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May 13, 2019

Connecticut’s DEEP Issues Draft Program Rules for New Statewide Shared Clean Energy Facility Program

Deadline for Public Comment June 3, 2019

On May 7, 2019, Connecticut’s Department of Energy and Environmental Protection (“DEEP”) issued Draft Program Rules to establish a new Statewide Shared Clean Energy Facility Program (the “Program”). The Program was created under Public Act 18-50 to support the development of shared clean energy facilities (“SCEFs”) in the state. Some highlights of the Program’s rules and requirements are as follows:

Program Structure

Under the Program, an electric utility will purchase the subscribed energy and the associated renewable energy credits (“RECs”) produced by a selected SCEF. The subscribers will receive credits on their monthly electric bills based on their winning bid price. Concurrently, the utility will purchase any unsubscribed energy and the associated RECs produced by the SCEF at the set market price.

Eligible Projects

To participate in the Program, a SCEF must be a new Class I renewable generation project[1] and have a nameplate capacity rating greater than 100 kW and not exceed 4,000 kW. Facilities already constructed or under construction are excluded. A SCEF is permitted to use federal subsidies, incentives, or tax breaks; however, a facility is ineligible if it receives, or seeks to receive, any Connecticut ratepayer-funded incentives or subsidies, such as state RFP responses or the LREC/ZREC program. A SCEF for a selected bid will have three (3) calendar years from the date of PURA approval of the award to receive an In-Service Date from the utility. If the SCEF is not in service within twelve (12) months after the In-Service Date (i.e., four (4) years from the date of PURA approval), the facility will no longer be eligible for the tariff.

Procurement Process

On an annual basis for a total of 6 years, the utilities will solicit bids for SCEFs, up to an aggregate total of 25 megawatts of capacity per year.

Evaluation and Selection Process

The purchase price for each SCEF will be based on a competitive bidding process. The utilities will evaluate bids based on fixed bid prices considering any applicable bid preferences as established by DEEP. The utilities will rank bids in order from lowest to highest price, and will select bids with the lowest unit price proposals first, after factoring in the bid preferences, and will continue until the required annual MW amount is procured.

A SCEF for a selected bid approved by PURA to receive tariff payments will be eligible for compensation for energy produced and delivered to the utility at the approved tariff rate for a twenty (20) year term commencing on the first day of the month following the In-Service Date.

This program is in the draft stage, and subject to public comment. DEEP will be accepting public comment on the draft program rules on May 20, 2019 at 9:30AM at DEEP’s New Britain Office located at 10 Franklin Square in Hearing Room 1. DEEP will also be accepting public comment on the draft program rules until June 3, 2019 at 4:00PM. Written comments may be filed electronically on DEEP’s website or submitted to DEEP.EnergyBureau@ct.gov

For more information on this program, please contact any of the members of Pullman & Comley’s Energy Team:

Lee Hoffman:            lhoffman@pullcom.com        860-424-4315

Fred Klein:                fklein@pullcom.com               860-424-4354

Amanda Gurren:       agurren@pullcom.com           860-424-4338

[1] “Class I renewable energy source” means (A) electricity derived from (i) solar power, (ii) wind power, (iii) a fuel cell, (iv) geothermal, (v) landfill methane gas, anaerobic digestion or other biogas derived from biological sources, (vi) thermal electric direct energy conversion from a certified Class I renewable energy source, (vii) ocean thermal power, (viii) wave or tidal power, (ix) low emission advanced renewable energy conversion technologies … (x) (I) a run-of-the-river hydropower facility that began operation after July 1, 2003, and has a generating capacity of not more than thirty megawatts, or (II) a run-of-the-river hydropower facility that received a new FERC license after January 1, 2018 … or (xi) a biomass facility that uses sustainable biomass fuel and has an average emission rate of equal to or less than .075 pounds of nitrogen oxides per million BTU of heat input …

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