construction. The plan must provide for the transfer of the line at its net book value (capital cost) minus depreciation. The plan must include terms that will not harm the selling company's customers.
DPUC must hold a hearing on the plan and approve or modify it. In the case of plans submitted by the September 30, 2007 deadline, DPUC must issue its final order in time for the transfer to be made by April 1, 2009. In the case of other lines, DPUC must issue its final order before the line goes into the company's rate base. The review conducted under the bill takes the place of a proceeding DPUC must normally hold when a utility seeks to sell its assets.
The purchasing utility must make its payments to the selling company from 30 to 120 days after DPUC issues its final order. If the purchasing utility does not make the payment in this period, the selling company's obligation to transfer the line lapses permanently. The purchasing utility's share of the ownership of the line is proportional to its share of the electrical demand in the state. If the purchaser is a municipal utility, its share is set at CMEEC's share of the load in the state.
Even though the ownership of the lines changes hands, the selling company or Independent System Operator-New England (ISO-NE), the entity that administers the regional wholesale electric market, must retain control over, and operational responsibility for, the lines.
DPUC must recognize the sales proceeds as a “regulatory asset” of the selling company. As a result, the company will continue to earn a rate of return on its equity investment in the line. By November 1, 2007, DPUC must hold a contested case proceeding to determine the rate of return and depreciation life for the transferred lines. The rate of return can be no less than the rate the company would have earned had it continued to own the line. The company is allowed to recover the costs of its investment through its rates over a period not longer than the line's depreciation life as determined by DPUC, although presumably the payment from the purchasing utility covers this investment.
The selling company can use the money it receives on specified electric efficiency programs, as described in § 9.
EFFECTIVE DATE: Upon passage, except for the definitions, which are effective July 1, 2007.
§ 2 — NEW ENERGY EFFICIENCY INITIATIVES AND ADVANCED METERING
Energy Efficiency
The bill requires ECMB to develop a “Connecticut energy excellence plan,” which must at least:
1. describe in detail any existing Connecticut higher educational energy efficiency resources,
2. quantify the role that energy efficiency programs can play in creating a more efficient and competitive business climate,
3. identify measures that can be employed and investments in research that can be made to make Connecticut a national leader in energy efficiency, and
4. detail how energy efficiency efforts can be expanded to reduce the state's peak electric demand by at least 10% by 2010.
Advanced Metering
The bill requires each electric company to submit a plan to DPUC by July 1, 2007 to deploy a system to support advanced metering. The system must support net metering, under which electric companies are currently required to pay residential customers for the power the customers produce from renewable resources. The system must also be capable of tracking hourly changes in a customer's power use to support time-of-use pricing. The metering system must be able measure changes in consumption and peak demand in a 15-minute increments. It also must allow the customer or the competitive supplier he has chosen to access the data electronically.
The plan must allow for deployment of a network capable of supporting advanced metering of 75% of all of the electric company's customers by January 1, 2008 and the rest by January 1, 2009. It must provide for installing an advanced meter within 60 days of (1) the customer requesting one or (2) the customer choosing a competitive supplier who requests an advanced meter for the customer. For other customers, the plan must provide for installing advanced meters to comply with existing DPUC orders with regard to time-of-use rates. DPUC must approve the plans by January 1, 2008.
The companies must pay for the cost of the system, including the meters and supporting network, and recover the costs through their rates. They can continue to recover the costs of the existing meters through rates.
DPUC must allocate half of the money restored to the Conservation Fund under § 24 of the bill to pay for this initiative.
EFFECTIVE DATE: Upon passage
§ 3 — TIME-OF-USE RATES
The bill requires competitive suppliers and aggregators to offer time of use rates, including hourly and real-time options, to all of their customers by January 1, 2008. Aggregators gather customers together to make them more attractive to suppliers.
EFFECTIVE DATE: July 1, 2007
§§ 4 & 5 — RETAIL SUPPLIER CHOICE AND REFERRAL PROGRAM
Bill Inserts Regarding Competitive Suppliers
The bill establishes several measures to make it easier for an electric customer to choose a competitive supplier. It allows suppliers to provide information on their introductory offers to small- and medium-sized standard service customers as an insert on the customer's electric bill. For participating suppliers, the introductory offer must compare its cost of power to the cost under standard service. Each participating supplier must offer at least one time-of-use rate. It can offer fixed-priced and “green” options. Participating suppliers must allow customers to enroll by marking the appropriate box on the bill insert, by telephone, or through a DPUC website. DPUC must establish comparable enrollment procedures for electric company customers who pay electronically or through third parties whenever this is practicable (e.g., those in which the proposition of power provided by renewable resources exceeds the requirements of the renewable portfolio standard (RPS)).
