Connecticut Makes DG Central to Energy Independence Movement

The Connecticut legislature has sent the Governor a bill that calls for on-site distributed generation (DG) to meet a growing portion of the state's electricity supply.

Observers expect the Governor to sign the "energy independence" bill [HB 7501] in the coming days. The legislation requires electricity providers in Connecticut to have an increasing level of combined heat and power (CHP) projects and conservation as part of their portfolio. The bill provides incentives for customers and utilities to install distributed generation projects including capital and operating cost subsidies and a program for long-term financing.

The bill requires the electric companies and competitive suppliers to acquire 1 percent of their supply from energy conservation services and cogeneration projects under 65 MW starting in 2007. This proportion increases to 4 percent by 2010. The Connecticut Department of Utility Control (DPUC) is directed to establish the protocols on how qualifying activities are certified, tracked and reported.

If a company, supplier, or wholesaler does not meet the standard, it must pay up to 5. 5 cents for each kilowatt-hour of its shortfall. Three quarters of the penalty payment goes to a state-managed conservation fund and one quarter to the CT Clean Energy Fund.

According to Daniel Sosland, Executive Director of Environment Northeast, the new portfolio requirements will require 320,000 MWhs in 2007 and go up to 1.28 million MWh in 2010.

The bill requires a program to provide one-time capital subsidies to customers who install customer side distributed generation. The subsidy ranges from $200 to $500 per kilowatt (kW) of generating capacity and depends on how well the project does at reducing Federally mandated congestion charges (FMCC).

The bill requires a program to provide awards to the electric companies to educate, assist, and promote investments in these resources. The one-time award is paid when the resource becomes operational, under the following schedule, $200/kW for resources developed by January 1, 2008, $150/kW by January 1, 2009, $100/kW by January 1, 2010, and $50/kW for resources developed thereafter.

The bill exempts new customer side distributed resources from backup charges if the resource's capacity is less than peak load and the resources are available to the system during peak periods.

More

• Connecticut "Energy Independence" Legislation HB 7501 Summary - [see also Full Text of Legislation]
• Connecticut Department of Utility Control(DPUC)