General Assembly Raised Bill No. 324
February Session, 2010 LCO No. 870
*_____SB00324CE____031910____*
Referred to Committee on Commerce
Introduced by:
(CE)
General Assembly
Raised Bill No. 324
February Session, 2010
LCO No. 870
*_____SB00324CE____031910____*
Referred to Committee on Commerce
Introduced by:
(CE)
AN ACT CONCERNING ENERGY AND THE STATE'S ECONOMY.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Section 16-243v of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(a) For purposes of this section:
(1) "Connecticut electric efficiency partner program" means the coordinated effort among the Department of Public Utility Control, the Connecticut Center for Advanced Technology, the Renewable Energy Investment Fund, electric distribution companies, the Institute for Sustainable Energy, persons and entities providing enhanced demand-side management technologies, and electric consumers to conserve electricity, use electricity more efficiently and reduce demand in Connecticut through the purchase and deployment of energy efficient technologies and to promote the development and use of Class I renewable energy sources, as defined in section 16-1;
(2) ["enhanced demand-side management technologies"] "Enhanced demand-side management technologies" means demand-side management solutions, customer-side emergency dispatchable generation resources, customer-side renewable energy generation, load shifting technologies, [and] conservation and load management technologies that reduce electric distribution company customers' electric demand or natural gas or oil consumption, technologies that manage, optimize or improve the efficiency of electricity usage or the ability to procure energy more effectively relative to a customer's specific load characteristics or improve the efficiency or performance of the electric system, combined heat and power systems, solar thermal and geothermal systems, Class I renewable sources connected on the customer side of the meter, and high efficiency natural gas and oil boilers and furnaces; [and]
(3) "Connecticut electric efficiency partner" means an electric distribution company customer who acquires an enhanced demand-side management technology or a person, [other than] including an electric distribution company, that provides enhanced demand-side management technologies to electric distribution company customers; and
(4) "Energy Innovation Council" means the council established pursuant to subsection (h) of this section.
(b) [The] Until June 1, 2010, the Energy Conservation Management Board, in consultation with the Renewable Energy Investments Advisory Committee, shall evaluate and approve enhanced demand-side management technologies that can be deployed by Connecticut electric efficiency partners to reduce electric distribution company customers' electric demand. Such evaluation shall include an examination of the potential to reduce customers' demand, federally mandated congestion charges and other electric costs. On or before October 15, 2007, the Energy Conservation Management Board shall file such evaluation with the Department of Public Utility Control for the department to review and approve or to review, modify and approve on or before October 15, 2007.
(c) Not later than October 15, 2007, the Energy Conservation Management Board shall file with the department, for the department to review and approve or to review, modify and approve, an analysis of the state's electric demand, peak electric demand and growth forecasts for electric demand and peak electric demand. Such analysis shall identify the principal drivers of electric demand and peak electric demand, associated electric charges tied to electric demand and peak electric demand growth, including, but not limited to, federally mandated congestion charges and other electric costs, and any other information the department deems appropriate. The analysis shall include, but not be limited to, an evaluation of the costs and benefits of the enhanced demand-side management technologies approved pursuant to subsection (b) of this section and establishing suggested funding levels for said individual technologies.
(d) Commencing April 1, 2008, and continuing until the effective date of this section, any person may apply to the department for certification and funding as a Connecticut electric efficiency partner. Such application shall include the technologies that the applicant shall purchase or provide and that have been approved pursuant to subsection (b) of this section. In evaluating the application, the department shall (1) consider the applicant's potential to reduce customers' electric demand, including peak electric demand, and associated electric charges tied to electric demand and peak electric demand growth, (2) determine the portion of the total cost of each project that shall be paid for by the customer participating in this program and the portion of the total cost of each project that shall be paid for by all electric ratepayers and collected pursuant to subsection (h) of this section. In making such determination, the department shall ensure that all ratepayer investments maintain a minimum two-to-one payback ratio, and (3) specify that participating Connecticut electric efficiency partners shall maintain the technology for a period sufficient to achieve such investment payback ratio. The annual ratepayer contribution for projects approved pursuant to this section shall not exceed sixty million dollars. Not less than seventy-five per cent of such annual ratepayer investment shall be used for the technologies themselves. No person shall receive electric ratepayer funding pursuant to this subsection if such person has received or is receiving funding from the Energy Conservation and Load Management Funds for the projects included in said person's application. No person shall receive electric ratepayer funding without receiving a certificate of public convenience and necessity as a Connecticut electric efficiency partner by the department. The department may grant an applicant a certificate of public convenience if it possesses and demonstrates adequate financial resources, managerial ability and technical competency. The department may conduct additional requests for proposals from time to time as it deems appropriate. The department shall specify the manner in which a Connecticut electric efficiency partner shall address measures of effectiveness and shall include performance milestones.