Referral Programs
The bill requires electric companies, at DPUC's direction, to offer customers information on suppliers' introductory offers when the customer starts a new service or moves his home or business. If the customer chooses a specific supplier, he must be enrolled with that supplier. If the customer does not choose a specific supplier, one will be chosen for him on a rotating basis.
In addition, whenever a customer calls the electric company, he or she must be offered the option of learning about his ability to choose a supplier and be told that he or she has the option to save money by choosing a supplier (although the bill does not require participating suppliers to offer a discount off of the standard service rate). If the customer expresses an interest, he or she must be transferred to a customer service representative and told of the available introductory offers. If the customer chooses a specific supplier, he or she must be enrolled with that supplier.
In all three cases (the offers made in bill inserts, or when the customer begins service or calls the electric company), after the introductory offer ends, the customer can return to standard service or choose another supplier. If the customer takes no action, he or she stays with the supplier who provided the introductory offer. Under the first (bill insert) provision, the customer must provide 30 days written notice before switching to a new supplier or going back to standard service.
Buying Pool
The bill requires DPUC to establish a voluntary buying pool for standard service customers. DPUC must promote the pool through advertising and marketing. The pool must be created from customers who choose to participate by (1) marking a check box on their electric bills, (2) calling a toll-free number, (3) using a DPUC website, or (4) responding to a non-utility mailing approved by DPUC. It appears that the buying pool operates independently from the referral programs described above.
Enrollment in the initial pool continues for a period specified by DPUC not to exceed 90 days from the time it announces the pool's creation. Once the pool is closed, DPUC must solicit bids from competitive suppliers to serve the customers in the pool. DPUC can choose one or more bidders in an uncontested proceeding based on their price compared to the price of standard service, the bidder's financial and managerial strength, and its ability to adhere to current retail choice rules. If DPUC finds none of the bids acceptable, it must seek new bids within 120 days after rejecting the initial bids. Customers who chose to enter the pool stay in it until DPUC chooses the winning bidders. If DPUC does not choose winning bidders within one year after the initial solicitation for bids, the pool is dissolved.
The winning bidders must provide service to members of the pool for one year. During this time members can, without penalty, choose another supplier or another service offered by their current supplier. After the year ends, the customer can return to standard service or choose another supplier. If the customer takes no action, he or she stays with the supplier who served the pool.
DPUC can establish subsequent pools, although not in the 30 days after it selects winning bidders in the initial pool. To the extent practicable, customers already served by competitive suppliers must not be solicited to join the new pool.
Electric Company Cost Recovery and Incentives
The bill entitles the electric companies to recover all of the costs they prudently incur in implementing the initiatives described above. It requires DPUC to establish performance-based financial incentives for the companies operating the programs.
Conservation Programs for Participating Customers
The bill requires DPUC, in consultation with ECMB, to implement cost-effective conservation programs for customers participating in the choice and referral programs described above. The conservation programs may include (1) the use of coupons or vouchers to encourage customers to buy energy-efficient lighting and appliances and (2) promotion of advanced metering systems. Participating suppliers and the electric companies must support the conservation programs, although the bill does not specify how or how the conservation programs would be funded.
Additional Provisions
The bill allows electric companies to provide enhanced billing and related services at DPUC-set rates, which cannot exceed the companies' costs. However, DPUC can establish performance-based financial incentives for the electric companies in connection with these services.
The bill requires each electric company to implement a program in which it buys accounts receivable from competitive suppliers, with full and timely cost recovery by the electric company under DPUC-set terms and conditions.
The bill requires electric companies to provide certain customer information to a supplier upon request, unless the customer objects. The information includes the account name and number, billing and service addresses, and consumption data for the last 12 months, among other things.
