Energy and Technology Committee
JOINT FAVORABLE REPORT
AN ACT CONCERNING SHARED CLEAN ENERGY FACILITIES.
Joint Favorable Substitute
SPONSORS OF BILL:
Energy and Technology Committee
Representative Kim Rose, 118th Dist.
REASONS FOR BILL:
The purpose of this bill is to allow for the shared use of solar clean energy facilities, defined as a Class I renewable energy source with a nameplate capacity rating of four megawatts or less with at least two subscribers.
The substitute language becomes the bill and directs the Department of Energy and Environmental Protection to establish a three-year pilot program to support the development of shared clean energy facilities. On or before January 1, 2019, DEEP shall file a report analyzing the success of the pilot program and shared clean energy programs in other states, and recommending whether a permanent program should be established in Connecticut.
Due to the nature of the substitute language, testimony submitted in support of the bill as originally drafted may now be in opposition, and testimony submitted in opposition to the bill as originally drafted advocating may now be in support.
RESPONSE FROM ADMINISTRATION/AGENCY:
Elin Swanson Katz
On behalf of the Office of Consumer Counsel
The optimal approach to larger scale renewable development is to determine a mix of resources that meets our clean energy and reliability goals with the most cost-effective resources for Connecticut ratepayers. From a cost perspective, while the residential rooftop solar program as proposed would cost approximately 23-30 cents per kWh, grid-side solar could cost approximately half that amount, and out of state wind could cost a third of that amount.
There are technical, cost and consumer protection issues that need to be investigated thoroughly before a large-scale program should be rolled out. The OCC supports a pilot program for shared solar, with a DEEP process to determine the appropriate incentive, in order to provide local experience and data to help instruct further development.
Lynn Stoddard, Director
On behalf of the Institute for Sustainable Energy at Eastern Connecticut State University
In order to build on Connecticut's progress in growing the residential solar power market, we must enable access to renewable energy to a broader range of Connecticut's residents, specifically renters and other residents whose homes are not appropriate sites for solar power. As many as 80% of Connecticut residents interested in the traditional residential solar program may have homes that are not suitable for solar. A shared clean energy program will enable this large group of residents to enjoy the many financial and environmental benefits of clean, renewable energy and for the state to reap the benefits of economic development and job creation.
Richard H. Strauss
On behalf of Connecticut Academy of Science and Engineering (CASE)
CASE recently completed a study on behalf of the Energy and Technology Committee and a briefing for the committee on March 3, 2015. They submitted a comparison of the bill as originally drafted with the CASE report.
NATURE AND SOURCES OF SUPPORT:
Mayor Bill Finch
On behalf of the City of Bridgeport
The bill would allow many of Bridgeport's residents who are not otherwise able to install renewable energy of their own, such as renters, condo-owners, businesses and homeowners whose single-family homes are ill-suited for effective solar installation, to invest and participate in shared clean energy facilities and receive credit on their utility bill for their portion of the energy produced. In doing so, their investment would act as an economic catalyst for clean energy producers and allow Bridgeport to meet its renewable energy goals by promoting further clean energy use. The result would be more green jobs and cleaner air.
William E. Dornbos
On behalf of Acadia Center
Shared clean energy facilities will be an important feature of a modern, sustainable grid. They offer the exciting promise of community-focused clean power. If they are placed within a grid modernization policy framework, and are properly designed and implemented, shared clean energy facilities could help cut energy costs for our residents and businesses, optimize our grid investments to the benefit of all grid participants, and improve the grid's reliability and resilience through their distributed nature. Shared cleaned energy facilities also have the potential to spread the economic benefit of clean energy more widely.
They recommend that the bill be modified to ensure that all residents, regardless of their income level, have fair access to the benefits of shared clean energy facilities. They also recommend that the definition of an eligible subscriber in the bill be modified to place a geographic proximity on its scope.
Clean Energy Collective, Clean Water Action, Community Energy, Connecticut Fund for the Environment, Connecticut Citizen Action Group, ConnPIRG, Environment Connecticut, Greenskies Renewable Energy, NRG Home Solar, Inc., Operation Fuel, Inc., Renewable Energy and Efficiency Business Association, Sierra Club – Connecticut Chapter, Vote Solar, Town of North Branford Office of Social Services, and Windham Area Interfaith Ministry
The bill will expand access to renewable energy to the majority of energy customers, for whom the traditional panels-on-your-roof model simply does not work. A well-designed shared renewables program can help low- and moderate-income families, individuals and business access the benefits of clean energy and the programs that support clean energy. Access to clean energy can help customers stabilize and reduce their energy bills, which is all the more important for low- and moderate-income communities where utility bills make up a larger portion of their expenses. The solar industry has added around 500 jobs in the last year and each new installation leads to investment in the local economy and long term energy savings to local consumers.