(e) [Beginning February 1, 2010, a certified Connecticut electric efficiency partner may only receive funding if selected in a request for proposal developed, issued and evaluated by the department. In evaluating a proposal, the department shall take into consideration the potential to reduce customers' electric demand including peak electric demand, and associated electric charges tied to electric demand and peak electric demand growth, including, but not limited to, federally mandated congestion charges and other electric costs, and shall utilize a cost benefit test established pursuant to subsection (c) of this section to rank responses for selection. The department shall determine the portion of the total cost of each project that shall be paid by the customer participating in this program and the portion of the total cost of each project that shall be paid by all electric ratepayers and collected pursuant to the provisions of this subsection. In making such determination, the department shall (1) ensure that all ratepayer investments maintain a minimum two-to-one payback ratio, and (2) specify that participating Connecticut electric efficiency partners shall maintain the technology for a period sufficient to achieve such investment payback ratio. The annual ratepayer contribution shall not exceed sixty million dollars. Not less than seventy-five per cent of such annual ratepayer investment shall be used for the technologies themselves. No Connecticut electric efficiency partner shall receive funding pursuant to this subsection if such partner has received or is receiving funding from the Energy Conservation and Load Management Funds for such technology. The department may conduct additional requests for proposals from time to time as it deems appropriate. The department shall specify the manner in which a Connecticut electric efficiency partner shall address measures of effectiveness and shall include performance milestones.] On and after the effective date of this section, any person may apply to the department for a certificate of public convenience and necessity as a Connecticut electric efficiency partner. Such application shall include the technologies that the applicant shall provide pursuant to subsection (i) of this section. The department shall act on any application not later than thirty days after receipt, and may grant an applicant a certificate of public convenience if the applicant possesses and demonstrates adequate financial resources, managerial ability and technical competency. The department may, with the consent of the applicant, extend the time for decision on the application by an additional thirty days if necessary to obtain additional information regarding the applicant or the technologies. The department may conduct additional requests for proposals from time to time. No Connecticut electric efficiency partner shall receive electric ratepayer funding without receiving a certificate of public convenience and necessity as a Connecticut electric efficiency partner by the department pursuant to subsection (d) of this section.
(f) [The] Until the effective date of this section, the department may retain the services of a third party entity with expertise in areas such as demand-side management solutions, customer-side renewable energy generation, customer-side distributed generation resources, customer-side emergency dispatchable generation resources, load shifting technologies and conservation and load management investments to assist in the development and operation of the Connecticut electric efficiency partner program. The costs for obtaining third party services pursuant to this subsection shall be recoverable through the systems benefits charge.
(g) [The] Until the effective date of this section, the department shall develop a long-term low-interest loan program to assist certified Connecticut electric efficiency partners in financing the customer portion of the capital costs of approved enhanced demand-side management technologies. The department may establish such financing mechanism by the use of one or more of the following strategies: (1) Modifying the existing long-term customer-side distributed generation financing mechanism established pursuant to section 16-243j, (2) negotiating and entering into an agreement with the Connecticut Development Authority to establish a credit facility or to utilize grants, loans or loan guarantees for the purposes of this section upon such terms and conditions as the authority may prescribe including provisions regarding the rights and remedies available to the authority in case of default, or (3) selecting by competitive bid one or more entities that can provide such long-term financing.
