Wind energy related legislation in Connecticut
According to Conn. Gen. Stat. § 16-243h enacted in January of 1998, the State’s two utilities, United Illuminating Company (UI) and Connecticut Light and Power Company (CL&P), provide net metering options to commercial and residential customers. According to this Electric Restructuring Act all qualified customers must 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. Average energy prices were determined by Independent System Operator of New England (ISO-NE). The payments ranged from 5.5 ¢ to 8 ¢ per kWh for their net kWh production. However, since HB 7432 was enacted in October 2007, customers are no longer being charged monthly based on power production, instead customers will be able to bank or rollover the full value of their future net kWh production. This arrangement significantly increased customer reimbursement. While customers are able to offset future electric costs, they also have to continue paying monthly charges. According to HB 7432, the individual system capacity was increased to 2 MW and net metering was allowed for all customer classes. According to this policy, banking of kWh is tracked and reconciled for the entire year and the customer is paid for banked kWh at the end of the each banking period at which point payment restarts. CL&P and UI have not put a fixed 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 payment is 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 renewable energy credit (REC) ownership goes to the customer. A detailed list of all applicable sectors includes commercial, residential, industrial, schools, state government, local government, nonprofit, agricultural, institutional, multifamily residential and Federal Government.
According to Conn. Gen. Stat. § 16-245n enacted in 2000, Connecticut Clean Energy Fund (CCEF) legislation started the Operational Demonstration Program to help industry demonstrate feasibility of its clean energy related idea or product. Only early stage commercial companies are allowed to take part in this program. Applicable technologies include wind, solar thermal and 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 systems installed in Connecticut. Projects that demonstrate potential to develop commercial products within a time period of 3 years (5 years for fuel cells) will be supported by the program. In addition to the previously outlined 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 funding purposes and repayment terms will last until the project achieves commercial success. Moreover if the net product revenue crosses a certain threshold value, then an additional share will be collected by the Connecticut Clean Energy Fund. System owners are required to provide 25% cash cost share for collecting any sort of funding. The maximum amount that can be funded for each project is capped at $750,000. For funding in excess of $500,000 justification must be made for the project’s large scale potential benefit for Connecticut electric ratepayers. Technology developers must have a strong interest in commercialization of the product. They must gain approval from the Connecticut host site owner or operator. The project must be backed by a team of qualified partners, professionals and contractors. Applications will be evaluated based on a variety of criteria including short term and long term commercial opportunities and viability of the technology. The primary aim of CCEF is to boost Connecticut’s technology economy by investing in clean energy technologies and educating the residents of Connecticut.
In 2007, CCEF approved a loan of $557,134 to fund a 500 kW hydroelectric turbine system at Kirby Mill in Mansfield. The main source of funding 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 a New Energy Technology (NET) program to drive creative talent in Connecticut to promote the most energy saving and renewable energy technologies and aid in funding to commercialization. The primary aim of this NET program is to save energy in Connecticut and to improve 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. A maximum of 5 firms will be awarded the grant on an annual basis. The funding can be used for many purposes such as prototype testing, business plan development, product development, patent application, payroll and product marketing. OPM primarily funds projects that are in early stages of development with limited quantity in production or in the prototype phase. 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 consider, OPM is not looking for funding experiments, rather the funding will be provided to new and innovative uses 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 months of April through May, grant documentation 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 provides 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. To become 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, and tidal energy. Exemption is set at 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 provides 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 electricity generation are eligible to apply. 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 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 years. The maximum amount that can be granted to individual projects is capped at $4 million. For small wind projects $3.60 per watt will be funded and the evaluation time frame is 15 year. All 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. 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. Interest rate will vary depending on borrow history and condition and loans have a 10 year limit. Multi-Family Energy Conservation Loan Program offers financial support for large residential properties. In this case only loan amounts differ (being larger), 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 qualify for long term financing for the use of customer side distributed resources. The whole program is administered by the Bank 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 will be determined at the 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.