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Renewable Energy Policy Game
Changers: 2013 Legislative Update
CBIA Environmental & Energy
2013 Conference
Paul R. Michaud, Esq.
860-240-6131 | [email protected]
June 19, 2013
Key Provisions
1. Property Tax Exemption (S.B. 203) (P.A. 13-61 S. 1)
2. Renewable Energy Facility RFPs (S.B. 1138 S. 6, 7
and 8)
3. Virtual Net Metering (H.B. 6360 S. 35)
4. Submetering (H.B. 6360 S. 36)
5. Microgrids and Rights of Way (H.B. 6360 S. 34, 39 and
40)
6. CHP Program (H.B. 6360 S. 59)
Property Tax Exemption –
• For Systems Installed Between January 1, 2010 and
December 31, 2013:
Class I, Class II hydropower or solar thermal
Behind the commercial or industrial customer meter
Nameplate capacity does not exceed the location’s load
Local municipality may opt to abate up to 100% of the property
taxes
Property Tax Exemption – continued
“New Haven Rule”
• For Systems Installed On or After January 1, 2010
Class I, Class II hydropower or solar thermal
Behind the commercial or industrial customer meter
Nameplate capacity does not exceed the location’s load
Distressed municipality – pop. 125,000 to 135,000
Property Tax Exemption – 100%
Property Tax Exemption – continued
• For Systems Installed On or After January 1, 2014:
Class I, Class II hydropower or solar thermal
Behind the commercial or industrial customer meter
Nameplate capacity does not exceed the location’s load
Property tax exemption – 100%
The term “installed” not defined in the statute
New Class I Renewable Energy
Facilities RFP
• For Class I Facilities constructed on or after January 1, 2013
• State solicitation for new Class I facilities allowed if:
In the ratepayers’ interest; and
Consistent with State policy goals in the Comprehensive Energy
Strategy
• Up to 4% of the power that is distributed by the utilities to their
standard offer customers may be procured
• Up to 20-year “bundled” bilateral contract
• All contracts must be reviewed and approved by the Public Utilities
Regulatory Authority
Existing Class I and Large-
Scale Hydropower RFP
• State solicitation for Class I facilities or large scale
hydropower is allowed if:
In the ratepayers’ interest;
Consistent with State policy goals in the Comprehensive Energy
Strategy; and
In accordance with the State’s energy policy goals
• Up to 5% of the power that is distributed by the utilities to
their standard offer customers may be procured
Existing Class I and Large
Scale Hydropower RFP- continued
• Class I Facilities:
The facility must have been constructed before January 1, 2013
Up to a 20-year “bundled” bilateral contract
All contracts must be reviewed and approved by the Public Utilities Regulatory
Authority
• Large Scale Hydropower:
The facility must have been operational on or after January 1, 2003
The facility must be located in New Brunswick, New England, New York,
Quebec, Labrador or Newfoundland
The facility must be able to deliver power to the NEPOOL GIS
The facility must be greater than 30 MW
Up to a 15-year “bundled” bilateral contract
All contracts must be reviewed and approved by the Public Utilities Regulatory
Authority
Run-of-the-River Hydropower,
Landfill Gas and Biomass RFP
• Starting on or after October 1, 2013
• DEEP may issue a request for proposals (RFP) for run-
of-the-river hydropower, landfill methane gas and
biomass projects
• Up to 4% of the distribution company’s load
• 10-year “bundled” bilateral contracts with the distribution
companies
• All contracts must be reviewed and approved by the
Public Utilities Regulatory Authority
Run-of-the-River Hydropower,
Landfill Gas and Biomass RFP -continued
• Project Proposal Eligibility Criteria:
Ratepayers’ interest
Facility’s emissions profile
RECs already received by the facility
Economic development benefits
Consistent with:
• State’s policy goals in Comprehensive Energy Strategy
• State’s greenhouse gas emissions reduction goals
Virtual Net Metering
• Applies to municipalities, State & agricultural customer hosts
• VNM facilities can be sized up to 3 MW
• Customer host account aggregation allowed
• VNM facility must be at the agricultural host Site = yes
• VNM facility must be at the State and municipality host site = maybe
not
• $10,000,000 VNM money cap (annual)
No more than 40% of the cap can go to any municipal, state agency or
agricultural customer host in the aggregate.
