Connecticut Seal

General Assembly

 

Substitute Bill No. 6636

January Session, 2009

 

*_____HB06636ET____031909____*

AN ACT CONCERNING THE CONNECTICUT CLEAN ENERGY FUND.

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

Section 1. Subdivision (2) of subsection (j) of section 16-244c of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(2) Notwithstanding the provisions of subsection (d) of this section regarding an alternative transitional standard offer option or an alternative standard service option, an electric distribution company providing transitional standard offer service, standard service, supplier of last resort service or back-up electric generation service in accordance with this section shall, not later than July 1, [2008] 2011, file with the Department of Public Utility Control for its approval one or more long-term power purchase contracts from Class I renewable energy source projects that receive funding from the Renewable Energy Investment Fund and that are not less than one megawatt in size. [, at a price that is either, at the determination of the project owner, (A) not more than the total of the comparable wholesale market price for generation plus five and one-half cents per kilowatt hour, or (B) fifty per cent of the wholesale market electricity cost at the point at which transmission lines intersect with each other or interface with the distribution system, plus the project cost of fuel indexed to natural gas futures contracts on the New York Mercantile Exchange at the natural gas pipeline interchange located in Vermillion Parish, Louisiana that serves as the delivery point for such futures contracts, plus the fuel delivery charge for transporting fuel to the project, plus five and one-half cents per kilowatt hour.] Contracts entered into on or after August 1, 2009, shall include a requirement that the owner of the Class I renewable energy source project be compensated at a cost-based rate, in cents per kilowatt-hour, that provides the opportunity for the project to earn a reasonable rate of return if the project operates at a sufficient capacity factor. The department shall determine the rates, the capacity factor and other factors prior to the commencement of any contract and the department may adjust such rates, capacity factor and other factors not more than once every five years. The department may establish a five-year review proceeding at its discretion or at the request of the owner of the Class I renewable energy source project. In its approval of such contracts, the department shall give preference to purchase contracts from those projects that would provide a financial benefit to ratepayers or would enhance the reliability of the electric transmission system of the state and the department may approve or disapprove any proposed contract as public interest requires. Such projects shall be located in this state. [The owner of a fuel cell project principally manufactured in this state shall be allocated all available air emissions credits and tax credits attributable to the project and no less than fifty per cent of the energy credits in the Class I renewable energy credits program established in section 16-245a attributable to the project.] On and after October 1, 2007, [and until September 30, 2008,] such contracts shall be comprised of not less than a total, apportioned among each electric distribution company, of one hundred twenty-five megawatts; and on and after [October 1, 2008] July 1, 2011, such contracts shall be comprised of not less than a total, apportioned among each electrical distribution company, of one hundred fifty megawatts. The cost of such contracts and the administrative costs for the procurement of such contracts directly incurred shall be [eligible for inclusion in the adjustment to the transitional standard offer as provided in this section and any subsequent rates for standard service, provided such contracts are] at the department's discretion from time to time, either included in nonbypassable federally mandated congestion charges or in the rates for standard service and any benefits, including, but not limited to, the value of renewable energy credits received through a contract, shall be distributed in the same manner as the costs. A project owner who has signed a contract on or before April 1, 2009, and whose contractual compensation is not indexed to the cost of natural gas fuel may make a single request to the department to adjust its contract due to issues of financeability, provided such a request is made before September 1, 2009, and may include a request that the existing contract be extended to cover the full output of the project. The department, upon receipt of such a request, may open a proceeding to consider whether to adopt any adjustments to such a contract, including, but not limited to, converting it to a cost-based contract that may include a fuel cost adjustment clause, as the department determines is in the public interest. A proceeding opened by the department pursuant to this subdivision shall be conducted as an uncontested proceeding, but the project developer shall present evidence and testimony of a financial expert to the department, at the project developer's expense, as to the necessity of adjusting the contract. The contracts shall be for a period of time sufficient to provide financing for such projects, but not less than ten years, and are for projects which began operation on or after July 1, 2003. [Except as provided in this subdivision, the amount from Class I renewable energy sources contracted under such contracts shall be applied to reduce the applicable Class I renewable energy source portfolio standards. For purposes of this subdivision, the department's determination of the comparable wholesale market price for generation shall be based upon a reasonable estimate.] On or before September 1, 2007, the department, in consultation with the Office of Consumer Counsel and the Renewable Energy Investments Advisory Council, shall study the operation of such renewable energy contracts and report its findings and recommendations to the joint standing committee of the General Assembly having cognizance of matters relating to energy.

Sec. 2. Subsection (e) of section 16-245n of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(e) The Renewable Energy Investments Board shall include not more than fifteen individuals with knowledge and experience in matters related to the purpose and activities of the Renewable Energy Investment Fund. The board shall consist of the following members: (1) One person with expertise regarding renewable energy resources appointed by the speaker of the House of Representatives; (2) one person representing a state or regional organization primarily concerned with environmental protection appointed by the president pro tempore of the Senate; (3) one person with experience in business or commercial investments appointed by the majority leader of the House of Representatives; (4) one person representing a state or regional organization primarily concerned with environmental protection appointed by the majority leader of the Senate; (5) one person with experience in business or commercial investments appointed by the minority leader of the House of Representatives; (6) the Commissioner of Emergency Management and Homeland Security or the commissioner's designee; (7) one person with expertise regarding renewable energy resources appointed by the Governor; (8) two persons with experience in business or commercial investments appointed by the board of directors of Connecticut Innovations, Incorporated; (9) a representative of a state-wide business association, manufacturing association or chamber of commerce appointed by the minority leader of the Senate; (10) the Consumer Counsel or the Consumer Counsel's designee; (11) the Secretary of the Office of Policy and Management or the secretary's designee; (12) the Commissioner of Environmental Protection or the commissioner's designee; (13) a representative of organized labor appointed by the Governor; and (14) a representative of residential customers or low-income customers appointed by Governor. On a biennial basis, the board shall elect a chairperson and vice-chairperson from among its members and shall adopt such bylaws and procedures it deems necessary to carry out its functions. The board may establish committees and subcommittees as necessary to conduct its business.

This act shall take effect as follows and shall amend the following sections:

Section 1

from passage

16-244c(j)(2)

Sec. 2

from passage

16-245n(e)

Statement of Legislative Commissioners:

In section 1, "Class I renewable energy project" was changed to " Class I renewable energy source project" and "accept or reject" was changed to "approve or disapprove", for statutory consistency.

ET

Joint Favorable Subst.-LCO