September 2009 Archives

Wind Energy-Related Legislation in Connecticut

According to Conn. Gen. Stat. § 16-243h enacted in January 1998, State's two utilities - United Illuminating Company (UI) and Connecticut Light and Power Company (CL&P) provide net metering facility to its commercial and residential customers. According to this Electric Restructuring Act all customers need to have electrical generators using Class I renewable resources including Wind energy. Net metering is a system to determine the total amount of electricity used by these customers or provided to the power grid by them during normal billing cycles. Using net metering more energy is provided to the electric grid than they use. Previously CL&P and UI used to charge all of its customers on a monthly basis for any surplus production. These average energy prices were determined by Independent System Operator of New England (ISO-NE). The charges were in between 5.5 ¢ and 8 ¢ per kWh for their net kWh. But, after HB 7432 got enacted in October 2007, all customers are no more being charged a monthly amount which is based on amount of energy, instead customers will be able to bank or rollover the full value of their future net kWh consumption. These arrangement significantly increased customers' reimbursement. Though the customers are able to offset the future electric cost, but they also have to continue paying their monthly charges. According to HB 7432, the individual system capacity was increased to 2 MW and net metering was allowed for all customers classes. According to this policy, banking of kWh is tracked and reconciled for the whole year and the customer is paid for banked kWh at the end of the each banking period and it starts over again. CL&P and UI have not fixed any upper limit on the net capacity of net metered systems. If a customer's net excess generation (NEG) exceeds the monthly billing period then it is simply carried over for the following month. For customers with systems greater than 10 kWh, net metering is assesses by the State's competitive transition assessment. In this case the amount is decided based on the amount of energy consumed by the customer from the facilities of the utilities without netting any electricity produced by him. In all cases the REC ownership goes to the customers. A detailed list of all the applicable sectors will include commercial, residential, industrial, schools, state government, local government, nonprofit, agricultural, institutional, multifamily residential and Fed Government.

According to Conn. Gen. Stat. § 16-245n enacted in 2000, Connecticut Clean Energy Fund (CCEF) legislation started Operational Demonstration Program to help the industry to demonstrate feasibility of its clean energy related idea or product. Only early stage commercial companies are allowed to take participate in this program. List of eligible clean renewable technologies include wind, solar thermal electric, photovoltaic, biomass, fuel cells, small hydroelectric, wave energy, ocean thermal and some other distributed generation technologies. The estimated amount from 2010 funded through this Operational Demonstration Program is $4 million for all the systems installed n Connecticut. Projects that have possibility of developing commercial product within a time period of 3 years (5 years for fuel cells) will b supported by the program. Other than the aforesaid renewable technologies, some other energy resources which do not involve the combustion of petroleum, coal, municipal waste products or nuclear fission are also likely to be funded by the program. All supported projects must have a capacity of at least 1 kW electricity generation. Projects will be provided unsecured loans for the funding purposes and repayment term will be till the project achieves its commercial success. Moreover if the net product revenue crosses a certain threshold value, then an additional share of it will be collected by the Connecticut Clean Energy Fund. The system owners are required to provide 25% cash cost share for availing any sort of funding. The maximum amount that can be funded for each project is capped at $750,000. For availing a funding more than $500,000 justification must be made in terms of project's large scale potential benefit for Connecticut electric ratepayers. Developers of the technology must have a strong interest to commercialize the product. They must produce approval from the Connecticut host site owner or operator. The project must be backed up by a team of qualified partners, professionals and contractors. The application for availing the fund will be evaluated based on a variety of criterion like short term and long term commercial opportunities, technology viabilities etc. the main aim of CCEF is to boost the Connecticut's technology economy by investing more and more in clean energy technologies and side by side educating the residents of Connecticut about the importance of clean energy technologies. In 2007, CCEF has approved a loan of $557,134 funding 500 kW hydroelectric turbine systems at Kirby Mill in Mansfield. The main source of fund in CCEF is the surcharge on ratepayers' electric bills and it is administered by the Connecticut Innovations.

