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General Assembly Raised Bill No. 5227
February Session, 2020
LCO No. 1646
Referred to Committee on ENERGY AND TECHNOLOGY
Introduced by:
(ET)
AN ACT CONCERNING DI STRIBUTED ENERGY RES OURCES
SYSTEM IMPROVEMENTS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 16-244w of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective October 1, 2020): 2
(a) Notwithstanding subsection (a) of section 16-244e, each electric 3
distribution company, as defined in section 16-1, shall submit a proposal 4
or proposals to the Department of Energy and Environmental Protection 5
for a pilot program to build, own or operate grid-side system 6
enhancements, including, but not limited to, energy storage systems, as 7
defined in section 16-1, for the purpose of demonstrating and 8
investigating how distributed energy resources, as defined in section 16-9
1, can be reliably and efficiently integrated into the operation of the 10
electric distribution system in a manner that maximizes the value 11
provided to the electric grid, electric ratepayers and the public from 12
such resources. Such proposal shall complement and enhance the 13
programs, products and incentives available through the Connecticut 14
Green Bank and the Connecticut Energy Efficiency Fund, pursuant to 15 Raised Bill No. 5227
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sections 16-244r, 16-244s and 16-244t, and other similar programs that 16
support the deployment of distributed energy resources. 17
(b) The department and the Public Utilities Regulatory Authority 18
shall evaluate such proposals and may approve such proposals if such 19
proposals demonstrate: (1) How grid-side system enhancements, 20
including, but not limited to, energy storage systems, can be reliably and 21
cost-effectively integrated into the electric distribution system; and (2) 22
that such proposals maximize the value provided to ratepayers. The 23
department and authority may perform the evaluation jointly or 24
concurrently. Any such proposal [that is approved by the department 25
shall be subject to review and approval by the Public Utilities 26
Regulatory Authority, and] shall be approved by the authority if the 27
authority concludes that investment in such grid-side system 28
enhancement is reasonable, prudent and provides value to ratepayers. 29
(A) For any joint evaluation performed pursuant to this section, the 30
department and authority shall conduct one proceeding and develop 31
one administrative evidentiary record. The department and authority 32
may issue one joint decision or determination. Notwithstanding section 33
16-9b, the commissioner shall not be a party or participant in the joint 34
evaluation proceeding. 35
(B) For any concurrent evaluation performed pursuant to this section, 36
the department and authority shall each conduct a proceeding and may 37
develop one administrative evidentiary record. 38
(c) Each electric distribution company may enter into joint ownership 39
agreements, partnerships or other contractual agreements for services 40
with private entities to carry out the provisions of this section. The costs 41
incurred by the electric distribution companies pursuant to this section 42
shall be recovered from all customers of the contracting electric 43
distribution company through a fully reconciling component of electric 44
rates for all customers of electric distribution companies, until the 45
electric distribution company's next rate case, at which time such costs 46
and investments shall be recoverable through base distribution rates. 47 Raised Bill No. 5227
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(d) Not later than January 1, [2017] 2021, the department shall 48
evaluate such approved proposals pursuant to this section and submit 49
a report, in accordance with the provisions of section 11-4a, to the joint 50
standing committee of the General Assembly having cognizance of 51
matters relating to energy, regarding the performance, costs and 52
benefits associated with grid-side system enhancements, including, but 53
not limited to, energy storage systems procured pursuant to this section. 54
Sec. 2. (NEW) (Effective October 1, 2020) (a) For purposes of this 55
section, "anaerobic digestion facility" means a facility that obtained a 56
permit pursuant to section 22a-208a of the general statutes and produces 57
by-products that provide biogas derived from the decomposition of 58
farm-generated organic waste or source-separated organic material that 59
was processed through gas conditioning systems to remove impurities, 60
including, but not limited to, water, carbon dioxide and hydrogen 61
sulfide. 62
(b) The Commissioner of Energy and Environmental Protection, in 63
consultation with the Office of Consumer Counsel, the gas companies, 64
as defined in section 16-1 of the general statutes, and the Attorney 65
General, may solicit proposals, in one solicitation or multiple 66
solicitations, from anaerobic digestion facilities that will make biogas of 67
a quality suitable for injection, as determined by the department in 68
consultation with the gas companies, into the natural gas distribution 69
system in the state. The commissioner may select proposals from such 70
anaerobic digestion facilities that do not exceed by-product that is 71
generated by three hundred thousand tons of solid waste annually. 72
(c) In making a selection of such proposals, the commissioner shall 73
consider factors including, but not limited to, (1) whether the proposal 74
is in the best interest of natural gas ratepayers; (2) whether the proposal 75
