March 18, 2013
Restructuring of Renewable Portfolio Standard Provides
More Balanced and Flexible Approach to Clean Energy
Improvements will make RPS consistent with overall energy goals:
cheaper, cleaner, more reliable power
A draft study issued by Connecticut’s Department of Energy and Environmental Protection (DEEP) recommends restructuring the state’s Renewable Portfolio Standard (RPS) to provide a more balanced and flexible approach – allowing Connecticut to make renewable power a larger share of its energy mix while holding down electricity costs for families and businesses.
“Implementing the recommendations of this study will align Connecticut’s 15-year-old RPS strategy with our latest energy initiatives and Governor Malloy’s effort to bring cheaper, cleaner, and more reliable power to our state,” said DEEP Commissioner Daniel C. Esty. “Our new RPS strategy focuses on innovative approaches that minimize costs for electric ratepayers, while bringing us the benefits of cleaner air, a more diverse and reliable power supply, and support for in-state projects that grow our economy and create jobs right here in our state.”
The recommendations of the draft study are consistent with legislation concerning the RPS – Proposed Substitute Bill No. 1138 – that will be the subject of a public hearing Tuesday before the General Assembly’s Energy and Technology Committee.
A key recommendation of the DEEP study is to amend the current RPS to increase the total Class I renewable target – boosting the current 20% required in 2020 up to 25% by 2025 – and to allow the state to run a competitive bid process to buy a portion – 7.5% by 2025 – of the energy needed to meet this target. This “contracted tier” is designed bring down the overall ratepayer cost of the RPS while preserving support for renewable development in Connecticut and across the region.
Under DEEP’s draft proposal, all Class I renewables could compete for power contracts—based on price—in the “contracted tier.” DEEP recommends that large-scale hydroelectric projects of greater than 30 Megawatts should also be allowed to qualify as a Class I renewable and compete within the “contracted tier” only.
Additional Key Recommendation of Study
Another key element of the draft DEEP study would phase out subsidies for older biomass plants and landfill gas that do not provide optimal economic or environmental benefits.
“A gradual phase-in of more stringent standards will ensure that these plants would qualify as Class I or allow their replacement with newer, cleaner resources,” said Commissioner Esty. “Our analysis shows that a total of 75% of Connecticut ratepayer’s investment in Class I resources is currently going to support biomass plants located primarily in Maine and New Hampshire. These plants are among the least “clean” Class I resources and because many were already in operation when the RPS was enacted they do not necessarily meet the goal of displacing fossil fuel generation.”
Public Process for Comment
DEEP invites public comment on the draft study during a 30-day public comment period. DEEP will hold a public hearing and a technical meeting on the draft study to take questions and comments on its analysis and recommendations. The study will then be finalized and submitted to the General Assembly. DEEP will also work closely with the Administration and legislative leaders to make certain any refinements of the study are considered in the drafting of final legislation this session.
Connecticut first adopted a RPS in 1998, creating a financial incentive for developers to bring renewable energy projects online, by requiring electricity providers to purchase set quantities of renewable energy from them. Under Connecticut’s RPS, electricity providers who serve retail customers in Connecticut must obtain a certain percentage of the energy they sell to their Connecticut customers from three categories, or “classes,” of renewable energy. Every state in New England – with the exception of Vermont – has an RPS.