Joel M. Rinebold
On behalf of Connecticut Center for Advanced Technology, Inc. (CCAT)
CCAT is supportive of the concepts raised in the bill to develop Class I renewable energy sources, especially combined heat and power technologies such as fuel cells. Large fuel cells for stationary power are the only distributed generation technology principally developed and manufactured in Connecticut, with at least 600 companies that are part of the growing hydrogen and fuel cell industry supply chain in the Northeast region. Requests for proposals the would be issued by DEEP should include technology manufactures in CT, high capacity/availability factor, technology that provides both heat and power for end users, and technology that can be dispatched to support the grid.
On behalf of Eversource Energy
Eversource does not oppose the concept of a limited pilot, remaining concerned with the development of a program with includes rate credits, absent a study of the benefits and cost shifting impacts.
Eversource opposed the bill as originally drafted. The bill as originally drafted requires electric distribution companies to purchase the electricity from the clean energy facility at the marginal price. Eversource believes that the distribution companies should not be required to undertake such a purpose. They are concerned that the bill will shift costs to non-participating customers.
On behalf of UIL Holdings Corporation
A pilot program will ensure that program costs are controlled, allow time for a proceeding to determine the true value of solar, and allow the issue of ratepayer fairness to be fully addressed. The bill requires a competitive solicitation for the construction of the shared clean energy facility, which will drive down the cost of the shared clean energy facility.
UIL was opposed to the bill as originally drafted. As the bill was originally drafted, the EDC would be paying the subscribers the full bundled retail cost per kilowatt-hour for the energy from the project, cost-shift from participants to non-participants. They do not support the provision in the bill as originally drafted for subscriber organizations to requires that the credits to the subscribers be handled by the EDC.
On behalf of SolarConnecticut
The bill would involve the construction of commercial solar projects, which will be constructed by businesses that do not install residential systems, filling more jobs on top of the job growth that the residential solar market would experience. Officials in Minnesota opened a solicitation for new shared solar projects. They expected 100 MWs to be proposed and received proposals for more than four times that amount. SolarConnecticut urges the Committee to include language for the completion of a Value-of-Solar study.
Barbara Sterling Backman
On behalf of People's Action for Clean Energy (PACE)
Shared clean energy facilities will allow more people to be a part of the clean energy movement, encourage the small business and private investment clean energy economy, and make clean energy more affordable.
On behalf of Quantum Biopower, LLC
The bill creates a mechanism for anaerobic digestion projects to share the benefit of renewable energy produced with organic waste generating partners that supply the fuel to Quantum's 1MW anaerobic digester facility in Southington, CT. The bill will allow them to work with area food waste generators to subscribe to receive the benefit of shared clean energy facility credits derived from the decomposition of their waste.
On behalf of Fight the Hike
Although all ratepayers are charged to add to the funds for promoting clean energy projects, only a fraction of residences can take advantage of the technology and programs. Ten states have developed a shared renewable policy. In New England, we should be following the path of Massachusetts, Vermont, New Hampshire and Maine. The advantage of shared renewable facilities has been established in other parts of the country. Especially in the inner-cities, we are already living with an overload of pollutants, asthma and automobile exhaust. Shared clean energy facilities would allow city-dwelling low-wage earners to have access to clean energy and take advantage of the programs just as well-off people can. Since everyone pays into the funds to help subsidize the programs it is right that everyone should be able to reap the benefits.
Bernard J. Zahren and Jigar Shah
On behalf of Zahren Financial Co., LLC and Clean Feet Investors I, LLC
Connecticut could benefit from new jobs, large capital investment, community shared benefits and an improved electric grid architecture as a result of this legislation. The 30% Federal Tax Credits for renewable energy projects will expire by 12/31/16, which can be the swing factor in a decision to build or not build a solar PV project with private capital. The ZREC bid prices for Connecticut Class 1 projects have been falling in each year of the bid allocation process and are expected to continue to decline. The grid infrastructure is at risk from increased disruption from severe weather events, greatly influenced by global climate change. Distributed generation is essential to allow local priorities of the grid to operate independently of the system-wide transmission and distribution system.
The bill will help ease the burden of high electricity rates and be a win for the environment.
Noreen P. Cullen
The bill is exactly what the state needs to wean ourselves off highly destructive nuclear and fossil fuels.
Middlefield, CT has a potential project for a solar array that would be owned by a common council of people or business using net metering.