EFFECTIVE DATE: January 1, 2008
§§ 4(Q) & 6 — SWITCHING SUPPLIERS, LAST RESORT SERVICE
The bill allows a customer to switch at any time from a supplier to standard service or last-resort service (which is provided to large customers). It allows a customer to switch from an electric company to a supplier at any time without paying a penalty. It repeals a provision that prohibited customers who had received last-resort service from returning to this service unless they agree to stay on this service for at least one year. It requires electric companies to procure power for last-resort service at least once per quarter.
EFFECTIVE DATE: July 1, 2007 for the repeal, January 1, 2008 for the remaining provisions
§ 7 — ENERGY SERVICES FOR STATE FACILITIES
The bill requires state agencies and institutions to participate in an integrated energy purchasing and efficiency program and gives DPUC oversight of it.
The program must provide for:
1. consolidated electricity purchases,
2. coordinated deployment of innovative conservation and load management and energy efficiency standards, and
3. coordination and joint management and use of state-owned or operated electric infrastructure used to achieve the lowest possible total energy costs for the state.
Each state agency that implements energy conservation and load management measures under the program may reallocate 50% of the annual net savings in electric costs to its budget for the next fiscal year. The savings is based on the standard service rate, whether or not the agency is on this rate.
Under the bill, DPUC may contract with a third party, including CMEEC or a project that it owns or controls, to provide all or some of state facility electric services (i.e., power, conservation, and related services) for up to five years. The contractor must possess the requisite managerial, technical, and financial capacity that DPUC determines necessary to perform the contract. If CMEEC is chosen as the contractor, it does not thereby come under DPUC jurisdiction. The contract may be renewed annually.
The contract must allow for the purchase of electric generation services on a consolidated basis across agencies. It must also require the contractor to:
1. provide electric generation services that he procured at wholesale and credited against the state facility load;
2. use energy conservation and load management services, maximize the use of state facility electric services in combination or coordination with existing or new distributed resources that a state agency owns or operates;
3. purchase or hedge fuels used by any distributed resources owned or operated by any state agency; and
4. measure and report annual electric costs and benefits associated with overall electric procurement strategies for the state and each state agency's or institution's implementation of energy conservation and load management measures.
DPUC, in cooperation with the contractor, must determine (1) how to reduce federally mandated congestion charges by maximizing the value of existing and new load curtailment capability in combination or coordination with existing or new distributed resources owned or operated by any state agency, and (2) feasible options for establishing the most desirable mechanism to monitor electric load levels and hourly energy market prices and initiating curtailment requests to achieve the bill's objectives.
DPUC must order electric companies to (1) at least partially implement, by January 1, 2008, any measures DPUC or the contractor considers appropriate, including the installation of necessary smart metering and communication equipment and (2) consolidate all of the state facilities in their service areas into a single consolidated account so that transmission and distribution services are billed as a single coincident peak demand. If CMEEC is chosen as the contractor, the electric companies must incorporate the state facilities' load into any existing agreement for transmission or related services and under the same terms.
The companies may recover implementation costs through their rates. The state recovers its cost including the cost incurred by the state facilities contractor from the state budget. DPUC must consult with the Office of Policy and Management and the Department of Public Works in implementing those provisions.
EFFECTIVE DATE: Upon passage
§§ 8-12 — CONNECTICUT ELECTRIC EFFICIENCY PARTNERSHIP PROGRAM
The bill requires DPUC, by July 1, 2007 (the section's effective date) to issue a request for proposals (RFP) from companies formed to provide investments in enhanced demand-side initiatives under DPUC-approved terms and conditions. The bill refers to these companies as Connecticut electric efficiency partners. It subjects the partners to DPUC orders and civil penalties if they disobey them. Electric companies and municipal electric utilities can own up to 49% of a partner's equity, but cannot exert direct control over its operations or budget. DPUC must set a goal in the RFP of $100 million in investments in 2008, with the goal increasing by $50 million in each of the next four years.
The initiatives to be sought in the RFP are:
1. load management measures that can be dispatched, i.e., centrally controlled;
2. load shifting technologies;
3. dispatchable emergency generation;
4. renewable energy generation; and
5. energy efficient capital equipment.
The RFP must solicit prospective partners to design, develop, own, operate, and maintain these initiatives. DPUC must encourage proposals for investments in class I renewable resources, such as solar technologies and fuel cells. But DPUC must ensure that no one technology accounts for a significant proportion of the total investments in class I resources approved under these provision. Any proposal must describe in detail the initiative to be deployed, its target market, the cost to ratepayers, and its projected load-reduction benefits.