Virtual Net Metering – continued
• Virtual Net Metering Bill Credit
Generation Service Charge (GSC)
• 100% allocation based on energy produced by the renewable
energy system
Distribution & Transmission Charges (D&T)
• 80% allocation until July 1, 2014
• 60% allocation from July 2, 2014 through July 1, 2015
• 40% allocation starting on and after July 2, 2015
Virtual Net Metering – continued
Host
Fire Station200 kW
Town Library50 kW
Police Station200 kW
Middle School600 kW
Town Hall50 kW
High School900 kW
Customer Host:
- High School
Beneficial Accounts:
- Town Hall
- Fire Station
- Town Library
- Policy Station
- Middle School
2,000 kW solar array
Virtual Net Metering – continued
• Municipal & State Customer Hosts:
VNM facility can be a Class I Renewable Resource
VNM facility can be a Class III Renewable Resource
(cogeneration)
Customer host can own, lease or enter into a long-term contract
(Power Purchase Agreement) for the VNM facility
Generally, customer hosts can serve up to 5 beneficial accounts
• Microgrid exception:
– Customer Host can serve an additional 5 non-municipal and non-state
“critical facility” accounts if connected to the microgrid
Virtual Net Metering – continued
• Agricultural Customer Hosts:
VNM facility can be a Class I Resource
VNM facility can not be a Class III Renewable Resource
Customer must own the VNM Facility
Customer host can serve up to 10 beneficial accounts, including:
• Agricultural accounts;
• Municipal accounts; and
• Non-commercial “critical facilities” connected to microgrid
Submetering – background
• What is submetering?
• Submetering has been traditionally allowed only at
campgrounds and slips at marinas
• Why submeter?
Getting behind one meter instead of dozens (e.g. large
apartment buildings)
Holds end users financially accountable for their usage
• Contrast Master Metering
New Submetering Rules
• Submetering is now allowed for Commercial Buildings,
Industrial Buildings, Multi-Family Residential, and Mixed-
Use buildings where the electric power or thermal energy
is provided by a Class I renewable source
• Each submetering project must be approved by the
Public Utilities Regulatory Authority (PURA)
• Each submetering entity must provide electricity
produced by the Class I facility to customers at a rate no
greater than the rate charged to the customer class from
the service territory where the facility is located
Microgrids & Rights of Way
• Energy Improvement Districts can now own, lease, or finance
microgrids (but see public street issues below)
• Public Utilities Regulatory Authority must authorize an entity to
independently distribute electricity across a public highway or
street if:
The entity is a municipality, state or federal government;
The entity owns, leases or operates the energy source;
The energy source is connected to a microgrid;
Class I and Class III energy sources can be any size; Other
energy sources can be under 5 MW; and
The energy source meets applicable interconnection standards
CHP Program
• DEEP Pilot Program for CHP (cogeneration) Systems (20 MW)
• Eliminates the Demand Charge Ratchet imposed by the utilities as a result
of System outages for 10 years
• Eligibility:
CHP System must provide electricity and heat to a commercial,
industrial or residential facility;
CHP System must have a nameplate capacity of between 500 kW and 5
MW; and
CHP System must have been placed into service between January 1,
2012 and January 1, 2015
CHP System must not be eligible for CEFIA’s Pilot CHP funding
program
CHP Program Details
• Exemption from distribution demand charges
No ratchet
Pro rate demand charges for outages greater than 3
hours
• Data reporting obligations during pilot
• PURA to evaluate expansion to all CHP
Thank You!
Questions?