The bill would allow communities to band together and use common sites to produce solar power for people in locations with small roofs, too much shade, or crowded inner-city neighborhoods. Until recently, the clean energy fund and efficiency funds mostly benefited corporations and well-off people. They were subsidized by all ratepayers, including working and low-income families, who paid the clean energy charge on the electric bill. While most people had virtually no options to receive the benefits of solar, everyone has had to pay the clean energy share.
Bringing shared solar to congested urban centers can help reduce CO2 and other pollutants. It can also help reduce the most costly peak power costs for the state for which we are currently being penalized by a federal tax on our energy and must compensate for by running expensive, polluting, turbine power plants.
Robert A. Maddox, Jr.
The bill would help Connecticut become energy secure. We only produce about 26% of the BTUs we consume, making us highly vulnerable to outside forces that can disrupt our economy. This legislation is about fairness. Only about 25% of buildings in the US can accommodate solar energy. Not allowing every resident in Connecticut the opportunity to receive benefits of distributed energy is wrong and unfair. This legislation is about economic opportunity. Millions of dollars in economic activity is being generated and there is significantly opportunity for much more.
Mr. Rawitscher offered support for the bill.
Mr. Hansen asks to support expanding access to renewable energy, like solar PV, to all Connecticut families and businesses through creation of a shared solar program.
It is an important time to move ahead with expanding the renewable energy in our state, and shared solar must be one of the options.
Mike Haymes, Ph.D.
Dr. Haymes supports subscriber funded clean energy facilities. He questions how construction and management costs would be funded, whether bond underwriters would accept commitments as subscribers as guarantees and whether projected subscriptions cover enough of initial costs to impress them.
People's Action for Clean Energy (PACE) Community Letter
Genuinely green energy sources have always been the right environmental choice. The bill would allow more citizens whose property is not currently well-suited to effective green energy installments, to participate in safe, healthy, forward-thinking and cost-effective systems of energy generation without taking money from our state's budget. The bill is a jobs bill, one that would provide work opportunities within the state, allowing local people to contribute their labor to their neighbors' well-being and to their state's security as they earn an income for their own families.
The following 20 individuals and organizations submitted this testimony from PACE:
Trudy Dujardin – Dujardin Design Associates
Stephen C. Hall – Chandler LLC
Girard and Grace Hayes
Andrew Winston – Winston Eco-Strategies, LLC
Connecticut Chapter of the Sierra Club Community Letter
Connecticut needs more in-state clean energy to meet our renewable energy goals, to reduce greenhouse gas emissions, to prevent air pollution, and to power our economy by creating new jobs. The bill will establish a program to allow homeowners with shaded roofs, renters, condo dwellers and businesses that lease space to participate as subscribers in a solar installation, or other shared clean energy facility, whether it's next door or across town.
They urge the committee to make sure the final language is strong and effective.
The following 378 individuals submitted this testimony from the Connecticut Chapter of the Sierra Club:
Dr. Henry Auer
Margaret P'Hara Best
Warren & Bodil Braren
Dr. David Brothers
John D. Calandrelli
S. Ann Crossley
Mrs. John Di Biase Jr.
Dr. Matthew Egan
Stephanie C. Fox
Dr. John Hay
Diana Emery Hiza
Daniyal N. Khan
Sharron Lee Laplante
Dorothy Lovett Buckley
Dr. Steven Lu
Ann Marie Maconus
Dr. Dominic Marino
Dr. Donald McGregor
Harold Meyer Jr.
Dr. Phyllis Pallett-Hehn
Dr. Jacob Raitt
David Schmidt II
Mary Lou Shirkey-Barrett
Dr. Scott Shuler
Dr. Merton Smith
John Smith Jr.
Sharyn St. Clair
Dr. John Strauss
Dr. Warren Swanson
Dr. Michael Tucker
Dr. William Upholt
Peter Van Ness
Don van Rhyn
Susan & Anthony Vessicchio
Dr. Richard Watson
NATURE AND SOURCES OF OPPOSITION:
On behalf of Greenskies Renewable Energy
DEEP will fall short of its RPS goals by 2019, and the bill would prevent that from happening. He would encourage the committee consider that: No pilot is necessary, 5MW is the right number, and other technical changes to the bill as drafted.
On behalf of The Vote Solar Initiative
There is no need to limit shared clean energy to a pilot program given the comprehensive assessment of the policy recently conducted for the General Assembly by the CT Academy of Science and Engineering that recommends against such a pilot program.
The bill as originally drafted would, for the first time, give all customers access to clean energy. Currently around three quarters of Connecticut's energy customers can't put solar on their property, either because they rent their home or business, or because their property isn't suitable. Shared clean energy can solve that problem.
