Connecticut Seal

General Assembly

 

Raised Bill No. 1078

January Session, 2015

 

LCO No. 4790

 

*04790_______ET_*

Referred to Committee on ENERGY AND TECHNOLOGY

 

Introduced by:

 

(ET)

 

AN ACT CONCERNING AFFORDABLE AND RELIABLE ENERGY.

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

Section 1. (NEW) (Effective July 1, 2015) The Department of Energy and Environmental Protection shall, on or before November 1, 2015, identify those measures that can reduce generation service charges and be implemented, in whole or in part, on or after January 1, 2016. Such measures may include, but shall not be limited to, demand response programs, other distributed resources, and contracts between an electric distribution company, as defined in section 16-1 of the general statutes, and an owner of generation resources for the capacity, electric energy or both of such resources. The department shall order each electric distribution company to implement, in whole or in part, on or before January 1, 2016, such measures as the department considers appropriate. Any such measures shall be subject to review and approval, pursuant to section 16-19 of the general statutes, by the Public Utilities Regulatory Authority. The department shall submit a report, in accordance with the provisions of section 11-4a of the general statutes, regarding such measures to the joint standing committee of the General Assembly having cognizance of matters relating to energy and technology. Not later than sixty calendar days after receipt of the department's report, such committee shall advise the department of their approval or modifications, if any, of the measures proposed. The company's costs associated with complying with the provisions of this section shall be recoverable through federally mandated congestion charges.

Sec. 2. Subsection (b) of section 16-243a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2015):

(b) Each electric public service company, municipal electric energy cooperative and municipal electric utility shall: (1) Purchase any electrical energy and capacity made available, directly by a private power producer or indirectly under subdivision (4) of this subsection; (2) sell backup electricity to any private power producer in its service territory; (3) make such interconnections in accordance with the regulations adopted pursuant to subsection (h) of this section necessary to accomplish such purchases and sales; (4) upon approval by the Public Utilities Regulatory Authority of an application filed by a willing private power producer, transmit energy or capacity from the private power producer to any other such company, cooperative or utility or to another facility operated by the private power producer; [and] (5) offer to operate in parallel with a private power producer; and (6) offer time of use rates to a private power producer in its interconnection agreement. In making a decision on an application filed under subdivision (4) of this subsection, the authority shall consider whether such transmission would (A) adversely impact the customers of the company, cooperative or utility which would transmit energy or capacity to the private power producer, (B) result in an uncompensated loss for, or unduly burden, such company, cooperative, utility or private power producer, (C) impair the reliability of service of such company, cooperative or utility, or (D) impair the ability of the company, cooperative or utility to provide adequate service to its customers. The authority shall issue a decision on such an application not later than one hundred twenty days after the application is filed, provided, the authority may, before the end of such period and upon notifying all parties and intervenors to the proceeding, extend the period by thirty days. If the authority does not issue a decision within one hundred twenty days after receiving such an application, or within one hundred fifty days if the authority extends the period in accordance with the provisions of this subsection, the application shall be deemed to have been approved. The requirements under subdivisions (3), (4) and (5) of this subsection shall be subject to reasonable standards for operating safety and reliability and the nondiscriminatory assessment of costs against private power producers, approved by the Public Utilities Regulatory Authority with respect to electric public service companies or determined by municipal electric energy cooperatives and municipal electric utilities.

Sec. 3. Subsections (a) and (b) of section 16a-3b of the general statutes are repealed and the following is substituted in lieu thereof (Effective July 1, 2015):

(a) The [Public Utilities Regulatory Authority] Department of Energy and Environmental Protection shall oversee the implementation of the Integrated Resources Plan and the Procurement Plan. The electric distribution companies shall implement the demand-side measures, including, but not limited to, energy efficiency, load management, demand response, combined heat and power facilities, distributed generation and other emerging energy technologies, specified in the Integrated Resources Plan and included in the comprehensive Conservation and Load Management Plan approved by the Energy Conservation Management Board and the Commissioner of Energy and Environmental Protection. The electric distribution companies shall submit proposals to appropriate regulatory agencies to address transmission and distribution upgrades as specified in the Integrated Resources Plan.

(b) [When the Integrated Resources Plan contains an option to procure new sources of generation, the authority] The department shall develop and issue a request for proposals [,] as needed to meet the goals established in the Integrated Resources Plan, including, but not limited to, meeting electric energy or capacity needs, meeting the renewable portfolio standards, improving energy system reliability, lowering energy costs and reducing greenhouse gas emissions. Proposals selected by the department shall be subject to approval by the Public Utilities Regulatory Authority. The department shall submit a report, in accordance with the provisions of section 11-4a, regarding such proposals to the joint standing committee of the General Assembly having cognizance of matters relating to energy and technology. Not later than sixty calendar days after receipt of the department's report, such committee shall hold a public hearing regarding such proposals. Not later than thirty calendar days after the public hearing, such committee shall advise the department of their approval or modifications, if any, of the proposals selected. The department shall publish such request for proposals in one or more newspapers or periodicals, as selected by the [authority] department, and shall post such request for proposals on its Internet web site. In considering any generation proposals submitted pursuant to such request, the [authority] department shall give preference to proposals for generation without any financial assistance, including, but not limited to, long-term contract financing or ratepayer guarantees. Pursuant to a nondisclosure agreement, the [authority] department shall make available to the [Commissioner of Energy and Environmental Protection] authority, the Office of Consumer Counsel and the Attorney General all confidential bid information it receives pursuant to this subsection, provided the bids and any analysis of such bids shall not be subject to disclosure under the Freedom of Information Act. Three months after the [authority] department issues a final decision, it shall make available all financial bid information, provided such information regarding the bidders not selected be presented in a manner that conceals the identities of such bidders.