(h) Not later than July 1, 2010, the department shall establish an Energy Innovation Council, which shall have the following members: (1) The executive director of the Connecticut Center for Advanced Technology; (2) the director of the Renewable Energy Investment Fund; (3) the chairman of the Institute for Sustainable Energy; and (4) a commissioner of the Public Utilities Control Authority or staff designee of the department. The council's objective shall be to expedite the commercialization and impact of enhanced energy management technologies. The council shall provide oversight to the Connecticut electric efficiency partner program established pursuant to the provisions of this section. The council shall confer at least monthly and provide written record of its meetings and actions. Each electric distribution company shall appoint a representative to serve in an advisory capacity to the council and facilitate council communication with the company.
(i) On and after the effective date of this section, the Energy Innovation Council shall evaluate and approve not more than ninety days after submittal, new applications from Connecticut electric efficiency partners for projects and grants for enhanced demand-side management technologies as part of the Connecticut electric efficiency partner program, provided any such application is consistent with this section and demonstrates for the proposed project that there is either (1) an electric system benefit-to-cost ratio of at least one and one-half to one for the project; or (2) an electric system benefit-to-cost ratio of at least one to one and the project integrates Class I renewable energy sources or produces natural gas or oil savings. All Connecticut electric efficiency partner applications for projects seeking a grant shall indicate that the participating customer will pay for at least fifty per cent of the installed costs, provided such customer share may be offset with applicable tax credits, energy value or other savings. The council shall award grants on an individual application basis. The council shall also specify that participating Connecticut electric efficiency partners shall maintain the technology for a period sufficient to achieve the expected benefits. To assist a Connecticut electric efficiency partner in developing its application for submittal to the council and before submitting such application, an applicant may request written verification from the council that its proposed project is sufficiently and reasonably defined. Not later than thirty days after such request, if the council so determines, a written validation shall be released. After such verification and with the affected customer or customers' written permission, the Connecticut electric efficiency partner may request billing and usage data on behalf of such customer or customers from an electric distribution company, which shall provide the requested information within thirty days from receipt of the request.
(j) Connecticut electric efficiency partner projects approved pursuant to subsection (i) of this section may receive a one-time grant, not to exceed fifty per cent of the total installed cost of the project. The council shall determine the size of grants on an individual application basis and shall adjust the size of the grant based on (1) economics of the specific project; (2) whether the project preserves or creates jobs in Connecticut; (3) environmental benefits realized as a result of the project; (4) the project's ancillary electric market or system benefits; and (5) the degree of technology integration and innovation. Such grants shall be funded directly through the Connecticut electric efficiency partner program. On and after the effective date of this section, the annual ratepayer contribution for projects approved pursuant to this section shall not exceed sixty million dollars, provided any one technology cannot use more than one-third of the annual funding of grants for the electric efficiency partner program. An electric distribution company shall recover its costs and investment in its Connecticut electric efficiency partner project, as described in its application, through the systems benefits charge, provided, if actual or projected costs of all projects exceed sixty million dollars in one year, the electric distribution company may defer such excess, with a return, for future recovery, and further provided the council shall adjust future grants and projects to assure that any such excess beyond sixty million dollars of annual costs are minimized. Notwithstanding any provision of the general statutes, an electric distribution company may develop, purchase, own and operate renewable energy source generation pursuant to this section.
(k) For each project or program supported by ratepayer contribution, the council shall require the applicable Connecticut electric efficiency partner to submit data sufficient to enable the department and an electric distribution company to determine annual revenue requirements on a forecasted and actual basis and to enable the council to monitor the efficacy and cost-effectiveness of such project or program at least annually, commencing in the year after the project or program has become operational. In conducting such monitoring, the council may work in conjunction with the Energy Conservation Management Board or may use a third-party consultant, provided the costs of monitoring shall be included as recoverable costs pursuant to subsection (l) of this section. The council shall review the results of the monitoring and shall issue a report, in accordance with the provisions of section 11-4a, to the joint standing committees of the General Assembly having cognizance of matters relating to energy and commerce. If the council determines that a project or program has not provided or will not provide the benefits that formed the basis for the grant or other ratepayer contribution, the council may suspend further grants for the project or program, provided any grants or costs awarded shall continue to be recovered by the electric distribution company.
