STATE OF CONNECTICUT

PUBLIC UTILITIES REGULATORY AUTHORITYTEN FRANKLIN SQUARENEW BRITAIN, CT 06051

DOCKET NO. PURA DEVELOPMENT OF THE ADMINISTRATIVEPROCESSES AND PROGRAM SPECIFICATIONS FORVIRTUAL NET METERING

July 21, 2014

By the following Commissioners:

Michael A. CaronArthur H. HouseJohn W. Betkoski, III

Lead Staff: Error: Reference source not foundLegal Advisor: Error: Reference source not found

DECISION

TABLE OF CONTENTS

I. INTRODUCTION.......................................................................................................1A. SUMMARY.............................................................................................................1B. BACKGROUND OF THE PROCEEDING......................................................................1C. CONDUCT OF THE PROCEEDING.............................................................................1D. PARTIES AND INTERVENORS OR PARTICIPANTS......................................................2

II. POSITIONS OF PARTIES.........................................................................................2

III. AUTHORITY ANALYSIS...........................................................................................2A. DESCRIPTION OF VIRTUAL NET METERING.............................................................2B. SUMMARY OF THE NEW VIRTUAL NET METERING PROGRAM...................................2C. ISSUES.................................................................................................................3

1. Program Qualification Dates......................................................................32. VNM Queue Qualification...........................................................................43. Interconnection System Improvements....................................................54. Host Definitions..........................................................................................55. Aggregation.................................................................................................56. Generator Location.....................................................................................67. Supplier Load Settlement...........................................................................88. Unassigned Compensation........................................................................89. Tariff Language...........................................................................................9

IV. FINDINGS OF FACT.................................................................................................9

V. CONCLUSION AND ORDERS...............................................................................12A. CONCLUSION......................................................................................................12B. ORDERS.............................................................................................................13

DECISION

I. INTRODUCTION

A. SUMMARY

In the instant Decision, the Authority approves the electric distribution companies’ tariff riders that implement the new virtual net metering program designed in accordance with legislative intent. Instead of waiting for future legislative guidance concerning the issue of host aggregation, the Authority provided a workaround that will allow Connecticut’s agricultural sector to enjoy virtual net metering immediately. “Virtual netting” was created by the Authority to accommodate optimal land utilization, especially brownfields. The Authority also discusses its intention to vet generation pricing issues with the intent of standardizing electric generation charges across state programs.

B. BACKGROUND OF THE PROCEEDING

The Public Utilities Regulatory Authority (Authority or PURA) established this docket to develop the administrative processes and program specifications for virtual net metering (VNM) required by the passage of Public Act 13-298, An Act Concerning Implementation of Connecticut's Comprehensive Energy Strategy and Various Revisions to the Energy Statutes (Act), Section 35, and as amended by Public Act 13-247, An Act Implementing Provisions of the State Budget for the Biennium Ending June 30, 2015 Concerning General Government, Section 119, now codified at General Statutes of Connecticut (Conn. Gen. Stat.) §16-244u. The Act amended several conditions to the eligibility of the VNM program, the determination of VNM credits and the size of the program.

C. CONDUCT OF THE PROCEEDING

By Notice of Technical Meeting dated September 23, 2013, the Authority held a Technical Meeting in its offices on September 30, 2013, to discuss issues related to implementation of Section 35 of the Act. At this meeting the VNM working group (WG) was re-established to collaborately develop a revised VNM rider (Rider) to be submitted to the Authority by February 3, 2014. In addition, the WG would explore various issues related to the changes to the VNM program, administrative processes, and program specifications. On February 3, 2014, the EDCs filed their proposed updated VNM Riders. On February 18, 2014, the WG submitted a report (WG Report) that addressed steps necessary to implement Conn. Gen. Stat. §16-244u for the VNM of electricity.

By Notice of Request for Written Comments dated May 13, 2014, the Authority requested written comments on sections of the WG Report where members of the WG were unable to reach a consensus. Participants also were requested to comment on any other section of the WG Report. By Notice of Technical Meeting dated July 1, 2014, the Authority held a Technical Meeting in its offices on July 7, 2014, to discuss outstanding issues delineated in the proposed tariff riders and the WG Report. A draft Decision was issued on July 14, 2014. All participants were given the opportunity to file written exceptions to and present oral arguments concerning the instant draft Decision.

