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OLR Bill Analysis
HB 5456
AN ACT AUTHORIZING THE PURCHASE OF THE CAPITOL
DISTRICT ENERGY CENTER COGENERATION ASSOCIATES
ENERGY PRODUCTION PLANT.
SUMMARY
This bill authorizes the administrative services commissioner to
purchase from Capitol District Energy Center Cogeneration Associates
(CDECCA) Property Company, LLC the energy production plant in
Hartford that produces and provides steam and heated and chilled
water for the Capitol Area System (CAS) (see BACKGROUND).
The bill makes conforming changes to give the commissioner broad
authority to operate the plant, similar to her powers regarding the CAS.
These powers include recouping the costs of acquiring and operating
the plant from the state and non-state entities the CAS serves, as
described below.
The bill deems the negotiated “Purchase and Sale Agreement” for
the purchase of the plant and any related land, buildings,
improvements, equipment, or fixtures (“the plant”) ratified and
approved.
EFFECTIVE DATE: Upon passage
ENERGY PLANT ACQUISITION
The bill authorizes the commissioner to:
1. assume all supplier agreements and vendor, customer, and third-
party contracts related to CAS; and
2. as necessary to carry out the bill and the agreement: (a) perform
and undertake any obligation and (b) enter any agreement to
accomplish any transaction. 2022HB-05456-R000498-BA.DOCX
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The bill specifies that it does not (1) waive sovereign immunity other
than terms specified in the agreement and (2) limit the state from
changing how the plant is used, including its capacity, in the future.
The bill also broadly authorizes the commissioner to construct or
acquire energy production plants in Hartford to provide heating and air
conditioning through CAS. (But most of the bill’s conforming changes
to the commissioner’s authority specifically address the power plant
owned by CDECCA Property Company, LLC, at 490 Capitol Avenue.)
Rate Setting and Expenses
By law, the commissioner must periodically bill and collect CAS costs
from state agencies and owners of non-state buildings using the CAS.
The bill authorizes the commissioner to collect from these entities a pro-
rata share of the acquisition, operating, maintenance, and repair costs
related to the plant, including the legal and consultant costs for
acquiring the plant.
Under existing law, unchanged by the bill, the commissioner must
submit her proposed rates and rate-setting methods to the Office of
Policy and Management secretary for approval, who must approve or
disapprove the method or rate within 45 days.
Except for charges recouping the power plant’s acquisition costs,
which must be deposited into the General Fund, collected charges are
deposited into the public works heating and cooling energy revolving
account. The bill correspondingly expands the purposes for which the
commissioner may use the account to pay for the plant’s operational,
maintenance, repair, and improvement expenses.
BACKGROUND
Capitol Area District Heating and Cooling System
The Capitol Area District Heating and Cooling System, referred to as
CAS, is a state-owned thermal energy supply system. The system has
two closed-loop distribution systems (heated water and chilled water)
and a pump house. The loop consists of over three miles of underground
piping. CAS supplies heating and cooling services to ten state-owned 2022HB-05456-R000498-BA.DOCX
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and five privately owned buildings in the Capitol District.
Under an agreement that expires September 30, 2022, CAS purchases
the steam and heated and chilled water from the CDECCA energy
production plant.
COMMITTEE ACTION
Government Administration and Elections Committee
Joint Favorable
Yea 19 Nay 0 (03/28/2022)