promotes the policy goals outlined in the state-wide solid waste 76
management plan developed pursuant to section 22a-241a of the general 77
statutes; (3) any positive impacts on the state's economic development, 78
including any positive impacts on the state's agricultural industry; (4) 79
whether the proposal is consistent with the requirements to reduce 80 Raised Bill No. 5227
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greenhouse gas emissions in accordance with section 22a-200a of the 81
general statutes; (5) the characteristics of a relevant facility that produces 82
renewable natural gas; and (6) whether the proposal promotes natural 83
gas distribution system benefits. 84
(d) The commissioner may direct the gas companies to enter into gas 85
purchase agreements for such by-products selected pursuant to this 86
section for periods of not more than twenty years on behalf of all 87
customers of the state's gas companies. 88
(e) Any gas purchase agreement entered into pursuant to this section 89
shall be subject to review and approval by the Public Utilities 90
Regulatory Authority. Such review shall be completed not later than one 91
hundred twenty days after the date such agreement is filed with the 92
authority. The authority shall review and approve such gas purchase 93
agreement if it meets the solicitation proposal criteria pursuant to this 94
section. 95
(f) (1) The net costs of any such gas purchase agreement, including 96
costs incurred by the gas companies under the gas purchase agreement 97
and reasonable costs incurred by the gas companies in connection with 98
the gas purchase agreement, shall be recovered from all customers of 99
such company through the purchased gas adjustment clause pursuant 100
to section 16-19b of the general statutes. Any net revenue from the sale 101
of products purchased in accordance with the gas purchase agreement 102
entered into pursuant to this section shall be credited to customers 103
through the same fully reconciling rate component for all customers of 104
the contracting gas company. Any net costs or net revenues, as 105
applicable, of any such gas purchase agreement shall be apportioned in 106
proportion to the revenues of each contracting gas company as reported 107
to the authority pursuant to section 16-49 of the general statutes for the 108
most recent fiscal year. 109
(2) The gas companies may seek to recover any prudently incurred 110
costs related to constructing, operating and maintaining the 111
infrastructure associated with the processing, interconnection or 112 Raised Bill No. 5227
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distribution of by-products purchased under any such gas purchase 113
agreement, if such costs are identified and approved by the authority at 114
the time the authority approves any such gas purchase agreement, in 115
any existing rate tracking mechanism for the recovery of natural gas 116
infrastructure investments, or, if no mechanism currently exists, a newly 117
established rate tracking mechanism established by the authority. 118
(g) A gas company may elect to (1) use any renewable natural gas 119
procured under this section to meet the needs of its customers, or (2) sell 120
any such renewable natural gas into applicable markets or through 121
bilateral contracts with third parties with the net benefits or costs 122
reflected in the purchased gas adjustment clause pursuant to section 16-123
19b of the general statutes. 124
(h) The commissioner may retain consultants to assist in 125
implementing this section, including, but not limited to, the evaluation 126
of proposals submitted pursuant to this section. All reasonable costs 127
associated with the commissioner's solicitation and review of proposals 128
pursuant to this section shall be recoverable through the same fully 129
reconciling rate component for all customers of the gas companies. Such 130
costs shall be recoverable even if the commissioner does not select any 131
solicitation proposals pursuant to this section. 132
(i) (1) Any dispute arising from a contract that is approved by the 133
authority pursuant to this section shall be brought to the authority. A 134
party may petition the authority for a declaratory ruling or make an 135
application for review pursuant to this subsection. Notwithstanding 136
subsection (a) of section 4-176 of the general statutes, the authority may 137
not on its own motion initiate a proceeding to review a contract entered 138
into pursuant to this subsection. 139
(2) The authority shall review any contract dispute brought pursuant 140
to subdivision (1) of this subsection. The authority shall decide any such 141
contract dispute by issuing a declaratory ruling or a final decision in a 142
contested case proceeding, and may order legal and equitable remedies. 143
Any party to the contract shall have the right to appeal to the Superior 144 Raised Bill No. 5227
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Court from any such declaratory ruling or final decision issued 145
pursuant to this section. 146
This act shall take effect as follows and shall amend the following
sections:
Section 1 October 1, 2020 16-244w
Sec. 2 October 1, 2020 New section
Statement of Purpose:
To authorize the Department of Energy and Environmental Protection
and the Public Utilities Regulatory Authority to perform joint or
concurrent evaluations of grid-side system enhancement proposals, and
to provide the department authority to procure renewable natural gas
from anaerobic digestion facilities for injection into the natural gas
distribution system.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]