DEEP: DEEP Announces Action on Energy Procurement RFPs

2016 Press Release
 
October 25, 2016
 
DEEP Announces Action on Energy Procurement RFPs:
Natural Gas RFP Canceled
Clean Energy Projects Selected to Move to Next Stage
 
Connecticut’s Department of Energy and Environmental Protection (DEEP) today announced a series of actions related to three Requests for Proposals (RFPs) for the procurement of energy resources that can help to reduce our dependence on natural gas generation, and keep the state on track to meet our commitments to reduce carbon emissions and support renewable generation.
 
The actions include:
  • Natural Gas RFP –  DEEP is canceling an RFP that sought proposals for natural gas resources, including liquefied natural gas, natural gas pipeline capacity and natural gas storage.
The Notice of the Cancellation of the Natural Gas RFP has been posted here.
  • Three State Clean Energy RFP – DEEP has selected projects submitted in response to an RFP issued jointly by Connecticut, Massachusetts, and Rhode Island for large-scale hydropower, Class I renewables above 20 megawatts (MW) in size, and associated transmission. The selected projects will now advance to negotiate power purchase contracts with Connecticut’s two electric distribution companies – Eversource and United illuminating (UI), and will be subject to regulatory approval by Public Utilities Regulatory Authority (PURA).
A listing of the bidders/projects selected to move forward in the Three State RFP has been posted here.
  • Small Resources Clean Energy RFP – This week, DEEP expects to select projects submitted in response to an RFP issued for small-scale clean energy projects, including Class I renewables 2-20 MW in size, energy efficiency, and energy storage.  Once selected, the projects will advance to power purchase contract negotiations with Eversource and UI, and will be subject to regulatory approval by PURA.
“Our actions on the three energy procurement RFPs will protect the interests of Connecticut’s ratepayers while moving our state forward to best address the energy challenges that we face,” said DEEP Commissioner Robert Klee.  “While we are not selecting projects under the natural gas RFP at this time, we are taking steps to secure additional clean energy resources that address gaps in our energy infrastructure.  Bringing these projects online will also play a real part in helping us achieve this state’s carbon reduction targets for 2020 and beyond, which will continue Connecticut’s leadership in efforts to address Climate Change.” 
 
Cancellation of Natural Gas RFP
 
As authorized by Public Act 15-107, DEEP issued an RFP for natural gas resources on June 2, 2016, seeking to procure natural gas resources to be utilized by natural gas generators in the New England region to improve the affordability and reliability of regional electric supply.  The RFP was open to incremental natural gas pipeline capacity, LNG, and natural gas storage.  Seven bids were submitted into this RFP.
 
While the evaluation of bids was underway at DEEP, administrative decisions and a court ruling in other New England states limited the likelihood that the costs of projects would be shared among a substantial portion of the region’s ratepayers. DEEP has consistently asserted that the problem of inadequate gas infrastructure is greater than one state can solve alone. Regional investment is necessary to ensure that no one state disproportionately bears the costs of addressing what is a problem endemic to our regional electric system.  As a result, DEEP moved to cancel this RFP.
 
DEEP does, however, retain its authority to issue future RFPs to procure natural gas resources as needed to provide more reliable electric service for the benefit of the state’s electric ratepayers and to meet Connecticut’s energy and environmental goals and policies. DEEP will monitor conditions in the ISO New England market and proceedings of other New England states to determine whether to reissue this gas RFP.
 
Clean Energy RFPs
 
This week, Connecticut DEEP is making selection decisions on two RFPs for clean energy projects that can help to reduce our dependence on natural gas generation, and keep the state on track to meet our commitments to reduce carbon emissions and support renewable generation. 
  • Connecticut DEEP joined with Massachusetts and Rhode Island in requesting bids for long-term contracts for large-scale hydropower, Class I renewables projects greater than 20 megawatts in size, and transmission projects needed to deliver those resources to the New England grid.  Projects with co-located energy storage and renewables balanced with existing hydropower were also eligible to respond to the so-called Three State RFP.  More than 50 bids were submitted into the Three State RFP in January 2016 including six transmission projects to deliver clean energy from Maine, Canada and New York.
  • Connecticut DEEP issued a companion “small resources” clean energy RFP for long term contracts for Class I renewables under 20 MW and energy efficiency and energy storage projects of any size.  More than 100 bids were submitted into the Small Resources Clean Energy RFP on May 4, 2016, including 82 bids for projects located in Connecticut.
 
After an extensive evaluation process, which took into account both quantitative (price) and qualitative factors as directed by statute, DEEP is completing its selection of the projects in both RFPs that will be allowed to advance to contract negotiations with the two Connecticut electric distribution companies.  All bidders in the Three State RFP have been contacted as of October 24, 2016 regarding their proposals.  All bidders in the Small Resources RFP will be contacted no later than October 28, 2016 regarding their proposals. 
 
A final decision, reflecting the basis for DEEP’s selection as well as the results of the two clean-energy RFPs (including pricing, quantity, and identity of contracted projects) will be submitted to the Public Utilities Regulatory Authority after the conclusion of contract negotiations, expected in early 2017.
 
An updated timeline for the Three State RFP has been posted here.
 
Background on the RFPs
 
The RFPs are authorized under Public Act 15-107, which, together with an earlier statute, Public Act 13-303, authorizes the Department to seek proposals from a broad range of resources to help address energy infrastructure constraints in New England.  Collectively, under these two Public Acts, DEEP has the authority to select clean energy projects to meet up to 15% of the state’s electric demand, and natural gas resources of at most 375,000 mmcf/day.