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OLR Bill Analysis
sSB 952 (File 291, as amended by Senate "A")*
AN ACT CONCERNING ENERGY STORAGE.
SUMMARY
This bill establishes deployment goals, program requirements, and
procurement authority for energy storage.
The bill requires the Department of Energy and Environmental
Protection (DEEP) to report to the Energy and Technology Committee,
annually, beginning by January 1, 2023, on its quantifiable progress
against the following energy storage deployment goals the bill
establishes:
1. 300 megawatts (MW) by December 31, 2024;
2. 650 MW by December 31, 2027; and
3. 1,000 MW by December 31, 2030.
The bill requires the Public Utilities Regulatory Authority (PURA),
by January 1, 2022, to (1) initiate a proceeding to develop and
implement one or more programs and associated funding mechanisms
for electric energy storage resources connected to the electric
distribution system and (2) report to the Energy and Technology
Committee on the proceeding’s status. The bill establishes program
objectives and allows PURA to select a third party to implement the
program.
The bill allows DEEP to issue requests for proposals (RFPs) for
energy storage projects connected at the transmission or distribution
level to achieve the bill’s goals when combined with PURA’s
programs. The bill requires the DEEP commissioner to select proposals
if she determines that procuring energy storage is cost effective. It
establishes factors she must consider when making selections and 2021SB-00952-R01-BA.DOCX
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subjects any agreements to PURA’s review. Under the bill, the electric
distribution companies (EDCs, i.e., Eversource and United
Illuminating) recover agreement costs from, and credit revenues to,
electric ratepayers.
*Senate Amendment “A” allows DEEP to select storage projects
paired with certain hydropower facilities and eliminates a provision
requiring municipal utilities to report on the quantifiable progress of
their carbon reduction.
EFFECTIVE DATE: July 1, 2021, except the DEEP reporting
requirement on energy storage deployment goals is effective upon
passage.
§ 2 — PURA PROCEEDING AND PROGRAMS
The bill requires PURA to initiate a proceeding to develop and
implement one or more programs and associated funding mechanisms
for electric energy storage resources connected to the electric
distribution system. In its proceeding, PURA must establish:
1. at least one program for residential electric customers,
2. at least one program for commercial and industrial electric
customers, and
3. a program for energy storage systems connected to the
distribution system in front of the meter and not located at a
customer’s premises.
The bill requires PURA to solicit input on developing these
programs from DEEP, the Connecticut Green Bank, the EDCs, and the
Office of Consumer Counsel (OCC).
Under the bill, PURA must consider one or more programs and rate
designs to encourage deployment of electric energy storage
technologies connected to the distribution system that most effectively
leverage the technology’s value to achieve objectives that:
1. provide positive net present value to all ratepayers, or a subset 2021SB-00952-R01-BA.DOCX
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of ratepayers paying for the benefits that accrue to that subset;
2. provide multiple types of benefits to the electric grid (e.g.,
resilience, ancillary services, leveling out peaks in electricity
use, or supporting deployment of other distributed resources);
3. foster sustained, orderly development of a state-based electric
energy storage industry; and
4. maximize the value from the participation of energy storage
systems in capacity markets.
PURA must also consider programs and rate designs to encourage
uses of electric energy storage technologies connected to the electric
distribution system that avoid or defer investment in traditional
electric distribution system capacity upgrades.
The bill requires PURA to consider all energy storage configurations
that are connected to the distribution system, including those
connected in front of the meter and not located at a customer’s
premises.
The bill allows PURA to select any combination of the Green Bank,
DEEP, the EDCs, or another third party it deems appropriate to
implement one or more electric energy storage programs.
§ 3 — DEEP SOLICITATION AND PROCUREMENT
Project Selection
The bill allows DEEP, in consultation with the state’s procurement
manager and the OCC, to issue RFPs for energy storage projects
connected at the transmission or distribution level that would, when
combined with programs PURA establishes, achieve the bill’s energy
storage goals. Projects may include stand-alone energy storage projects
or projects paired with (1) Class I renewable energy sources (e.g., wind
and solar) or (2) hydropower facilities with a nameplate capacity of up
to 100 MW.
The bill requires the DEEP commissioner, as part of her 2021SB-00952-R01-BA.DOCX
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determination on whether procuring energy storage is cost effective, to
publish and make available for public comment a cost effectiveness
test that considers each applicable benefit provided by energy storage.
If the commissioner determines that procuring energy storage is cost
effective, the bill requires her to begin selecting proposals.
The bill requires the DEEP commissioner to consider at least the
following when selecting proposals:
1. whether the proposal is in ratepayers’ best interest, including
the sources’ delivered price;
2. whether the proposal promotes electric distribution system
reliability, including during winter peak demand;
3. any positive impacts on the state’s economic development, as
determined in consultation with the Department of Economic
and Community Development commissioner;
4. whether the proposal is consistent with the state’s greenhouse
gas reduction requirements under the Global Warming
Solutions Act; and
5. whether the proposal is consistent with the state’s
Comprehensive Energy Strategy and Integrated Resources Plan.
PURA Review and Cost Recovery
Under the bill, any agreement entered into (presumably, by EDCs)
as a result of DEEP’s selection is subject to PURA’s review and
approval. (The bill does not explicitly allow DEEP to direct EDCs to
enter into agreements.) The bill requires PURA to (1) finish reviewing
an agreement within 120 days after it was filed with PURA and (2)
approve an agreement if it is cost effective and in electric ratepayers’
best interest.
Under the bill, EDCs must recover an approved agreement’s net
costs through a fully reconciling rate component on electric ratepayer
bills. Costs include those incurred by the EDCs under the agreement 2021SB-00952-R01-BA.DOCX
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and reasonable costs associated with the agreement. The bill also
requires EDCs to credit customers through the same fully reconciling
rate component for any net revenues from selling products purchased
under long-term contracts entered into under the bill. (The bill does
not specify lengths or quantities for contract terms.)
COMMITTEE ACTION
Energy and Technology Committee
Joint Favorable Substitute
Yea 24 Nay 2 (03/18/2021)