[(h)] (l) The department [shall] and the council may provide for the payment of [electric ratepayers'] a participating electric customer's portion of the costs of deploying enhanced demand-side management technologies by implementing a contractual financing agreement with the Connecticut Development Authority or a private financing entity selected through an appropriate open competitive selection process, through loans available from the Renewable Energy Investment Fund or through a financing agreement with an electric distribution company. The department and council shall provide for the payment of electric ratepayers' portion of the costs of deploying enhanced demand-side management technologies by allowing an electric distribution company to recover any remaining costs of participation through the systems benefits charge. The electric distribution companies may earn a return on investment in any enhanced demand-side technologies equal to that allowed for a generation project proposed in whole or in part by an electric distribution company approved by the department pursuant to section 16-243u. Such costs and return may be recovered over time by establishing a regulatory asset, with electric distribution company recovery through the systems benefits charge over an amortization period to be established by the department based upon the expected useful life of the projects and programs. Section 16-43 shall not apply to any loan or financing arrangement made by an electric distribution company pursuant to this section. No contractual financing agreements entered into with the Connecticut Development Authority shall exceed ten million dollars. Any electric ratepayer costs resulting from such financing agreement shall be recovered from all electric ratepayers through the systems benefits charge.
[(i)] (m) On or before [February 15, 2009, and annually thereafter, the department] July 1, 2011, the council shall report to the joint standing [committee] committees of the General Assembly having cognizance of matters relating to energy and commerce regarding the effectiveness of the Connecticut electric efficiency partner program established pursuant to this section. Said report shall include, but not be limited to, an accounting of all benefits and costs to ratepayers, a description of the approved technologies, the payback ratio of all investments, the number of programs deployed and a list of proposed projects compared to approved projects and reasons for not being approved.
[(j)] (n) On or [before] after April 1, [2011] 2013, the Department of Public Utility Control shall initiate a proceeding to review the effectiveness of the program and perform a ratepayer cost-benefit analysis. Based upon the department's findings in the proceeding, [the department may modify or discontinue] the council may recommend to the joint standing committees of the General Assembly having cognizance of matters relating to energy and commerce that the partnership program established pursuant to this section be modified or discontinued.
(o) On or before August 1, 2010, the electric distribution companies and the council shall determine the scope of an energy intensity study of customers for which energy is a material part of their cost structure and shall complete such study by September 30, 2010. The electric distribution companies shall contact customers identified in such study that appear to have energy characteristics that may benefit from participation in the electric efficiency partner program and seek their permission to be identified to entities that may offer solutions to such customers through a solicitation process administered by the council. The council shall include information on this process in its annual reports to the General Assembly.
(p) (1) Electric distribution companies may own and operate Class I renewable generation facilities within the state. An electric distribution company shall work with in-state equipment manufacturers and craft workers in developing and constructing such facilities, provided (A) such facilities are connected to its distribution system; (B) the equipment for such facilities are manufactured or assembled by companies within the state to the extent practicable; (C) the facilities are installed and maintained by workers employed within the state; and (D) the council approves the technologies used in the project. The cumulative ownership of Class I renewable energy sources by electric distribution companies pursuant to this subsection shall not exceed thirty megawatts of capacity by December 31, 2011, sixty-five megawatts by December 31, 2012, and one hundred megawatts by December 31, 2013. The council shall review the program by February 15, 2013, and recommend to the joint standing committees of the General Assembly having cognizance of matters relating to energy and commerce whether to extend and expand this program beyond 2013.