DPUC must review and select cost-effective proposals that target activities to areas not adequately addressed (presumably by existing programs) and offer lasting beneficial changes in the market. When DPUC evaluates proposals, it must determine whether a company seeking to become a partner has experience in implementing demand side management programs and has demonstrated managerial competence. DPUC can only approve proposals that benefit the system as a whole and provide benefits to participating customers that exceed the net costs to ratepayers from recovering the initiatives' costs in rates during the life of the contract between the partner and the electric company.
DPUC must evaluate the proposals and choose one or more partners by November 1, 2007. It may issue a second RFP by July 1, 2008. Once it has selected the partners, each one must enter into a contract with the electric companies. The contract must include effectiveness measures, performance milestones, and provisions allowing DPUC or its consultants to audit the partner's books and records and subpoena witnesses and records. The contract must be for at least five years and renewable at DPUC's option (although DPUC is not a party to the contract).
DPUC-approved proposals can include an authorization for an electric company to invest in the partner's initiatives, including discounted financing programs. But electric companies can only do this if the projected system benefits exceed the projected subsidy costs to ratepayers. The costs of the investments by the electric company and the partner are recovered from ratepayers at a return equal to that allowed on transmission line investments. DPUC may also allow electric companies to earn a bonus rate of return, based on the overall net system benefit created from initiatives. However, § 11 provides that the costs of the electric company's investments are recovered in the systems benefit charge on electric bills. The bill thus appears to provide two cost-recovery mechanisms.
A partner providing discounted financing to end users must, after receiving DPUC approval, enter into an agreement with an electric company for it to provide billing services with respect to the payments due to the partner from the person receiving the financing. The electric company must recover all of its reasonable implementation costs.
An electric company, through a partner, may propose to DPUC to create a capital-intensive enhanced demand side management financing initiative. DPUC must review the applications to ensure that the projects (1) do not target areas adequately addressed in the marketplace; (2) provide significant system benefits; and (3) offer lasting and beneficial changes in the market. After DPUC review and approval, the company may apply to DPUC for approval to include such projects in its rate base. DPUC's approval may allow the company to defer recovery of such investment to a future rate case.
EFFECTIVE DATE: July 1, 2007
§§ 13 & 14 — PUBLIC EDUCATION PROGRAMS
The bill requires DPUC, in consultation with the Office of Consumer Counsel, to implement an outreach program to inform electric ratepayers about the various programs and options available to them. These include choices of alternative electric suppliers, the range of energy efficiency products and options available, time of use rates, and programs that encourage customer-side distributed generation (technologies such as microturbines or fuel cells on the customer's premises). DPUC may retain a consultant to implement the program. (The authorization for DPUC to retain consultants for a prior education program expired December 31, 2005.) The reasonable expenses for retaining the consultant and implementing the program are recovered from the systems benefits charge on electric bills.
EFFECTIVE DATE: July 1, 2007
§ 15 — DPUC/DEP MEMORANDUM OF UNDERSTANDING ON EMERGENCY GENERATORS
The bill requires DPUC and the Department of Environmental Protection (DEP) to enter into a memorandum of understanding by September 1, 2007. The memorandum must allow for the timely permitting and operation of emergency electric generation resources so that they can participate in the locational forward reserve market (this wholesale electric market will provide incentives for dispatchable generation). The memorandum must also cover (1) the installation of pollution control equipment or measures on these generators and (2) the timely coordination of such installation and any necessary regulatory reviews and approvals. The bill specifies the objectives of the memorandum, which include, among other things, the maximization of the savings to electric ratepayers while preserving and improving the environment. The agencies must include in the memorandum, among other things, an estimate of the emissions reductions caused by a decreased reliance on traditional power plants in meeting the state's electric reliability needs. The agencies must report to the Energy and Technology and Environment committees on the actions and measures they have taken under the memorandum by September 1, 2007 and whenever the memorandum is modified.
EFFECTIVE DATE: July 1, 2007
§ 16 — DEP PERMITTING
The bill requires DEP to issue a final decision no later than 90 days following the submission of a complete and accurate application for certain permit applications filed with DEP between May 1, 2007 and January 1, 2010. The provision applies to permits for installing emergency generators and distributed resources that will be offered in the locational forward reserve market. Any such permit must run for at least three years.
