Connecticut Seal

General Assembly

File No. 517

    February Session, 2018

Substitute Senate Bill No. 334

Senate, April 16, 2018

The Committee on Energy and Technology reported through SEN. WINFIELD of the 10th Dist. and SEN. FORMICA of the 20th Dist., Chairpersons of the Committee on the part of the Senate, that the substitute bill ought to pass.

AN ACT CONCERNING MUNICIPAL AND STATE COMPETITIVE PROCUREMENT OF ELECTRICITY, NATURAL GAS, RENEWABLE ENERGY AND OTHER ENERGY-RELATED PRODUCTS BY NONPROFIT ENERGY BUYING CONSORTIA.

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

Section 1. (NEW) (Effective October 1, 2018) (a) As used in this section:

(1) "Competitively procured program" means a program (A) for which a nonprofit energy buying consortium publishes notice of any procurement (i) at least fifteen days prior to such procurement, which may include publication in a newspaper of general circulation in the state, (ii) in a display form that shall serve substantially to notify the public of such procurement and in print no smaller than ten-point type size, and (iii) on such nonprofit energy buying consortium's Internet web site, (B) that contains clear evaluation criteria, and (C) that meets a best value standard that may include the consideration of factors other than price that have a significant impact on cost, including, but not limited to, provisions regarding change in use or change in law, the financial strength of the supplier, the availability of customer service and the ability of the supplier to serve the customer base;

(2) "Nonprofit energy buying consortium" means an entity recognized as exempt from taxation pursuant to Sections 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, whose purpose is to aggregate a group of participating buyers and perform the procurement of electricity, natural gas, renewable energy, demand response, energy efficiency, solar, storage and other energy-related products, or any combination thereof, for such participating buyers; and

(3) "Participating buyers" means any agency, executive office, department, board, commission, bureau, division or authority of a municipality or the state, including the executive, legislative and judicial branches of the state, or of any political subdivision thereof, or any authority established by the General Assembly to serve a public purpose that participates in or becomes a member of a nonprofit energy buying consortium.

(b) Notwithstanding any municipal ordinance, general or special law to the contrary, any agency, executive office, department, board, commission, bureau, division or authority of a municipality or the state, including the executive, legislative and judicial branches of the state, or of any political subdivision thereof, or any authority established by the General Assembly to serve a public purpose may participate in and become a member of any competitively procured program organized and administered by or on behalf of a nonprofit energy buying consortium or of any subsidiary organization thereof, provided if a participating buyer is located within the boundaries of a community that is served by a municipal electric utility, such participating buyer may not purchase electricity, electricity-related products or renewable energy. Such nonprofit energy buying consortium or any such subsidiary organization shall procure electricity, natural gas, renewable energy, demand response, energy efficiency, solar, storage and other energy-related products, or any combination thereof, for such participating buyers. Any such procurement made pursuant to this section shall be exempt from any municipal or state competitive bidding requirements.

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

Section 1

October 1, 2018

New section

ET

Joint Favorable Subst.

 

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: See Below

Municipal Impact: See Below

Explanation

The bill allows governmental entities to participate in a competitively procured program to purchase energy-related products through a nonprofit energy buying consortium.

It is anticipated that the majority of municipalities already participate in energy consortium and as such, there would be no fiscal impact to those municipalities. There may be a savings to any municipality, however, that does not currently participate in a consortium.

To the extent various state agencies currently participate in an energy buying consortium, no fiscal impact is anticipated. There may be savings, however, to any agency currently not a member of a consortium.

The Out Years

Any savings that occur as a result of participating in a consortium would continue into the future subject to the terms of energy contracts.

OLR Bill Analysis

sSB 334

AN ACT CONCERNING MUNICIPAL AND STATE COMPETITIVE PROCUREMENT OF ELECTRICITY, NATURAL GAS, RENEWABLE ENERGY AND OTHER ENERGY-RELATED PRODUCTS BY NONPROFIT ENERGY BUYING CONSORTIA.

SUMMARY

This bill generally allows governmental entities to participate in a competitively procured program to purchase energy-related products (e.g., electricity, natural gas, solar, and renewable energy) through a nonprofit energy buying consortium, or its subsidiaries.

Under the bill, a consortium is a 501(c) tax-exempt nonprofit organization that aggregates participating buyers and procures energy-related products on their behalf. Participating buyers may include various governmental entities, such as state or municipal agencies and the executive, legislative, and judicial branches, among others. But the bill prohibits participating buyers located in communities served by a municipal electric utility from purchasing electricity, electricity-related products, or renewable energy (presumably, through the program).

Additionally, the bill:

EFFECTIVE DATE: October 1, 2018

COMPETITIVELY PROCURED PROGRAMS

Participating Buyers

The bill permits the following entities to participate in or become a member of a competitively procured program:

Notification Requirements

Under the bill, a nonprofit energy buying consortium must publish notice of any procurement that is part of a competitively procured program, and may do so in a newspaper with general circulation in Connecticut. The consortium must publish the notice:

Evaluation Criteria and Best Value Standards

The bill requires competitively procured programs to contain clear evaluation criteria and meet a best value standard, which may include considering factors other than price that have a significant impact on cost, including:

COMMITTEE ACTION

Energy and Technology Committee

Joint Favorable Substitute

Yea

21

Nay

4

(03/29/2018)

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