Connecticut Seal

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House of Representatives

File No. 722

General Assembly

 

February Session, 2016

(Reprint of File No. 463)

Substitute House Bill No. 5427

 

As Amended by House Amendment

Schedule "A"

Approved by the Legislative Commissioner

April 25, 2016

AN ACT CONCERNING THE SHARED CLEAN ENERGY FACILITY PILOT PROGRAM.

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

Section 1. Subsection (a) of section 16-243p of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) An electric distribution company may recover its costs and investments that have been prudently incurred as well as its revenues lost resulting from the provisions of sections 16-1, 16-19ff, 16-50k, 16-50x, 16-243h to 16-243q, inclusive, 16-244c, 16-244u, 16-245d, 16-245m, 16-245n, 16-245z, 16-262i, 16a-40l and 16a-40m, public act 15-113, as amended by this act, and section 21 of public act 05-1 of the June special session. The Public Utilities Regulatory Authority shall, after a hearing held pursuant to the provisions of chapter 54, determine the appropriate mechanism to obtain such recovery in a timely manner which mechanism may be one or more of the following: (1) Approval of rates as provided in sections 16-19 and 16-19e; (2) the energy adjustment clause as provided in section 16-19b; or (3) the federally mandated congestion charges, as defined in section 16-1.

Sec. 2. Section 1 of public act 15-113 is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) As used in this section:

(1) "Shared clean energy facility" means a Class I renewable energy source, as defined in section 16-1 of the general statutes, that (A) is served by an electric distribution company, as defined in section 16-1 of the general statutes, (B) is within the same electric distribution company service territory as the individual billing meters for subscriptions, (C) has a nameplate capacity rating of four megawatts or less, and (D) has at least two subscribers;

(2) "Individual billing meter" means an individual electric meter or a set of electric meters, when such meters are combined for billing purposes, within the service territory of the subscriber's electric distribution company;

(3) "Electric distribution company" has the same meaning as provided in section 16-1 of the general statutes;

(4) "Subscriber" means an in-state retail end user of an electric distribution company who (A) has contracted for a subscription, and (B) has identified an individual billing meter to which the subscription shall be attributed;

(5) "Subscriber organization" means any for-profit or not-for-profit entity permitted by Connecticut law that (A) owns or operates one or more shared clean energy facilities for the benefit of the subscribers, or (B) contracts with a third-party entity to build, own or operate one or more shared clean energy facilities; and

(6) "Subscription" means a beneficial use of a shared clean energy facility, including, but not limited to, a percentage interest in the total amount of electricity produced by such facility or a set amount of electricity produced by such facility.

(b) The Department of Energy and Environmental Protection, in consultation with the electric distribution companies, shall establish a two-year pilot program to support the development of shared clean energy facilities. On or before [January] July 1, 2016, the department shall develop, seek public comment on and issue a request for proposals from subscriber organizations seeking to develop a shared clean energy facility.

(c) The department shall select, pursuant to the request for proposals process, shared clean energy facility projects as follows: (1) In the service area of an electric distribution company that has a service area of not more than seventeen cities and towns, a project or projects that do not exceed a nameplate capacity rating of two megawatts in the aggregate; and (2) in the service area of an electric distribution company that has a service area of eighteen or more cities and towns, a project or projects that do not exceed a nameplate capacity rating of four megawatts in the aggregate. All projects selected by the department shall not exceed a total nameplate capacity rating of six megawatts in the aggregate. The department shall [establish a] consider all proposals received, including cost-effective projects of various nameplate capacities that may allow for the construction of multiple projects in each service area within the requirements of this subsection. After receiving proposals pursuant to such issued request for proposals, the department shall determine the billing credit for any subscriber of a shared clean energy facility [,] that may be issued through the electric distribution companies' monthly billing systems, and establish consumer protections for subscribers and potential subscribers of such a facility, including, but not limited to, disclosures to be made when selling or reselling a subscription.

(d) The financing of the pilot program, described in subsection (b) of this section, shall be provided as follows: (1) Such pilot program shall utilize one or more tariff mechanisms with the electric distribution companies for a term not to exceed twenty years, subject to approval by the Public Utilities Regulatory Authority, to pay for the purchase of any energy products produced by any shared clean energy facility identified by the department in the request for proposals, or to deliver any billing credit of any such selected facility, as authorized pursuant to subsection (c) of this section; (2) the terms of such tariff shall be consistent with the program requirements established by the department in the request for proposals; (3) the electric distribution companies shall be entitled to recover all reasonable costs and expenses prudently incurred for the implementation and operation of such pilot program through a reconciling component of electric rates, as determined by the authority; (4) the electric distribution companies shall be entitled to such recovery for the period that any shared clean energy facility is enrolled in the tariff, or the term of the pilot program, whichever is longer; and (5) the electric distribution companies shall submit to the Public Utilities Regulatory Authority for review and approval: (A) Any tariffs proposed pursuant to this subsection with shared clean energy facility projects selected in the department's request for proposal process; (B) any tariffs proposed pursuant to this subsection with shared clean energy facility project subscribers; (C) any other tariffs proposed pursuant to this subsection; and (D) any proposal to recover costs associated with administering the implementation and operation of the shared clean energy facility pilot program.

[(d)] (e) Not later than one year after being selected for an award under the shared clean energy facility pilot program and annually for two years thereafter, each recipient shall submit a report, in accordance with section 11-4a of the general statutes, to the joint standing committee of the General Assembly having cognizance of matters relating to energy and to the Department of Energy and Environmental Protection. Such report shall include, but not be limited to, information concerning the status of the shared clean energy facility.

[(e)] (f) On or before [January] July 1, 2018, the department shall file a report, in accordance with the provisions of section 11-4a of the general statutes, with the joint standing committee of the General Assembly having cognizance of matters relating to energy, (1) analyzing the success of the shared clean energy pilot program, (2) identifying and analyzing the success of programs in other states that allow facilities similar to a shared clean energy facility, and (3) recommending whether a permanent program should be established in this state and, if so, any necessary legislation.

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

Section 1

from passage

16-243p(a)

Sec. 2

from passage

PA 15-113, Sec. 1

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do 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.

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 17 $

FY 18 $

Various State Agencies

All Funds - Cost

See Below

See Below

Note: All Funds=All Funds

Municipal Impact:

Municipalities

Effect

FY 17 $

FY 18 $

Various Municipalities

Cost

See Below

See Below

Explanation

The bill requires the shared clean energy pilot program to be financed with one or more tariff mechanisms approved by the Public Utilities Regulatory Authority (PURA) for the state's electric distribution companies. The state and municipalities, as ratepayers, would incur increased costs dependent on the tariff mechanisms approved by PURA.

House “A” specifies how the Department of Energy and Environmental Protection will consider proposals for the program and requires the electric distribution companies to submit their tariff proposals to PURA which does not have a fiscal impact.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to the tariff mechanisms approved by PURA.

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:

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)

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