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D. PARTIES AND INTERVENORS OR PARTICIPANTS

A listing of participants to this proceeding is appended hereto as Appendix A.

II. POSITIONS OF PARTIES

The Authority was presented with a large base of information concerning expansion of the existing VNM legislation. This information was presented in the form of:

1. The WG report; 2. proposed tariff riders;3. written comments submitted by interested parties; and4. a technical meeting, which afforded an open and insightful dialog.

While the WG was able to reach consensus on many technical issues associated with VNM, a number of issues were still unresolved when the electric distribution companies (EDCs) filed their proposed tariff riders. Out of necessity, the proposed tariffs settle all issues according to program expectations of the EDCs.

III. AUTHORITY ANALYSIS

A. DESCRIPTION OF VIRTUAL NET METERING

VNM allows customers who operate renewable or combined heat and power generation (CHP) (Host) to assign surplus production from their generator to other metered accounts, (Beneficial Accounts) that are not physically connected to the Host’s generator. VNM provides financial incentives to encourage the installation of Class I and Class III generation in Connecticut.

Production from the generator is first used to reduce the electric consumption of the Host. Surplus production can then be assigned (virtually) to reduce the electric bill of one or more Beneficial Accounts. A monthly credit is calculated for surplus production. The credit is calculated using the generation charge and a portion of the Transmission and Distribution charges of the Host’s tariff. Each month the credit, if any, will be credited to beneficial accounts based on proportional consumption.

If the Host produces more kWhs than both the Host and Beneficial Accounts use in a billing period, then the excess kWhs, referred to as Unassigned VNM Credits, are saved and applied to future electric bills within the calendar year. Ultimately, any Unassigned VNM Credits that remain at the end of the calendar year are credited to the Host and possible beneficial accounts.

B. SUMMARY OF THE NEW VIRTUAL NET METERING PROGRAM

The new legislation expanded the existing VNM program in a number of areas stated below.

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1. In addition to municipalities, VNM is now available to state and agricultural customers.

2. In addition to just owning a VNM facility, non-agricultural hosts can now lease or enter into long-term contracts for VNM facilities.

3. In addition to generation costs, transmission and distribution charges will be included in the calculation of VNM credits using a three-year sliding percentage formula.

4. In addition to Class I renewable energy sources, Class III energy sources now qualify under the VNM program.

5. The program’s total credit cap was increased form $1 million to $10 million.6. The maximum size or the generator was increased from 2 MW to 3 MW.

While the instant Decision translates legislative intent into specific tariff language, the new formula used to value excess generation credits introduces inequitable pricing issues for ratepayers. The current VNM credit calculation relies on generation rates only. By modifying the existing calculation to include transmission and distribution rates, the overall ratepayer subsidy as well as the variability in subsidy between utilities and among tariffs is increased substantially. While the legislature clearly intended to subsidize the VNM program, relying on non-generation tariff components to calculate the subsidy introduces inequitable pricing among ratepayers. Essentially, the credits represent different price points paid for energy that fail to recognize any distinction in the underlying cost of generation. For example, solar and combined heat and power (CHP) installations served under the same utility tariff will receive the same credit per kWh even though the underlying cost of generation differs dramatically. The Authority will be addressing this issue and others within Phase II of Docket No. 13-01-26, PURA Generic Investigation of Electric Submetering, with the intent of standardizing electric generation charges across state programs.

C. ISSUES

1. Program Qualification Dates

The Authority in the Decision dated March 27, 2006, in Docket No. 05-07-17, DPUC Review of the Development of a Program to Provide Monetary Grants for Capital Costs of Customer-Side Distributed Resources, recognized the passage date of the underlying legislation as the commencement date of the program. Similarly, the effective date of the expanded VNM program is July 1, 2013. An applicant submitting an interconnection application on or after this date is entitled to participate in the expanded VNM program, assuming all other requirements are also satisfied. Applicants who submitted an interconnection application before this date, do not qualify for the new VNM programming regardless of their commercial operation status. Applicants currently in the new VNM program queue will have one year from the date of the final Decision in the instant docket to obtain commercial operation status. Applicants who would have qualified for the new VNM queue and have already obtained operational status will be entitled to new program credit treatment for consumption on or after the effective date that the proposed tariff riders are approved by the Authority.