Shared clean energy is an established framework that is operating successfully in 10 states and a pilot program would be an unnecessary delay. The U.S. Department of Energy and many of the nation's largest banks and investors have already pumped hundreds of millions of dollars into this business model. Shared energy benefits all ratepayers. Sometimes concerns are heard that these programs will raise rates for non-participating ratepayers. The bill includes mechanisms to allow the electric utilities to recover certain costs from the project, cap project size, and adapt to future rate changes.
On behalf of Environment Connecticut
They support the findings of the Connecticut Academy of Science and Engineering's recent report, Shared Clean Energy Facilities, which outlined a suggested policy approach to implementing shared clean energy in Connecticut.
Jeffrey S. Lord
On behalf of Clean Energy Collective (CEC)
CEC understands the desire to learn from an initial round of projects and adjust program rules accordingly, but are confident that this can be accomplished without artificially constraining the market for the next three years. By 2019, Connecticut would have fallen far behind in this competitive transition to clean energy infrastructure.
The bill as originally drafted creates a framework for an effective shared clean energy program that will benefit all involved. The bill is based on the Interstate Renewable Energy Council's Model Rules for Shared Renewable Energy Programs, nationally regarded as best practice. Shared clean energy is working across the country. Ten states, including all of the other New England states, have enacted some form of shared clean energy program.
On behalf of the Connecticut Business & Industry Association (CBIA)
The creation of a system where local generation of energy from Class 1 renewable sources can be shared beyond the owner or operator of the generation unit is worth exploring, but opposes this bill which appears to place virtually all the costs and risks associated with such projects on non-participating ratepayers.
The bill provides that a shared clean energy facility may be built, owned or operated by a third-party entity under contract with a subscriber organization, a newly created, non-descript entity, prohibited from regulation by the bill. Should the shared energy system by undersubscribed, the bill required EDCs purchase the capacity at marginal prices. Thus the subscription risk to the subscriber organization is completely assumed by the EDCs and their ratepayers. The bill provides that EDCs may recover costs associated with administering shared clean energy facilities but does not specify from whom those costs will be recovered.
On behalf of NRG
Connecticut risks losing out if a small-scale pilot program is adopted. Massachusetts and other states have already provided that a full-scale shared renewable program works. Competitive, private-market solutions were keys to success in those states, as were the partnerships between renewables developers and the regulated utilities.
NRG supports the bill as originally drafted. Despite the steadily increasing consumer demand for renewables, only a fraction of Connecticut households currently qualify for rooftop solar. In addition to democratizing clean energy and increasing the number of Connecticut households that would be able to have a solar option by the hundreds of thousands, a strong shared renewables program will help the state meet its environmental goals and create jobs across the state.
On behalf of Connecticut Fund for the Environment (CFE)
Establishing a pilot program would cause unnecessary delay in implementing a shared clean energy facilities program. As CASE stated in Shared Clean Energy Facilities, “the uncertainty created by classifying the new program as a pilot would inhibit project development and investment.
CFE supports the bill as originally drafted. Shared clean energy facilities would expand Connecticut residents' access to clean energy resources and help the state achieve its climate and energy goals. Despite growing interest and commitment to clean energy resources, many Connecticut residents cannot access them. Allowing the operation of shared clean energy facilities would dramatically expand access to clean energy resources, including solar power and other types of distributed generation energy resources, such as fuel cells. They recommend that H.B. 6023, AAC Distributed Generation (ET) be incorporated into the bill to study the value of solar and other clean distributed generation resources.
Joel N. Gordes and David Anderson
A pilot project is a half measure and was soundly rejected by the CASE study committee.
They support the bill as originally drafted. Shared clean energy facilities provide a high degree of equity heretofore missing, particularly those employing photovoltaics (PV). A majority of residents cannot install PV systems on their homes. The shared clean energy facilities allow them to subscribe to the output of a facility and by using virtual net metering to obtain most of the value of PV which assign kWh credit from a well-positioned site. Utilities continue to promote the myth the renewable energy is heavily subsidized by cost-shifting to other ratepayers. Net metering payments are not subsidies, they are compensation for energy generated and other value streams provided by PV system owners through net metering laws. Shared facilities may be employed for low-income populations. One vision is that groups like Operation Fuel, which already aids people to pay electric bills and AARP could use contributions to buy or invest in shared clean energy facilities or benefit from crowdfunding to do so.
On behalf of the Connecticut Chapter of the Sierra Club
A pilot program is an unnecessary and ill-advised delay which serves no purpose. Shared solar programs already operate in over 10 states. The sooner the program becomes operational here, the sooner shaded homeowners, apartment and condo dwellers, and business in rented spaces can participate in renewable energy.
They support the bill as originally dragged and recommend the CASE report issued March 5 to the Committee. It calls for creating a program immediately, with an interim funding structure.
Reported by: Ben Shaiken
Date: March 30, 2015