OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

sSB-1078

AN ACT CONCERNING AFFORDABLE AND RELIABLE ENERGY.


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 16 $

FY 17 $

Statewide (includes various state agencies)

All Funds - Potential Cost

See Below

See Below

Department of Energy and Environmental Protection

GF - Cost

Minimal

Minimal

Note: All Funds=All Funds; GF=General Fund

Municipal Impact:

Municipalities

Effect

FY 16 $

FY 17 $

All Municipalities

Potential Cost

See Below

See Below

Explanation

The bill allows electric companies to recover the costs of purchasing new natural gas capacity through a rate proceeding. Costs may be incurred in FY 16 and FY 17 for the state and municipalities as ratepayers.

The bill transfers the requirement to issue request for proposals related to the Integrated Resource Plan (IRP), from the Public Utilities Regulatory Authority (PURA) to the Department of Energy and Environmental Protection (DEEP), and broadens the circumstances under which such a request is issued. It adds reporting and public hearing requirements, and changes how costs related to third-party entities are recovered. This will result in a minimal cost to DEEP to hold the additional public hearings.

The bill also allows the DEEP commissioner, in consultation with the procurement manager, the Office of Consumer Council (OCC) and the attorney general, to solicit proposals for long term contracts with generating facilities or conservation programs. The bill subjects any resulting agreement to PURA's review and approval.

The bill requires the net costs of any such agreement to be recovered through a component of electric rates for all electric customers. Costs may be incurred in FY 16 and FY 17 for the state and municipalities as ratepayers. The process is not expect to have a fiscal impact as DEEP, OCC and PURA all have the staff and expertise to solicit the proposals and review them.

The Out Years

The net ratepayer impact for the state and municipalities in the out years depends on the potential savings from increased natural gas supply and the cost the state and municipalities pay to electric companies to recover the costs of the new infrastructure.