Bill to Address RPS Impact on Energy Rates Revised
A new version of an important bill designed to stem the impact of Connecticut’s Renewable Portfolio Standards (RPS) on Connecticut’s electric prices emerged this week at the Capitol.
SB 1138, as originally drafted, would have allowed Connecticut to avoid energy price increases associated with its inability to meet the state’s overly-aggressive RPS, which are forcing rate increases because not enough “Class 1” renewable energy is available to meet them – at any price.
Consequently, energy customers are feeling the effects of financial penalties that are built into the RPS and will only worsen in the coming years.
The original version of SB 1138 would have achieved Connecticut’s environmental and economic goals by allowing, beginning next January, the use of clean, affordable large-scale hydropower from Quebec to help meet the Class 1 RPS standards.
The new version of the bill gives the Department of Energy and Environmental Protection (DEEP) the discretion to authorize large-scale hydropower to count towards Class 1 RPS compliance only after Jan. 1, 2016 and only in the event that three triggers are satisfied:
- A sustained shortage of existing Class I eligible supply forces electricity suppliers pay the RPS penalty
- DEEP determines that no suppliers paid the penalty intentionally or inadvertently when there was Class I supply available
- DEEP forecasts that there is not likely to be new Class I supply available to meet the shortfall available in the coming year.
Only if these three conditions occur, may DEEP allow up to 1% of the Class I target for the succeeding compliance years to be filled by the large-scale hydropower. Overall, no more than 5% of the Class I target can be filled by large-scale hydro by 2020.
It is clear that the current RPS is failing with respect to promoting in-state renewable power generation to the grid (hardly any at this point), while hurting Connecticut's efforts to escape its long-standing position as having the most, or nearly most expensive energy in the country.
Other, more effective strategies are needed to ensure reduced energy costs, while providing the opportunity for the development of instate renewables in an economically competitive manner.
CBIA believes the original version of SB 1138 struck a good balance. We are concerned that the new version of the bill may be insufficient to meet the challenge.
Other options are available to the legislature such as making our RPS Class 1 requirements and deadlines less aggressive and more in line with the majority of states that have them.
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