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2. VNM Queue Qualification

Under the existing VNM program, an applicant can apply for VNM credits only after reaching commercial operation. To provide earlier assurance of a place in the acceptance queue, the EDCs proposed a new qualifying procedure. The proposed procedure begins with the host submitting an Interconnection Application followed by a VNM application.1 The VNM application will contain the information necessary for the utility to establish the correct VNM classification, calculate the annual maximum customer host credit and contain the preliminary review of the Interconnection Application. The applicant must also submit a power purchase agreement or other proof of commitment to receive or self-supply electricity. Assuming everything is in order and credits remain within the assigned sector’s credit cap, the applicant will be logged into the accepted VNM queue. Once accepted into the queue, the applicant then has one year from the in-service date stated in the VNM application to begin commercial operation. Failure to satisfy the one year deadline results in dismissal from the queue and VNM program and release of assigned credits.

The WG Report stated that although a general consensus was reached concerning the proposed qualification process, the one year commercial operation deadline is problematic for potential participants with lengthy approval timelines due to added permitting, licensing or siting requirements. The WG also considered establishing an appeal process before the Authority for an extension of time.

Based on the above, the Authority approves the proposed qualification process that has the VNM application at its core. The application must request all relevant information needed to properly qualify the applicant for calculating their maximum credit amount. It must also include preliminary interconnect results and proof of substantial commitment to receive or self-supply electricity. Applicants enter the queue once they have satisfied all EDC requirements and have been assigned an annual VNM cap by the company. The applicant then has one year from date of acceptance into the queue to obtain commercial operation. Failure to satisfy this deadline will result in immediate expulsion from the queue and application denial. The assigned credit cap will be freed to satisfy other applicants. Applicants may request a one-time, six-month extension of their queue termination date by paying a non-refundable fee equal to one-half of their annual credit cap.

Applicants facing an approval process that greatly exceeds one year will need to complete the time intensive processes before applying to Connecticut’s VNM program. While VNM affords benefit to business interests in and out of state, the program is first and foremost designed to benefit ratepayers, who are funding the large subsidies inherent in the program. Ratepayers should not be expected to wait for cleaner, cheaper and more reliable energy because of administrative inefficiencies. Once accepted in the VNM queue, any material change in the application will require submission of a new application. The existing queue position will be forfeited and the assigned credit cap will be freed to satisfy other applicants. Examples of material charge necessitating a new application are changes in generation type, capacity and location. The new application will be subject to available room in the VNM sector

1 The EDCs will design the application.

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budget. To prevent using re-applications in a poorly subscribed year as a means of extending the one year commercial operation date requirement, a non-refundable re-application fee equal to one-half of the new annual credit cap will be required.

3. Interconnection System Improvements

The Authority is concerned that the proliferation of three MW generation facilities introduced into the middle of established circuits at potentially less than ideal junction points could require system improvements that extend beyond just upgrading the local site transformer. The EDCs will be expected to properly identify all material, marginal system enhancement expenses associated with the introduction of a new generator and bill the applicant accordingly.

4. Host Definitions

Conn. Gen Stat. Section 16-244u(2) states that “Customer host means an in-state retail end user of an electric distribution company that owns, leases or enters into a long-term contract for a virtual net metering facility and participates in virtual net metering.” Conn. Gen. Stat. §16-244u(3) states that “Agricultural customer host means an in-state retail end user of an electric distribution company that uses electricity for the purpose of agriculture, as defined in subsection (q) of section 1-1, owns an agricultural virtual net metering facility and participates in virtual net metering.

The Authority understands these definitions to mean that only municipal, state or agricultural customers qualify as customer hosts. Further, agricultural customer hosts must own their VNM facility and leasing or contract arrangements are not available to them.