By August 1, 2007, DEP must notify DPUC of the acceptable pollution control equipment or measures applicable to the various types of emergency electric generation resources that may participate in the locational forward reserve market.
EFFECTIVE DATE: Upon passage
§ 17 — PROCURING POWER FOR STANDARD SERVICE
The bill requires each electric company to file with DPUC a new plan for procuring power contracts for standard service by June 1, 2007. Each plan must address: (1) the potential benefits of various types of contracts such as full requirements and unit specific and block power purchases; (2) how the plan uses all available types of contracts to produce just, reasonable, and reasonably stable retail rates; (3) the potential benefits of various term lengths for service contracts and how the plan uses all available term lengths for service contracts to create the most cost-effective portfolio; (4) the potential benefits of procuring contracts separately for particular times of use or seasons and how the plan uses these options to create the most cost-effective portfolio; (5) how the timing of contract procurement affects electric prices and how the plan addresses and mitigates any adverse price impacts related to the timing of procurements; (6) the potential benefits of procuring contracts separately for different customer classes and how the plan uses these options to create the most cost-effective portfolio; (7) how the plan balances the competing needs of transparency and flexibility in the process of procuring contracts; and (8) the need for a third party to acquire and administer the most cost-effective portfolio and the potential net benefit of such an entity. The plan must also address the relationship between any capacity contracts obtained under current law and any existing contracts between non-utility generators and electric companies and the service contracts obtained under the proposed plan and how the plan will make cost-effective use of any such resources.
Each plan must address each requirement, identify those provisions of the plan that address each requirement, and demonstrate how the plan will meet each requirement. DPUC must approve or modify each plan by October 1, 2007. The bill does not amend or repeal the existing law governing the electric companies' procurement of power for standard service, which has substantially different requirements.
The bill requires DPUC, on a quarterly basis, to determine the percentage of load served by each competitive supplier in each electric company's service area. Within two months before the delivery date of any standard service contract, DPUC must make available to all competitive suppliers the output of standard service contracts entered into by the electric companies. The quantity of output available to each must be based upon each supplier's share of load in each service area. The bill does not specifically require the suppliers to pay the electric companies for the power.
EFFECTIVE DATE: Upon passage
§ 18 — POWER PLANT INTERCONNECTION STANDARDS
By law, electric utilities (including municipal electric utilities) must interconnect with non-utility generators. The bill requires DPUC to adopt regulations on interconnection by January 1, 2008 that meet or exceed national standards. (Interconnection standards deal with such things as the transformers that connect generating facilities with transmission lines.) If DPUC has not adopted these regulations by October 1, 2008, each of the utilities and the municipal electric energy cooperative must meet New Jersey's interconnection standards.
EFFECTIVE DATE: October 1, 2007
§ 19 — NET METERING
By law, electric utilities and competitive suppliers must give a credit to their customers in one- to-four-dwelling-unit properties who generate electricity using class I renewable resources or hydropower. The bill expands these provisions to cover commercial customers with generating capacity up to two megawatts. It provides for payments to customers who generate more power than they use in a given billing period, providing a credit against the next billing period. At the end of the billing year, the company or supplier must compensate the owner for any remaining excess production at its wholesale cost.
EFFECTIVE DATE: October 1, 2007 and all applicable assessment years beginning on or after that date
§ 20 — PROPERTY TAX EXEMPTIONS FOR RENEWABLE RESOURCES
The bill requires, rather than allows, municipalities to exempt class I renewable resources (such as photovoltaic systems) and hydropower facilities at one- to-four-unit dwellings from the property tax. It also requires them to exempt any passive or active solar water or space heating system and geothermal energy resources from the tax, regardless of location.
EFFECTIVE DATE: October 1, 2007
§ 21 — SOLAR CONTRACTOR LICENSING
The bill exempts from Department of Consumer Protection licensure requirements employees and subcontractors of licensed solar contractors engaged in solar technology installations, who perform work limited to hoisting, placement, and anchoring of solar equipment.
EFFECTIVE DATE: Upon passage
§ 22 — SALES TAX EXEMPTIONS
The bill exempts from the sales tax:
1. sales of active and passive solar energy systems, geothermal resource systems, and related installation services and
2. sales of ice storage systems used for cooling, including related equipment and installation services, for customers who are billed on time-of-use rates.
