DEEP: Affordable and Reliable Electricity Procurement

Affordable and Reliable Electricity Procurement
 
Due to limitations in the design of our deregulated electricity market, gas fired power plants—which now account for more than half of the region’s electricity mix—are not contracting for the gas pipeline capacity needed to run reliably in the winter. As a result, the price of natural gas delivered into New England has increased sharply during cold winter months, and this in turn is increasing the risk of blackouts and driving up electricity generation prices and carbon emissions in Connecticut and across the region.

In December 2013, the Governors of the six New England states committed to an energy initiative to support “more thoughtful and strategic investments” in the regional energy mix in a way that reduces energy costs, increases economic development, and improves air quality. In April 2015, the Governors of the New England states re-committed to coordinating and implementing solutions to address the region’s energy challenges. In March 2015, DEEP released its 2014 Integrated Resources Plan for Connecticut (2014 IRP), which is a biennial plan that assesses the state’s future electric needs and plans to meet those needs with both demand-side resources and supply-side resources. The 2014 IRP recommended competitive procurement open to a broad range of resources—including gas infrastructure, clean energy generation, and measures that reduce electricity demand—to relieve the region’s natural gas infrastructure constraints, ultimately improving winter reliability and reducing generation costs.

In June 2015, the Connecticut General Assembly passed and Governor Malloy signed into law Public Act 15-107, An Act Concerning Affordable and Reliable Energy, which authorizes the Commissioner of DEEP, in consultation with the state’s procurement manager, the Office of Consumer Counsel, and the Attorney General, to issue multiple solicitations—either alone or in coordination with other New England states—for long-term contracts from providers of resources that can provide Connecticut’s reasonable share of the investments New England needs to address the gas infrastructure challenge.

The Act establishes three categories of resources eligible to compete in solicitations issued pursuant to Sections 1(b), (c), and (d) of the Act, including passive demand response measures, Class I renewable energy sources, Class III sources, verifiable large-scale hydropower, interstate natural gas transportation capacity, liquefied natural gas, liquefied natural gas storage, and natural gas storage. Additionally, the Act gives DEEP discretion to solicit proposals for energy storage systems and Class I renewable energy sources paired with Class II renewable energy sources or existing hydropower.

On August 31, 2015, DEEP initiated three proceedings to implement the Act and issued a notice and request for comment outlining the sequence of implementation and evaluation process for the solicitations. DEEP accepted public comment on this notice through September 30, 2015.

On November 12, 2015, DEEP released a final Request for Proposals seeking bids for Class I renewable energy sources that are 20 MW or more and large-scale hydropower under Section 1(c) of the Act and Sections 6 and 7 of Public Act 13-303. A bidders conference was held on December 3, 2015. Bids were accepted under this solicitation until January 28, 2016. Public versions of the bids submitted are available online.

On December 22, 2015, DEEP released a draft Request for Proposals for public comment seeking bids for Class I renewable energy sources and Class III energy sources between 2 MW and 20 MW, energy efficiency, and energy storage systems under Section 1(b) of the Act. DEEP accepted public comment on the draft through January 14, 2016. On March 9, 2016, DEEP released the final Request for Proposals and is accepting proposals through May 4, 2016. A Bidders’ Conference will be held on March 24, 2016.

Also on March 9, 2016, DEEP released a draft Request for Proposals for public comment seeking bids for natural gas resources under Section 1(d) of the Act. DEEP is accepting public comment on this draft through March 29, 2016.