5. Aggregation

Conn. Gen. Stat. §16-244u(8)(g) states that “A municipal, state or agricultural customer host shall be allowed to aggregate all electric meters that are billable to such customer host.” Conn. Gen. Stat. §16-244u(8)(d) states in part that an agricultural host shall not designate more than ten beneficial accounts each of which shall (1) use electricity for the purpose of agriculture; (2) be a municipality; or (3) be a noncommercial critical facility.

The process of aggregating billable accounts of the host was of paramount concern to representatives of the agricultural community. Host aggregation is seen as a means to enlarge the host’s proportional size relative to nonagricultural beneficial accounts while also preventing related farm accounts from counting as a beneficial count. For example, a farm with multiple separately metered facilities spread over miles will receive separate electric bills for each facility. Without host aggregation, one location would be designated as host and the others would be designated as beneficial accounts up to the cap of ten. If unused beneficial accounts remained, municipal or noncommercial critical facilities could be designated as beneficial accounts. With host aggregation, all accounts billable to the farm, presumably, would be summed under the host leaving all ten beneficial accounts available to service municipal and noncommercial critical facilities.

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The WG Report was not clear on the meaning of host aggregation. The Authority is also unclear how unlimited host aggregation is meant to work within a program that sets sector participation caps. If host aggregation was limited to agriculture, the Authority possibly could construct a beneficial result. Allowing host aggregation for state and municipal accounts creates the greatest quandary. Clearly the state has enough electric accounts that it could aggregate a host load equal to the capacity of any size generation it chose to construct. Doing this, of course, eliminates beneficial accounts altogether. Is this an intended result or an unforeseen consequence of a complex program?

The Authority will request further legislative guidance concerning the proper role of VNM host aggregation before its use can be approved. However, to provide immediate assistance to Connecticut agriculture, the Authority will direct the EDCs to work with host accounts to reassign annual unassigned bill credits among host-related accounts. This will allow the host to design2 an annual unassigned credit that can then be shared among host-related accounts. Additionally, all VNM participants, hosts, beneficial accounts, generation developers and operational companies, are always free to make private arrangements that redefine benefit sharing.

In the WG Report, the EDCs suggested that totalized accounts should be allowed to participate in VNM. The Authority agrees with the EDCs’ conclusion that aggregation should apply to totalized accounts. A totalized account aggregates several meter reads into one for billing purposes through a single tariff to accommodate a complex service configuration. Totalization is neither virtual nor aggregation as applied in the VNM program. A totalized account is eligible to apply for VNM.

6. Generator Location

Although neither the existing VNM rider nor new legislation speaks to physical location, the EDCs have proposed tariff language requiring generation to be located behind an EDC revenue meter. Other parties have argued that this requirement will impede optimal land utilization3 and site selection for CHP facilities interested in minimizing thermal transport.

The Authority finds that the EDCs’ proposal is completely logical and utilitarian. This is a “net metering” program, which typically involves physical proximity of EDC and generation metering. Additionally, since credits are based on the host’s tariff, a behind-the-meter requirement identifies the appropriate tariff. From the applicant’s perspective, host selection is complicated because many competing issues are in play. The behind-the-meter requirement requires a VNM applicant to make an interwoven choice concerning:

1. host account;2. generator type and capacity; 3. site applicability; and

2 Setting aggregate beneficial load under the sum of generation capacity and host load will generate an annual unassigned credit that will be paid to the host account in the form of a bill credit.

3 Solar installations at brownfield sites will be precluded because such sites lack electrical service.

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4. beneficial load.

Host selection determines the tariff used to establish both the level of excess generation and kWh rate for calculating credits. Selection of a small residential account will maximize both the rate4 used to calculate credits and the level of excess generation. Selecting a large industrial account will typically have the opposite effect 5. Since the choice of host so heavily impacts project financing, generation type and capacity choices are limited by host selection. Conversely, given a starting generation choice, host selection determines financial viability. Of course, generation choice and host selection also depend on the availability of appropriate site requirements. CHP installations face the added tradeoff of attempting to minimize thermal energy transport while maximizing project revenues. Ultimately, beneficial account selection impacts the choice of generation capacity. Excess generation and aggregate beneficial account load need to be balanced because annual unassigned credits are returned to the host as a utility bill credit, as opposed to being cashed out annually.