(2) An electric distribution company shall recover its costs for facilities it owns and operates pursuant to this subsection based on a reconciling formula that provides for full recovery of any incurred costs, including a return on investment established as described in subsection (l) of this section, based on cost-of-service principles established pursuant to section 16-19e, provided the department shall approve such formula after a hearing held in a proceeding or proceedings separate from other distribution rate proceedings. Such facilities shall be eligible for any state or federal incentives, grants or credits, including, but not limited to, those available under programs administered by the Renewable Energy Investments Board. Any revenue requirements resulting from this program incurred before January 1, 2013, shall be recovered through the grants established in subsection (j) of this section.
(3) The Energy Innovation Council, in conjunction with the participating electric distribution companies and certified Connecticut electric efficiency partners, shall issue a report, in accordance with the provisions of section 11-4a, to the joint standing committees of the General Assembly having cognizance of matters relating to energy and technology, environment and commerce not later than January fifteenth of 2011, 2012 and 2013. Each report shall describe for the preceding year (A) the status of the Connecticut electric efficiency partner program, including the levels and types of participation; (B) the amount of authorized investment and its cost; (C) the actual and expected future benefits created by the program, including contributions to Connecticut jobs and commerce; (D) the improvement to the commercialization of Class I renewable energy sources and their integration with the state's power systems and energy markets; and (E) opportunities to improve the effectiveness of the program. The 2013 report shall also include a summary of such information for 2011, 2012 and 2013, and recommendations for further use of the program. The council shall retain an independent consulting firm from a list of firms developed by the department, in consultation with the Office of Consumer Counsel, to audit the council's records and the program operations and project results, and the report from such firm shall be included in the council's annual report to the General Assembly.
(4) Not later than September 1, 2010, the council and electric distribution companies, working together, shall identify no less than two studies to determine optimal locations and characteristics for installing Class I renewable energy sources under the program established pursuant to this section. Not later than September 1, 2010, the council shall provide electric distribution companies with an assessment of key issues pertinent to the commercialization of fuel cells and their integration with the state's electric systems and energy markets, including lessons learned from previously proposed or completed projects. The electric distribution companies shall work in conjunction with staff from the council or its members' staffs to issue, not later than December 31, 2010, the findings of the two studies. The findings shall provide guidance to the investments made under the purview of the program established pursuant to this section.
Sec. 2. Subsection (a) of section 16-50k of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2010):
(a) Except as provided in subsection (b) of section 16-50z, no person shall exercise any right of eminent domain in contemplation of, commence the preparation of the site for, commence the construction or supplying of a facility, or commence any modification of a facility, that may, as determined by the council, have a substantial adverse environmental effect in the state without having first obtained a certificate of environmental compatibility and public need, hereinafter referred to as a "certificate", issued with respect to such facility or modification by the council. Certificates shall not be required for (1) fuel cells built within the state with a generating capacity of two hundred fifty kilowatts or less, or (2) fuel cells built out of state with a generating capacity of ten kilowatts or less. Any facility with respect to which a certificate is required shall thereafter be built, maintained and operated in conformity with such certificate and any terms, limitations or conditions contained therein. Notwithstanding the provisions of this chapter or title 16a, the council shall, in the exercise of its jurisdiction over the siting of generating facilities, approve by declaratory ruling (A) the construction of a facility solely for the purpose of generating electricity, other than an electric generating facility that uses nuclear materials or coal as fuel, at a site where an electric generating facility operated prior to July 1, 2004, (B) the construction or location of any fuel cell, unless the council finds a substantial adverse environmental effect, or of any customer-side distributed resources project or facility or grid-side distributed resources project or facility with a capacity of not more than sixty-five megawatts, as long as such project meets air and water quality standards of the Department of Environmental Protection, [and] (C) the siting of temporary generation solicited by the Department of Public Utility Control pursuant to section 16-19ss, and (D) projects undertaken pursuant to section 16-243v, as amended by this act.
This act shall take effect as follows and shall amend the following sections:
Section 1 from passage 16-243v
Sec. 2 July 1, 2010 16-50k(a)
This act shall take effect as follows and shall amend the following sections:
Section 1
from passage
16-243v
Sec. 2
July 1, 2010
16-50k(a)
CE Joint Favorable
CE
Joint Favorable