(1) On and after July 1, 2008, an electric distribution company may submit proposals in response to a request for proposals on the same basis as other respondents to the solicitation. A proposal submitted by an electric distribution company shall include its full projected costs such that any project costs recovered from or defrayed by ratepayers are included in the projected costs. An electric distribution company submitting any such bid shall demonstrate to the satisfaction of the [authority] department and the joint standing committee of the General Assembly having cognizance of matters relating to energy and technology that its bid is not supported in any form of cross subsidization by affiliated entities. If the [authority] department approves such electric distribution company's proposal, the costs and revenues of such proposal shall not be included in calculating such company's [earning] earnings for purposes of, or in determining whether its rates are just and reasonable under, sections 16-19, 16-19a and 16-19e. An electric distribution company shall not recover more than the full costs identified in any approved proposal. Affiliates of the electric distribution company may submit proposals pursuant to section 16-244h, regulations adopted pursuant to section 16-244h and other requirements the [authority] department may impose.

(2) If the [authority] department selects a nonelectric distribution company proposal, an electric distribution company shall, within thirty days of the selection of a proposal by the [authority] department, negotiate in good faith the final terms of a contract with a generating facility and shall apply to the authority for approval of such contract. Upon authority approval, the electric distribution company shall enter into such contract.

(3) The authority shall determine the appropriate manner of cost recovery for proposals selected pursuant to this section.

(4) The [authority] department may retain the services of a third-party entity with expertise in the area of energy procurement to oversee the development of the request for proposals and to assist the [authority] department in its approval of proposals pursuant to this section. [The reasonable and proper expenses for retaining such third-party entity shall be recoverable through the generation services charge.] All reasonable expenses associated with the department retaining such third-party entity shall be recoverable through the assessment in section 16-49.

Sec. 4. (NEW) (Effective July 1, 2015) (a) The Commissioner of Energy and Environmental Protection, in consultation with the procurement manager identified in subsection (l) of section 16-2 of the general statutes, the Office of Consumer Counsel, the Attorney General and the joint standing committee of the General Assembly having cognizance of matters relating to energy and technology may, in coordination with other states in the region of the regional independent system operator, as defined in section 16-1 of the general statutes, or on the commissioner's own, solicit proposals for long-term contracts, in one solicitation or multiple solicitations, from providers of (1) natural gas pipeline capacity constructed on or after January 1, 2016, (2) liquefied natural gas, (3) Class I renewable energy sources, as defined in section 16-1 of the general statutes, (4) passive and active demand response resources, including, but not limited to, load management and efficiency measures, or (5) distributed generation, including, but not limited to, combined heat and power.

(b) The Commissioner of Energy and Environmental Protection shall evaluate the following factors when reviewing proposals pursuant to subsection (a) of this section, including, but not limited to, (1) economic benefits to the state, (2) fuel diversity, (3) whether benefits of the proposal outweigh the costs of the proposal, (4) the delivered price of such sources, (5) whether the proposal is consistent with the requirements to reduce greenhouse gas emissions in accordance with section 22a-200a of the general statutes, and (6) whether the proposal is aligned with the policy goals outlined in the Comprehensive Energy Strategy, pursuant to section 16a-3d of the general statutes, including, but not limited to, environmental impacts.

(c) If the commissioner finds proposals pursuant to subsection (a) of this section to be in the best interests of ratepayers, the commissioner may select proposals from generating facilities or demand response resources to meet up to the state's proportional share of the regional energy load of natural gas capacity.

(d) Any agreement reached by the commissioner and a generating facility owner or demand response resource owner shall be subject to review and approval by the Public Utilities Regulatory Authority. The Commissioner of Energy and Environmental Protection may file an application with the authority for the review and approval of the agreement. The authority shall issue a decision not later than sixty days after such filing. If the authority does not issue a decision within sixty days after receiving said application, or within ninety days if the Commissioner of Energy and Environmental Protection consents, the application shall be deemed approved. The net costs of any such agreement shall be recovered through a fully reconciling component of electric rates for all customers of electric distribution companies. Such costs shall include reasonable costs incurred by electric distribution companies pursuant to this section.

Sec. 5. (NEW) (Effective July 1, 2015) In any rate application filed with the Public Utilities Regulatory Authority on or after July 1, 2015, by any electric distribution company, the electric distribution company may seek cost recovery for the costs of purchasing new natural gas capacity either through procuring contracts for new pipeline capacity or otherwise, as directed by the Commissioner of Energy and Environmental Protection pursuant to section 4 of this act.

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

Section 1

July 1, 2015

New section

Sec. 2

July 1, 2015

16-243a(b)

Sec. 3

July 1, 2015

16a-3b(a) and (b)

Sec. 4

July 1, 2015

New section

Sec. 5

July 1, 2015

New section

Statement of Purpose:

To provide Connecticut with regulatory tools to procure affordable and reliable electricity.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is ne, it is not underlined.]