September 13, 2012

21 CT renewable-energy projects to get ZREC funding

New Haven electric utility United Illuminating picked 19 solar projects and two fuel cell projects for funding in the first year of the state's $1 billion program to promote renewable-energy installations statewide.

UI and Berlin electric utility Connecticut Light & Power are administering Connecticut's Zero Emissions and Low Emissions Renewable Energy Credit program – better known as ZREC/LREC. The two utilities have been narrowing down about 400 applicants since June, trying to pick the most realistic projects with the money available this first year.

For ZREC technologies such as solar, wind, and hydro, the utilities will enter into $8 million worth of 15-year contracts annually for six years. For LRECs, such as fuel cells and biomass, the utilities will enter into $4 million worth of 15-year contracts annually for five years.

CL&P is awarding 80 percent of the money, while UI awards 20 percent through ratepayer funds.

In its procurement plan filing with the Public Utilities Regulatory Authority on Tuesday, UI said it plans to contract with six large-size and 13 medium-size solar projects for its ZRECs and two fuel cell projects for its LRECs.

The identities of the recipients remained confidential in the PURA filing, although they may be made public during the regulatory process.

The program is open to all clean technologies, but solar and fuel cells have natural advantages. Solar without incentives is priced significantly lower than other ZREC-eligible technologies. Fuel cells generate a constant stream of electricity, plus the technology receives a discount in the LREC program since the fuel cells are manufactured in Connecticut at UTC Power in South Windsor and at FuelCell Energy Inc.'s Torrington facility.

CL&P has not filed its procurement plan yet, despite its self-imposed deadline of Tuesday.

Under confidentiality agreements with PURA, neither UI nor CL&P will disclose the recipients of the ZRECs and LRECs at the time of the filing. PURA must still approve each utilities procurement plan.

Connecticut's method for awarding these credits – which the projects receive for the power produced – differs from similar programs in other states. Connecticut requires the utilities to competitively bid the awards to contain the cost of the ZRECs and LRECs while maximizing the number of projects funded from the limited pool of money each year.

UI will pay $117 per credit for the large solar projects, $135 for the medium solar projects, and $51 for the fuel cells. Similar programs for solar technology in Massachusetts and Maryland pay about $200 per credit.

After PURA approves UI's procurement plan, the utility plans to launch a separate ZREC program for small projects of 100 kilowatts or less to be awarded on a first-come, first-served basis. The price of those credits is anticipated at $149.

The bulk of the clean electricity generated from UI's selections will come from the two fuel cells. Those two projects will produce 9,561 credits compared to the 8,317 credits produced from the 19 solar projects. The difference is fuel cells run 24 hours a day while solar installations produce electricity only when collecting sunlight.

UI still has $311,640 left in its funding for the LREC program this year, but that is not enough to award a third fuel cell project in that category.

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