EFFECTIVE DATE: July 1, 2007 and applicable to sales on or after that date
§§ 23 & 24 — RESTORING UTILITY CONSERVATION FUNDS AND THE CLEAN ENERGY FUND
In recent years, the legislature has diverted to the General Fund part of the revenues that would have otherwise gone into the electric companies' conservation funds and the state's Clean Energy Fund. To reduce the impact of the transfer on the conservation and clean energy funds, it authorized the issuance of bonds backed by future revenue from the conservation and renewable energy charges on electric bills.
The bill instead makes these bonds outstanding state indebtedness. It appropriates $95 million from the FY 07 budget surplus to defease or buy back the bonds that mature after December 30, 2007, or a combination of these measures. Seventy-five percent of the revenues freed up as a result of this measure (net of the state's administrative costs) must go back into the conservation funds and 25% must go back into the Clean Energy Fund.
EFFECTIVE DATE: Upon passage
§ 25 — BONDING FOR RENEWABLE ENERGY PROJECTS IN STATE BUILDINGS
The bill authorizes up to $30 million in bonds for Connecticut Innovations, Inc., which administers the Clean Energy Fund, to fund the net project costs of renewable energy projects in state buildings. To be eligible, the building must be certified in the Leadership in Energy and Environmental Design (LEED) program or be in the process of certification.
EFFECTIVE DATE: July 1, 2007
§ 26 — DPUC STUDY OF BASELOAD GENERATION
The bill requires DPUC, by January 1, 2008, to evaluate the state's need for baseload generation (power plants that operate most of the time throughout the year). The evaluation must include an assessment of the least cost per kilowatt-hour generation and delivery options for consumers. DPUC can retain a consultant to help it prepare the evaluation. It must report its findings to the Energy and Technology Committee.
EFFECTIVE DATE: Upon passage
§§ 27 & 28 — CLASS III RENEWABLE RESOURCES
By law, electric companies and suppliers must get part of their supply from class III resources as part of the RPS. The bill makes several changes regarding these resources. Under current law, they are (1) electricity produced by systems that produce heat and power that are developed at commercial and industrial facilities and (2) electricity savings from conservation and load management programs at these facilities that began on or after January 1, 2006. The bill expands class III resources to include combined heat and power (cogeneration) systems that increase, by at least 10%, the operating efficiency of baseload generating plants developed on or after January 1, 2006.
Under current law, electric companies and suppliers must get 1% of their power from class III resources this year, 2% starting in 2008, 3% in 2009, and 4% in 2010 and thereafter. The bill increases the requirements in 2008 through 2010 by 1% in each year, and requires that electric companies and suppliers get at least 6% of their power from class III resources in 2011 and thereafter.
EFFECTIVE DATE: July 1, 2007
§ 29 — STANDARD SERVICE AND LAST-RESORT SERVICE
The bill reduces, from 500 kilowatts to 350 kilowatts, the maximum demand a customer can have to be eligible for standard service. As a result, customers with a demand of between 350 and 500 kilowatts would be transferred to last-resort service.
EFFECTIVE DATE: July 1, 2007
§ 30 — MUNICIPAL UTILITIES AND DISTRIBUTED GENERATION
PA 05-1, June Special Session, established incentives for new distributed generation (e. g., small power plants using technologies such as microturbines and fuel cells). Currently, the awards are funded by a charge on the bills of electric company customers.
The bill requires municipal electric utilities to contribute a pro rata share of the awards in order for their customers to be eligible for them. DPUC must conduct a contested case to determine the utility's share, which must be proportional to the municipal utilities' share of the total amount of electricity sold in the state. Funding for the remaining portion of the award continues to come from electric company customers, paid in semiannual payments over a period of up to five years.
EFFECTIVE DATE: July 1, 2007
BACKGROUND
Related Bills
HB 7098, An Act Concerning Connecticut's Energy Future, favorably reported by the Energy and Technology Committee, has several similar provisions. These include the DPUC/DEP memorandum of understanding, interconnection standards, net metering, and tax provisions.
SB 1374, An Act Concerning Electricity Procurement and Energy Efficiency, favorably reported by the Energy and Technology Committee, has similar standard service power procurement provisions.
COMMITTEE ACTION
Energy and Technology Committee
Joint Favorable Substitute
Yea |
17 |
Nay |
4 |
(03/13/2007) |
1 The bonds will be defeased because they are not callable.