While the EDCs behind-the-meter requirement eliminates tariff selection for them, it will lead to less than optimum location choices6 for applicants and Connecticut citizens. Aside from supporting distributed generation (DG) growth, the VNM can expand its value to Connecticut by improving land utilization. In a virtual world, the EDCs can associate any account with a generator and perform the requisite net billing calculations. While the elimination of a physical proximity requirement through virtual netting allows for optimum site location, it does not address tariff choice. A major flaw in the VNM program is that credit value is tariff determined. Regardless, tariff choice is required as the program currently exists. Consequently, to support optimum land use while also precluding shoddy workarounds, the Authority will allow virtual netting when new generation is sited at a location that lacks an electric account such as the brownfield situation. In these cases, the Authority will decide tariff selection through the following formula.

Applicants choosing virtual netting will be required to submit a beneficial account list as a part of their initial application process. The EDCs will select the least expensive tariff7 associated with a beneficial account on the list as the virtual netting account. This account will then be used for calculating credits for the applicant throughout the applicant’s involvement in the program. This account will also determine excess generation. Should the list of beneficial accounts change, a new least expensive virtual account will be selected by the EDCs. While not ideal, even the least expensive tariff should match if not surpass subsidies offered by other states. Connecticut already has

4 Monthly credits are based in part on the average distribution rate per kWh, which is typically the greatest for residential tariffs.

5 Depending on an account’s load factor and peak day demand, it is possible for a poor load factor, small volume commercial or industrial account to surpass the average residential kWh rate.

6 As mentioned, brownfields are precluded from consideration because they lack a host account. One solution would be to construct a small shed to act as host. This would provide a residential rate and result in almost 100% excess generation. However, forced workarounds like this need to be avoided. The fact that they exist at all speaks to the complexity of the VNM program.

7 Least expensive means smallest annual overall distribution cost per kWh, calculated using the accounts actual consumption history. The EDCs will forecast sales for accounts with less than a full 12 months of actual consumption history.

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some of the highest electric rates in the nation. If DG can be financed in other states, it surely can be financed using Connecticut rates.

The behind-the-meter option offered by the EDCs is still available. In addition, the Authority is offering an alternative approach that frees locational decisions 8 to improve land utilization by a municipality, state or agricultural host in return for least cost beneficial account pricing. The Authority expects that new legislation will address this alternative.

7. Supplier Load Settlement

The issue of supplier load settlement impacts suppliers and involves the development of a billing mechanism that will reconcile hourly meter reading by the Independent System Operator – Northeast (ISO-NE) with monthly EDC meter reading. The WG was unable to reach a resolution for this very technical issue. The Authority will direct the EDCs to establish a new working group to address this issue and report back to the Authority.

8. Unassigned Compensation

The EDCs have proposed extending the present VNM practice of providing annual unassigned compensation in the form of a credit to the host’s electric bill. This practice results in a balancing of generation capacity and aggregate beneficial load because capacity oversizing does not pay. If the annual unassigned credit was cashed out, three MW generators would proliferate behind minimal load hosts with only one, if any, beneficial account. To maximize profit, 24/7 capable generation would be installed over solar and wind leading to the ironic situation where ratepayers pay premium subsidies to out-of-state developers for dirty generation in Connecticut.9 This added generation could unintentionally throttle cleaner generation located in Connecticut or throughout the ISO-NE territory. Based on the aforementioned, the Authority supports the EDCs’ unassigned compensation proposal.

9. Tariff Language

8 Generators must be newly constructed in Connecticut to be considered for virtual net metering and serve the electrical needs of its virtual customer host and associated beneficial accounts.

9 In comparison to intermittent solar and wind, CHP and fuel cells are 24/7 capable but dirtier.

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The following discussion refers to CL&P’s and UI’s proposed tariff riders, which share almost identical language.

