OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

SB-570

AN ACT CONCERNING ELECTRIC FIXED BILL FEES AND GRID MODERNIZATION.

AMENDMENT

LCO No.: 9226

File Copy No.: 611

Senate Calendar No.: 343


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

Note: All Funds=All Funds

Municipal Impact:

Municipalities

Effect

FY 16 $

FY 17 $

All Municipalities

Potential Cost

See Below

See Below

Explanation

The amendment strikes the underlying bill and its associated fiscal impact.

Section 1 requires the Public Utilities Regulatory Authority (PURA) to adjust electric distribution companies' (EDC) residential fixed charge to only recover the fixed costs and operation and maintenance expenses directly related to metering, billing, service connections and the provision of customer service. This has no impact to the state or municipalities as ratepayers.

Sections 2, 3 and 4 require each EDC to submit a proposal to the Department of Energy and Environmental Protection (DEEP) to build, own or operate grid-side enhancements such as energy storage systems. The amendment 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 expected to have a fiscal impact as DEEP, the Office of Consumer Counsel (OCC) and PURA all have the staff and expertise to solicit the proposals and review them.

The net ratepayer impact for the state and municipalities in depends on the potential savings from load management and energy storage systems, and the cost the state and municipalities pay to electric companies to recover the costs of the new infrastructure.

Section 5 requires DEEP to initiate an uncontested proceeding to determine the value of customer-side Class I and Class III energy sources and make recommendations regarding any changes to ratemaking mechanisms supporting Class I or Class III energy sources. There is no fiscal impact to DEEP.

Section 6 allows DEEP to direct EDCs to submit active demand response resources that can reduce generation service charges or other electric service charges through one or more tariffs. The section results in no fiscal impact to DEEP.

Section 7 requires PURA to issue registration numbers to electric generating facilities that are Class I renewable energy sources and derive electricity from solar power, wind power, or a fuel cell. The section also requires owners of any electric generating facility to register with PURA and sign a sworn statement that they complied with the Class I registration requirements. There is no fiscal impact to PURA.

Section 8 expands the purposes for which loans from DEEP's Microgrid Grant and Loan Pilot Program can be used. The amendment allows the program to provide low interest loans for a microgrid's new generation and energy storage. Any new generation financed through the program must be a Class I renewable energy source, certain CHP and waste heat recovery systems, or a gas microturbine. The expanded purpose of the grants and loans program would only have the potential to change what projects receive funding and would not have a fiscal impact on DEEP.

Sections 9 and 11 allows agricultural customers to lease or enter into long-term contracts for an agricultural virtual net metering facility and requires agricultural customers who aggregate electric meters to be located on the same parcel or property of one of the virtual net metering facility. The two sections have no fiscal impact.

Sections 10 and 17 allow municipalities to: (1) abate up to 100% of the property taxes due for any public service company infrastructure installed or improved in the previous year; and (2) abate up to 100% of property taxes due for personal property owned by a gas company for up to 25 years.

A municipality that chooses to do this would experience a revenue loss that would vary based on the amount of taxes owed on such property and the amount of such taxes the municipality chose to abate.

Section 12 requires the Low-Income Energy Advisory Board to recommend, by January 1, 2016: (1) how DEEP, the Department of Social Services (DSS), community action agencies, EDCs and municipal electric utilities can securely share heating assistance program applicant data to improve coordination; (2) the costs and benefits of current energy assistance programs and how to maximize customer benefits; (3) how to streamline the application process; (4) how to make energy assistance more accessible and feasible for rental tenants; and (5) coordination efforts to best improve boiler and furnace replacement programs. There is no fiscal impact to DEEP.

Section 13 makes technical changes that do not result in a fiscal impact.

Sections 14, 15 and 16 require DEEP to administer a federally appropriated weatherization assistance program and represent the state's energy policy interest before any appropriate federal agency. There is no fiscal impact to DEEP.

Sections 18 and 19 require PURA to implement electric vehicle time of day rates for residential customers of electric public service companies. There is no fiscal impact to PURA.

Section 20 requires each EDC to integrate electric vehicle charging load projections into each company's distribution planning. There is no fiscal impact to the state.

Section 21 requires the Integrated Resources Plan to analyze the potential for electric vehicles and ensure the electric grid is prepared to support increased electric vehicle charging. The section has no fiscal impact to DEEP.

Section 22 requires PURA to develop recommendations to what change the generation services rate and to the terms and conditions of such service that customers may experience after the expiration of a fixed contract, when customers begin paying month-to-month. There is no fiscal impact to PURA.

Section 23 requires DEEP to administer pilot test programs at state agencies to promote energy conservation. DEEP currently conducts such a program, therefore there is no fiscal impact to DEEP.

Section 24 allows a deposit, required to cover the payment for gas or electricity for three months, to be made by cash, letter of credit or surety bond. The section also allows each member municipal electric utility of a municipal electric energy cooperative to return 50% of the deposit if such customer's account remains in good standing for two years. There is a potential cost to municipal electric companies associated with returning a portion of these deposits to non-residential customers. It is anticipated that this cost would result in higher electric rates for both residential and non-residential customers.

The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely for the purposes of information, summarization and explanation and does not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.