OLR Bill Analysis

sHB 5427 (as amended by House "A")*

AN ACT CONCERNING THE SHARED CLEAN ENERGY FACILITY PILOT PROGRAM.

SUMMARY:

This bill establishes a financing mechanism for, and makes other changes to, the shared clean energy pilot program. It requires the program to be financed by one or more tariff mechanisms (rate schedules) approved by the Public Utilities Regulatory Authority (PURA) for the state's electric distribution companies (EDCs, i.e., Eversource and United Illuminating). It allows the EDCs to (1) purchase power from facilities in the program, (2) issue billing credits to the facilities' subscribers, and (3) recover their costs for implementing the program. It also extends certain deadlines for the program and specifies that the Department of Energy and Environmental Protection (DEEP) must consider all proposals for the program, including cost-effective projects of various sizes that may allow for multiple projects in each EDC's service area.

In general, a “shared clean energy facility” in the program is a clean energy-powered electricity generating facility to which customers subscribe for a (1) percentage interest in the total amount of electricity produced or (2) set amount of electricity produced (e.g., a “community solar” facility). The subscriber's share of the electricity produced is used to offset the subscriber's electric costs at another billing meter identified by the subscriber.

*House Amendment “A” (1) specifies that DEEP must consider all proposals for the program and determine the program's billing credits and consumer protections and (2) requires the EDCs to submit proposals for their tariffs and cost recovery for PURA's approval.

EFFECTIVE DATE: Upon passage

SHARED CLEAN ENERGY FACILITY PILOT PROGRAM

PA 15-113 required DEEP, to establish a two-year pilot program to support the development of shared clean energy facilities. Among other things, it required DEEP to (1) develop and issue a request for proposals (RFP) to develop shared clean energy facilities and (2) establish a billing credit and certain consumer protections for the facilities' subscribers.

The bill extends the deadline for DEEP to issue the RFP from January 1, 2016 to July 1, 2016 and requires the department to seek public comment on the RFP. It specifies that DEEP must establish the billing credits and consumer protections after it receives the proposals and requires it to consider all proposals it receives, including those for cost-effective projects of various nameplate (i.e., generating) capacities that may allow for the construction of multiple projects in each service area. It also allows the billing credits to be issued through the EDCs' monthly billing systems and extends the deadline for DEEP to report on the program to the Energy Committee from January 1, 2018 to July 1, 2018.

Program Financing

The bill requires the program to be financed using one or more tariff mechanisms with the EDCs, subject to approval by PURA, to (1) pay for EDC purchases of energy products produced by a facility that DEEP identifies in the RFP or (2) deliver a facility's billing credits to its subscribers. The tariffs' terms cannot exceed 20 years and must be consistent with the program requirements DEEP establishes in the RFP. The EDCs must submit the following to PURA for its review and approval:

1. proposed tariffs with any shared clean energy facility projects selected in DEEP's RFP,

2. proposed tariffs with a shared clean energy facility project's subscribers,

3. other proposed tariffs under the program, and

4. proposals to recover costs associated with administering the program's implementation and operation.

The bill entitles the EDCs to recover the reasonable costs and expenses they prudently incur implementing and operating the program through a reconciling (adjustable) electric rate component, as determined by PURA. The EDCs can recover their costs and expenses for the pilot program's term or while any facility is enrolled in the tariff, whichever is longer.

COMMITTEE ACTION

Energy and Technology Committee

Joint Favorable Substitute

Yea

24

Nay

0

(03/17/2016)