Connecticut details $1 billion investment in clean energy
Apr 12 - Connecticut Post
Connecticut's public works regulator plans to distribute $720 million
to zero-emissions, renewable-energy generation and $300 million to
low-emissions generation over the next several years, detailing for the
first time how the state will spend more than $1 billion of required
investments in commercially generated renewable power.
The investment by the Public Utilities Regulatory Authority is part
of the energy law Connecticut passed last year which, among other
actions, sets up aggressive requirements for the state to shift to
renewable power.
Connecticut Light & Power and United Illuminating will auction $8
million of renewable-energy credits to energy projects for up to six
years. Initially, the money will be divided equally between small-,
medium- and large-scale projects. Companies that install solar panels on
their rooftops would qualify for the smallest category. Each contract
will last for 15 years. The total amount of investments will increase by
$8 million yearly.
PURA created provisions that in case the prices of the contracted
technologies drop in three years, it can enter into aggregate 5-year
contracts for an additional $4 million in years four and five.
Solar installer Jerry Charlup said the program is both good and bad
for the industry. The 15-year contract will make it easier for companies
to get loans for projects, he said.
"Most people would assume a 15-year contract from CL&P is good as
gold," said Charlup, CEO of American Solar and Alternative Power in
Stamford.
But Charlup said the program also has its flaws. He is worried
large-scale commercial installers from the west coast will move into the
state and quickly soak up all the investments.
Companies will bid for the contracts in reverse auctions by trying to
bid the lowest price for every megawatt hour they generate. The state
has set the ceiling price at $350 per megawatt hour.
"The $350 figure is a phantom number," Charlup said. "Few people are
going to be even $200. You'd have to be crazy to bet $300. And once the
first RFP is done, people will look at the average they took and the
second auction will be below that."
New Jersey runs a similar auction for solar power, and the
legislature has had to retool the legislation over the past year because
of overnight price collapses. While large-scale solar installers can
survive the fluctuating price market, smaller installers sometimes are
forced to leave the state for better markets or close their office.
Massachusetts has a similar auction, but it sets a floor price
instead of a ceiling. If New Jersey had enacted a similar floor, it
could have avoided its problems, Charlup said.
American Solar and Alternative Power has submitted bids in the small
and medium categories.
The funding from the electricity companies comes from surcharges on
residents' utility bills.
"This is going to be a terrific opportunity for businesses of all
sizes to participate in the clean-energy program," said Mike Trahan,
Executive Director of Solar Connecticut. "It's going to create a
reliable and steady industry."
vsingh@ctpost.com; 203-330-6285; twitter.com/vintisingh
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