The “Agricultural Benefit Account” definitional paragraph requires the word “or” to be inserted before subdivision (2).

The “Agricultural Customer Host” definitional paragraph needs to remove the lease and long-term contract option. Agricultural hosts can only own VNM facilities.

Definitions for “Municipal Beneficial Account” and “non-commercial critical facility” must explain that they also qualify as an agricultural beneficial account.

The qualification and explanation of service explanation needs to replace the reference to guidelines approved by the PURA with the actual guidelines established in this proceeding.

The new customer terms introduced by the EDCs to clarify the tariff riders are appropriate as defined.

The EDCs should work together to replicate language in their respective tariff riders to the maximum extent possible.

IV. FINDINGS OF FACT

1. The Authority was presented with a large base of information concerning expansion of the existing VNM legislation, which included the WG Report; proposed tariff riders; written comments submitted by interested parties; and a technical meeting, which afforded an open and insightful dialog.

2. While the WG was able to reach consensus on many technical issues associated with VNM, a number of issues were still unresolved when the EDCs filed their proposed tariff riders.

3. New legislation expanded the existing VNM program in a number of areas.

4. The new formula used to value excess generation credits introduces inequitable pricing issues for ratepayers.

5. The current VNM credit calculation relies on generation rates only.

6. By modifying the existing calculation to include transmission and distribution rates, the overall ratepayer subsidy as well as the variability in subsidy between utilities and among tariffs is increased substantially.

7. While the legislature clearly intended to subsidize the VNM program, relying on non-generation tariff components to calculate the subsidy introduces inequitable pricing among ratepayers.

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8. The credits represent different price points paid for energy that fail to recognize any distinction in the underlying cost of generation.

9. The effective date of the expanded VNM program is July 1, 2013.

10. An applicant submitting an interconnection application on or after July 1, 2013, is entitled to participate in the expanded VNM program, assuming all other requirements are also satisfied.

11. Applicants who submitted an interconnection application before July 1, 2013, do not qualify for the new VNM programming regardless of their commercial operation status.

12. Applicants currently in the new VNM program queue will have one year from the date of the final Decision in the instant docket to obtain commercial operation status.

13. Applicants who would have qualified for the new VNM queue and have already obtained operational status will be entitled to new program credit treatment for consumption on or after July 21, 2014, the effective date that the proposed tariff riders were approved by the Authority.

14. Under the existing VNM program, an applicant can apply for VNM credits only after reaching commercial operation.

15. Ratepayers should not be expected to wait for cleaner, cheaper and more reliable energy because of administrative inefficiencies.

16. The proliferation of three MW generation facilities introduced into the middle of established circuits at potentially less than ideal junction points could require system improvements that extend beyond just upgrading the local site transformer.

17. Only municipal, state or agricultural customers qualify as customer hosts. Further, agricultural customer hosts must own their VNM facility and leasing or contract arrangements are not available to them.

18. The process of aggregating billable accounts of the host was of paramount concern to representatives of the agricultural community.

19. Host aggregation is seen as a means to enlarge the host’s proportional size relative to nonagricultural beneficial accounts while also preventing related farm accounts from counting as a beneficial count.

20. With host aggregation, all accounts billable to the farm, presumably, would be summed under the host leaving all ten beneficial accounts available to service municipal and noncommercial critical facilities.

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21. The WG Report was not clear on the meaning of host aggregation.

22. It is unclear to the Authority how unlimited host aggregation is meant to work within a program that sets sector participation caps.

23. Allowing host aggregation for state and municipal accounts creates the greatest quandary for the Authority.

24. The state has enough electric accounts that it could aggregate a host load equal to the capacity of any size generation it chose to construct.

25. A totalized account aggregates several meter reads into one for billing purposes through a single tariff to accommodate a complex service configuration.

26. A totalized account is neither virtual nor aggregation as applied in the VNM program and is eligible to apply for VNM.

27. The EDCs’ proposal requiring generation to be located behind an EDC revenue meter is completely logical and utilitarian.

