OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http://www.cga.ct.gov/ofa

sSB-1138

AN ACT CONCERNING CONNECTICUT'S CLEAN ENERGY GOALS.

As Amended by Senate "A" (LCO 6204), Senate "C" (LCO 6377), House "A" (LCO 7891)

House Calendar No.: 469

Senate Calendar No.: 141


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 14 $

FY 15 $

All

Various - Savings

See Below

See Below

Municipal Impact:

Municipalities

Effect

FY 14 $

FY 15 $

All Municipalities

Savings

See Below

See Below

Explanation

The bill modifies the renewable portfolio standard (RPS) that electric utilities and suppliers must achieve. These modifications include expanded types of hydropower and biogas resources that count as Class I resources as well as create a new class that includes certain large-scale hydropower resources. It is anticipated that expanding the resources that count as a Class I resource and creating a new class would result in a savings to ratepayers, including the state and municipalities.

The bill also allows the commissioner of the Department of Energy and Environmental Protection (DEEP) to solicit proposals and enter into long-term agreements with certain renewable energy source providers for energy, capacity, and environmental attributes. These agreements are subject to the Public Utility Review Authority (PURA) review and approval which includes a public hearing. It is anticipated that this will result in a short term savings to the state as it is expected that the rates would be less than the current market value. The costs associated with a PURA review and public hearings are anticipated to be minimal. These costs are required to be recovered through a reconciling component on electric rates, including the state and municipalities.

The bill also changes how certain compliance payments and civil penalties are handled.1 Under current law, these payments are used for the development of Class I renewable energy sources. The bill requires these payments to be used to offset ratepayer's costs for certain contracts prior to being used for the development of Class I renewable energy sources. This provision will result in reduced costs to ratepayers, including the state and municipalities.

Senate “A” modifies when small scale hydropower count as a Class I resource, allows large scale hydropower to count towards the RPS only under specified circumstances, and allows alternative compliance payment revenues to be used to reduce electric rates. These provisions have a minimal fiscal impact.

Senate “C” requires PURA to hold public hearings when reviewing the long-term agreements entered into by DEEP and requires the review to be completed within 60 days after the agreement is filed with PURA. Senate “C” has a minimal fiscal.

House “A” strikes the underlying bill as amended and its associated fiscal impact, thus becoming the bill. The House “A” fiscal impact is described above.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

1 To-date in FY 13, the Clean Energy Fund has received $215,000 in compliance payments for 2009 noncompliance of electric companies and $2,000 in civil penalties from competitive suppliers.