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<title>June 2007: Connecticut Revises Its Renewable Portfolio Standard</title>
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<p align="left"><strong><small><font face="Arial">About The Author:</font></small></strong></p>
<p align="left"><font face="Arial" style="font-size: 9pt">Robert A. Olson is a partner in the law firm of
Brown, Olson & Gould, P.C. which maintains a nationwide practice in energy law,
public utility law and related commercial transactions.</font></p>
<p><small><font face="Arial"><font style="font-size: 9pt">He can be reached at:</font><br>
<br>
<b><font color="#0000FF">Brown, Olson & Gould, PC</font></b><br>
2 Delta Drive<br>
Suite 301<br>
Concord, NH 03301<br>
<a href="mailto:[email protected]">[email protected]</a><br>
(603) 225-9716<br>
<a href="mailto:[email protected]"></a></font></small></p>
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<p ALIGN="left"><b><u><br>
<br>
June</u></b><u><b> 2007</b></u><font size="6"><b><br>
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<font size="6">CONNECTICUT REVISES ITS RENEWABLE PORTFOLIO STANDARD</font></p>
<p class="MsoNormal" align="left"> </p>
<p class="MsoNormal" align="left">By Robert A. Olson, Esq. and Maria
Reinemann, Esq.<strong> -- Brown, Olson and Gould, P.C.<br>
</strong>
</b><font face="Arial" size="2"><i>(</i><em>originally published by PMA OnLine Magazine:
2008/01/19</em><i>)</i></font></p>
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On June 5, 2007, Connecticut Governor Jodi Rell signed portions of
HB 7432 into law. House Bill 7432 contains several revisions to Connecticut’s
Renewable Portfolio Standard (“RPS”). The revisions include an increase in the
RPS percentage requirements, an increase in “Project 100” requirements,
permission for utilities to enter into long-term contracts for renewable energy
certificates (RECs), an expansion of Class III eligibility, and mandatory
municipal tax exemptions for certain renewable generating facilities.<center>
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Section 40 of House Bill 7432 increases the percentage requirements for
energy from Class I resources. Class I resources include solar power, wind
power, fuel cells, methane gas from landfills, ocean thermal power, and wave
or tidal power. The current RPS requires utilities to obtain 3.5% of their
power from Class I renewable resources in 2007, 5% in 2008, 6% in 2009, and
7% in 2010 and subsequent years. The new measure, effective October 1,
2007, increases the RPS for Class I resources to 8% in 2011, 9% in 2012, 10%
in 2013, 11% in 2014, 12.5% in 2015, 14% in 2016, 15.5% in 2017, 17% in
2018, 19.5% in 2019, and 20% in 2020 and thereafter. In addition, each year
utilities must continue to acquire an additional 3% of their power from
Class I or Class II resources (e.g., trash-to-<span class="term1"><span style="font-weight: normal">energy</span></span>
facilities, certain biomass facilities, and certain run-of-the-river
hydropower facilities). Under the bill, companies and suppliers are also
permitted to meet the RPS requirements by buying power and associated
attributes from residential net-metering customers.</p>
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Section 71 of the bill allows electric companies to meet the RPS by
procuring renewable energy certificates under long-term contracts starting
January 1, 2008. The bill allows electric companies to enter into contracts
of up to 15 years duration. </p>
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Section 124 modifies “Project 100” by requiring companies to enter into
contracts for 125 rather than 100 megawatts of Class I energy between
October 1, 2007 and October 1, 2008. This amount is increased to 150
megawatts starting October 1, 2008. Resources must have received funding
from the clean energy fund and individual projects must be at least one
megawatt in size. </p>
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Sections 42, 43 and 44 make changes to Class III requirements. Currently,
Class III resources include (1) electricity produced by systems that produce
heat and power developed at commercial and industrial facilities and (2)
electricity savings from conservation and load management programs at these
facilities that began on or after January 1, 2006. House Bill 7432 expands
Class III resources to include (1) systems that recover waste heat or
pressure from commercial and industrial processes installed on or after
April 1, 2007 and (2) electricity savings from all conservation programs
started on or after April 1, 2006. Customers who implement energy
conservation or begin operation of distributed resources on or after January
1, 2008, are entitled to Class III credits equal to at least one cent per
kilowatt hour. To be eligible for Class III credits, the customer must (1)
certify that applicable installation and metering requirements have been
met, (2) provide a detailed energy savings or output calculation for a
period specified by the Department of Public Utility Control (DPUC), and (3)
include any other information requested by the DPUC. The bill excludes
projects that violate the state’s water quality standards. </p>
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Sections 46 and 47 of the bill require municipalities to exempt certain
renewable energy systems from property taxes and expand the scope of the
systems that are eligible for the exemption. Under current law,
municipalities are permitted exempt Class I renewable resources and
hydropower facilities in one- to four-unit residential buildings. House Bill
7432 now requires municipalities to exempt these resources. Additionally,
the bill requires municipalities to exempt any passive or active solar,
water, or space heating system or geothermal energy resource in any
building.</p>
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Sections 108 and 109 require the DPUC to establish a grant program for Class
I distributed generation projects in businesses and state buildings. The
grant program funding is $25 million for fuel cell projects and $25 million
for other projects.<br>
<br>
The legislation seeks to create a long term energy policy for Connecticut and
hence contains a number of provisions unrelated to RPS requirements. Other
provisions of the bill allow certain customers with on-site generation to be
paid for excess electrical production at avoided wholesale cost, require
electric companies to submit plans for the construction of peaking generation,
require electric companies to waive demand charges for fuel cell operators in
certain circumstances, and provide funding for municipal renewable and
efficiency grant programs.<br>
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<blockquote>
<p align="left"><font face="Arial">
<small>Robert A. Olson is a partner in the law firm of Brown, Olson &
Gould P.C.
which maintains a nationwide practice in energy law, public utility law and related
commercial transactions. He can be reached at:</small></font><p align="center">
<font face="Arial"><small><font color="#0000FF"><b>Brown, Olson & Gould, PC</b></font><br>
2 Delta Drive, Suite 301<br>
Concord, NH 03301 <br>
<br>
<a href="mailto:[email protected]">[email protected]</a> | (603) 225-9716<a href="mailto:[email protected]"></a></small></font>
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