28. A “net metering” program typically involves physical proximity of EDC and generation metering.

29. Since credits are based on the host’s tariff, a behind-the-meter requirement identifies the appropriate tariff.

30. From the applicant’s perspective, host selection is complicated because many competing issues are in play.

31. The behind-the-meter requirement requires a VNM applicant to make an interwoven choice concerning: host account; generator type and capacity; site applicability; and beneficial load.

32. Host selection determines the tariff used to establish both the level of excess generation and kWh rate for calculating credits.

33. Selection of a small residential account will maximize both the rate used to calculate credits and the level of excess generation and selecting a large industrial account will typically have the opposite effect.

34. Since the choice of host so heavily impacts project financing, generation type and capacity choices are limited by host selection; conversely, given a starting generation choice, host selection determines financial viability.

35. Generation choice and host selection depend on the availability of appropriate site requirements.

36. CHP installations face the added tradeoff of attempting to minimize thermal energy transport while maximizing project revenues.

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37. Ultimately, beneficial account selection impacts the choice of generation capacity.

38. Excess generation and aggregate beneficial account load need to be balanced because annual unassigned credits are returned to the host as a utility bill credit, as opposed to being cashed out annually.

39. While the EDCs behind-the-meter requirement eliminates tariff selection for them, it will lead to less than optimum location choices for applicants and Connecticut citizens.

40. Aside from supporting DG growth, the VNM can expand its value to Connecticut by improving land utilization.

41. In a virtual world, the EDCs can associate any account with a generator and perform the requisite net billing calculations.

42. While the elimination of a physical proximity requirement through virtual netting allows for optimum site location, it does not address tariff choice.

43. A major flaw in the VNM program is that credit value is tariff determined.

44. The WG was unable to reach a resolution for the supplier load settlement issue.

45. Extending the present VNM practice of providing annual unassigned compensation in the form of a credit to the host’s electric bill results in a balancing of generation capacity and aggregate beneficial load because capacity oversizing does not pay.

46. If the annual unassigned credit was cashed out, three MW generators would proliferate behind minimal load hosts with only one, if any, beneficial account.

V. CONCLUSION AND ORDERS

A. CONCLUSION

In the instant Decision, the Authority approves the EDC tariff riders with modification that implement the new VNM program, which was designed in accordance with legislative intent. While the Authority will require further legislative guidance concerning the issue of host aggregation, it did provide a workaround that will allow Connecticut’s agricultural sector to enjoy VNM immediately, as opposed to waiting for another legislative cycle to unfold. To this end, the EDCs will allow host accounts to reassign a bill credit among related host accounts once annually. To accommodate optimal land utilization, especially brownfields, the Authority created “virtual netting,” which allows for the physical separation of host and generation sites. The Authority intends to conduct its own investigation concerning proper generation pricing with the intent of standardizing renewable electric generation charges across state programs.

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B. ORDERS

For the following Orders, submit one original of the required documentation to the Executive Secretary, 10 Franklin Square, New Britain, Connecticut 06051 and file an electronic version through the PURA’s website at www.ct.gov/pura. Submissions filed in compliance with the PURA’s Orders must be identified by all three of the following: Docket Number, Title and Order Number.

1. No later than July 28, 2014, each EDC shall file with the Authority for approval, five complete sets of VNM tariff riders, scored and unscored, that incorporate all tariff and rate changes described herein.

2. No later than September 2, 2014, each EDC will file with the Authority a copy of their respective VNM applications for informational purposes.

3. No later than October 1, 2014, the EDCs shall establish a working group to address the Supplier Load Settlement issue and report back to the Authority as to its resolution no later than January 20, 2015.

APPENDIX A – Service List

DOCKET NO. PURA Development of the Administrative Processes andProgram Specifications for Virtual Net Metering

This Decision is adopted by the following Commissioners:

Michael A. Caron

Arthur H. House

John W. Betkoski, III

CERTIFICATE OF SERVICE

The foregoing is a true and correct copy of the Decision issued by the Public Utilities Regulatory Authority, State of Connecticut, and was forwarded by Certified Mail to all parties of record in this proceeding on the date indicated.

7/22/14Nicholas E. Neeley DateActing Executive SecretaryPublic Utilities Regulatory Authority