Connecticut's Policy Development and Planning Division - Energy Management started New Energy Technology (NET) program to promote the creative talents in Connecticut to promote the most energy saving and renewable energy technologies and to fund them to be commercialized. The main aim of this NET program is save energy in Connecticut and to improve the Connecticut's economy by creating new employment opportunities. Incentives or grants will be provided to applicant's submitting promising pre-commercial technologies that intend to save energy or use renewable energy sources. The maximum amount that will be approved to individuals is capped at $10,000. A small firm employing 30 or less than 30 people is eligible to apply for the grant. Normally each year a maximum of 5 firms will be awarded the grant. The funding can be used for many purposes like prototype testing, business plan development, product development, patent application, payroll and product marketing. OPM mainly funds the projects which are in early stage of development or in the prototype development stage or have produced products in limited quantities. In addition to funding, financial and technical assistance is also provided to recipients of the grant from the Connecticut Office of Policy and Management (OPM). The applicant should always remember, OPM is not looking for funding experiments, rather the funding will be provided to new and innovative use of a technology. Different stages of the program's application are as follow - in November the Grant application period begins and in February it closes. In the month of April/May Grant award document is mailed to the applicant. By the end of September in the same year, the grant recipients should get the financial and progress report reviewed by the department.

According to Conn. Gen. Stat. § 12-81, the State of Connecticut provide property tax exemption for facilities that generate electricity from Class I renewable energy systems. The electricity produced must be used for private residential use only. For becoming eligible for this property tax exemption, the system must be installed on or after October 2007. The system must be used to serve single family homes or multifamily dwellings. The list of eligible renewable technologies include solar water heat, passive solar space heat, fuel cells, Wind, Biomass, Geothermal heat pumps, Tidal energy etc. the amount of exemption is 100% for any renewable energy property. The applicant must claim the exemption to the assessor or board of assessors in the same town where the system is installed and it should be done before the month of November in the applicable assessment year.

Various grant and loan programs

CCEF - On-Site Renewable DG Program
This program is aimed to provide grants to fund the installation of electricity generating systems in commercial and industrial buildings. Systems that use wind, photovoltaic, hydropower or other renewable energy sources for the electricity generation are eligible to apply for. An amount of $66.24 million is granted for total funding through this program through the year of 2010. System with a capacity of minimum 10 kW will be accepted under this program. All the facilities must be installed within the service territory of Connecticut Light and Power (CL&P) or United Illuminating (UI). For wind energy projects the grant recipients are required to operate the system for at least 10 year. The maximum amount that can be granted to individual project is capped at $4 million. For small wind project, $3.60 per watt will be funded and the evaluation timeframe is 15 year. All the renewable energy credits (RECs) generated by the recipient wind projects will be taken by the CCEF and in return the owner will be compensated on the present estimated value of the RECs. For availing the final grant amount, 70% of the projected AC energy must be generated within the first 6 months of operation.

CHIF - Energy Conservation Loan
According to C.G.S. 32-315, Connecticut Housing Investment Fund, Inc. (CHIF) provides energy conservation loans for single family owners and owners of 1 to 4 family homes. The applicant must meet the established annual income limit for his family size and location. Depending upon the borrower present situation, interest rate will vary and it can be repaid within a time limit of 10 years. Multi-Family Energy Conservation Loan Program offers financial support for large residential properties. In this case only the amount granted is larger than the single family loans, otherwise all terms are similar.

DPUC - Low-Interest Loans for Customer-Side Distributed Resources
According to Conn. Gen. Stat. § 16-243j enacted in July 2005, retail end use customers can avail long term financing for the use of customer side distributed resources. The whole program is administered by the Banc of America Leasing & Capital. The maximum amount which can be approved through this program is capped at $150 million. Loans will be provided with fixed interest rate and it will be determined at time of approval of the application. Only projects with a minimum capacity of 50 kW and a maximum capacity of 65 MW are eligible to apply.