OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sHB-5356
AN ACT CONCERNING MODIFICATIONS TO THE RENEWABLE
PORTFOLIO STANDARD.
Primary Analyst: TM 4/8/24
Contributing Analyst(s): LG, JS
Reviewer: PR
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 25 $ FY 26 $
Department of Energy and
Environmental Protection
GF - Cost Up to
500,000
None
Note: GF=General Fund
Municipal Impact:
Municipalities Effect FY 25 $ FY 26 $
Various Municipalities Grand List
Reduction
None See Below
All Municipalities Potential
Revenue
Loss
See Below See Below
Explanation
This bill (1) expands the type of projects considered Class I renewable
energy sources to include certain fuel cell, hydropower, and nuclear
facilities; and (2) removes the sunset requirement on electric distribution
companies purchasing 5% of their power from Class III renewable
resources resulting in the impacts described below.
The bill exempts certain renewable energy technologies from: (1)
property tax, and (2) building permit fees. This result in a grand list
reduction from the property tax exemption beginning in FY 26 and a
potential revenue loss from the building permit fee exemption 2024HB-05356-R000363-FN.DOCX Page 2 of 3
beginning in FY 25.
1
,
2
Any impact to municipalities is dependent on the
amount of qualifying property and the number of approved building
applications.
The bill exempts certain renewable energy technologies from: (1)
property tax, and (2) building permit fees. This result in a grand list
reduction from the property tax exemption beginning in FY 26 and a
potential revenue loss from the building permit fee exemption
beginning in FY 25.
3
,
4
Any impact to municipalities is dependent on the
amount of qualifying property and the number of approved building
applications.
The bill requires the Department of Energy and Environmental
Protection (DEEP) to report on natural gas capacity in the state,
including ways to expand such capacity. This is expected to result in a
one-time cost of up to $500,000 for a consultant in FY 25.
Ratepayer Impact Statement
5
This bill results in a minimal ratepayer impact. The prioritization of
purchasing from one source or another may have a limited
6
impact on
the cost to ratepayers however the effect is indeterminate.
The Out Years
The annualized ongoing fiscal impact identified above would
1
In FY 24, certain tax-exempt renewable energy and pollution control equipment
results in a grand list reduction of approximately $625.1 million to all municipalities
cumulatively.
2
Each municipality sets its own fee amounts for building permits. Building permit fees
often range from $10 to $15 per $1,000 of construction.
3
In FY 24, certain tax-exempt renewable energy and pollution control equipment
results in a grand list reduction of approximately $625.1 million to all municipalities
cumulatively.
4
Each municipality sets its own fee amounts for building permits. Building permit fees
often range from $10 to $15 per $1,000 of construction.
5
The state and municipalities are ratepayers and therefore may be impacted by policy
changes that affect electric rates
6
There is currently a capacity of 2,100 MW in Class I renewable energy sources. (DEEP
Report p.6) 2024HB-05356-R000363-FN.DOCX Page 3 of 3
continue into the future subject to inflation.