PA 16-196—sSB 272

Energy and Technology Committee

AN ACT CONCERNING THE USE OF MICROGRID GRANTS AND LOANS FOR CERTAIN DISTRIBUTED ENERGY GENERATION PROJECTS AND LONG-TERM CONTRACTS FOR CERTAIN CLASS I GENERATION PROJECTS

SUMMARY: This act expands the types of projects from which electric distribution companies (EDCs, i. e. , Eversource and United Illuminating) must purchase renewable energy credits (RECs, see BACKGROUND) in year six of their ongoing procurement (i. e. , 2017) to include larger, low-emission generation. It also adopts the REC procurement schedule that prior law required if the Public Utilities Regulatory Authority (PURA) determined that the cost of technologies included in purchase contracts had declined. (In practice, PURA determined that the cost has declined and thus extended this procurement schedule. )

The act also expands the Department of Energy and Environmental Protection's (DEEP's) microgrid grant and loan program (see BACKGROUND). It allows the program to provide matching funds or low interest loans for energy storage systems or distributed energy generation projects placed in service on or after July 1, 2016 and derived from Class I (e. g. , solar or wind) or Class III (e. g. , certain cogeneration or energy conservation) energy sources for eligible microgrids. Under prior law, recipients of grants and loans under the program could only use the funds for design, engineering services, and interconnection infrastructure (i. e. , not for generation).

EFFECTIVE DATE: July 1, 2016

REC PURCHASE REQUIREMENTS

Beginning in January 2012, the law required each EDC to solicit long-term (i. e. , 15-year) contracts with owners or developers of certain generation projects to purchase RECs produced by the projects. The law establishes a dollar amount of RECs that the EDCs must purchase each year. Prior law required the EDCs to meet their obligations with projects that fulfill the following requirements:

1. are Class I generation projects,

2. are less than 1000 kilowatts, and

3. emit no pollutants.

Under the act, the EDCs can only use contracts with such projects to meet up to half of the dollar amount of their year six (2017) obligation. The act requires the EDCs to meet the other half of their year six requirements with projects that meet the following requirements:

1. use Class I technologies;

2. are less than two megawatts in size; and

3. have emissions of no more than (a) 0. 07 pounds per megawatt-hour of nitrogen oxides, (b) 0. 10 pounds per megawatt-hour of carbon monoxide, (c) 0. 02 pounds per megawatt-hour of volatile organic compounds, and (d) one grain (presumably of particulate matter) per one hundred standard cubic feet.

The act retains requirements that all projects must (1) be on the customer's side of the meter and (2) serve the EDC's distribution system.

Existing law allows PURA, when approving zero-emission project contracts, to give preference to contracts for technologies manufactured, researched, or developed in the state. The act similarly allows PURA to do so for low-emission project contracts.

BACKGROUND

REC

A REC is a tradeable commodity that represents the attributes associated with power generation from renewable energy (e. g. , carbon emissions avoided). Owners of renewable generation projects can sell the power they produce on the wholesale electric market as “green power,” or they can sell the RECs associated with this power separately from the power.

Microgrid Grant and Loan Program

A “microgrid” generally refers to a small-scale electric distribution network that (1) links several users to one or more nearby distributed (onsite) energy resources and (2) can be operated in conjunction with the larger electrical grid or independently from the larger grid during a storm or other power outage.

By law, municipalities, electric companies, municipal electric utilities, energy improvement districts, and private entities may apply to DEEP's microgrid grant and loan program. Applicants may collaborate and submit applications together. The proposed microgrid must support critical facilities, such as hospitals, police and fire stations, and other facilities DEEP identifies.

OLR Tracking: MF; JO; MS: tjo