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July 22, 2013

CT $1B solar secret reversal creates business opportunities

HBJ File Photo The solar plan for the Hartford landfill, also the site of natural gas collection, is the only ZREC project to be publicly disclosed by its owner.

The state's policy reversal to publicly disclose the winners of a $1 billion renewable energy program may lead to more apprehension among participants but ultimately will result in more business opportunities to support the projects, officials say.

“It is a good move to promote Connecticut businesses,” said Michael Trahan, executive director of trade association Solar Connecticut. “We couldn't determine if the program was going to work or not if the project winners weren't going to be disclosed.”

Trahan said the disclosure requirement should be a boon to businesses that support the clean energy industry. They will now be able to identify project developers who can become potential customers for equipment purchases, trained labor, and long-term maintenance work.

When the Zero-emissions/Low-emissions Renewable Energy Credit program (ZREC/LREC) launched in 2012, the Public Utilities Regulatory Authority initially decided the identities of the winners would be kept secret from the public. The program, which awards $1 billion over 21 years to renewable energy project developers, is administered by electric utilities Connecticut Light & Power and United Illuminating using ratepayer funds.

The utilities initially successfully argued the winners' information was proprietary.

Hartford Business Journal on June 20 submitted a Freedom of Information Act request to the state Department of Energy & Environmental Protection requesting information on the winners, including the name of the applicant; exact address of the proposed project; business or agency that will host the project; size of the renewable installation; and technology used in that installation (solar, fuel cell, etc.).

In response to HBJ's request, PURA on July 10 reversed its position on the ZREC/LREC secrets, requiring CL&P and UI to disclose all information about the program participants, especially the winners, save for their bank account numbers.

“If a state agency has it, it is public record,” said Thomas Hennick, public education officer for the Connecticut Freedom of Information Commission.

PURA gave the utilities a July 31 deadline to disclose the information for the program's first round, although DEEP spokesman Dennis Schain said the actual public disclosure of the information could take months depending on how the case plays out.

“I'm certainly glad that PURA is going to make that information public because … (keeping it secret) runs contrary to how we do business in the state,” said State Sen. Bob Duff (D-Norwalk), co-chair of the legislature's Energy & Technology Committee. “In terms of the greater good, it is better to have it disclosed.”

The state Office of Consumer Counsel previously requested the winners' information be made public, but PURA denied that request May 23. Solar Connecticut also had requested much of this information from the utilities but was rebuffed.

“This was a huge marketing opportunity being wasted,” Trahan said. “It is ratepayer money. There is no downside to put this information out there.”

In the first round of the program, all 87 large and medium ZREC contracts went to solar projects, while all 10 LREC contracts went to fuel cell projects. The money is awarded in an auction, where the project with the lowest price wins.

Solar Connecticut's members wanted to know the developers' identities so they can explore business partnerships with them, Trahan said.

Solar industry suppliers see significant business opportunities because bidders in the ZREC/LREC program are given incentives to use in-state equipment and suppliers.

“Our association is interested in the contracts between electric utilities and solar project developers,” Trahan said.

The public disclosure of the bidders' information, however, may lead to less participation in the program, along with other issues, said Paul Michaud, founder and executive director of the Hartford trade group Renewable Energy & Efficiency Business Association, which represents many of the winners.

In the first round, the bidders were told their information was proprietary and would be protected, so many crafted confidentiality agreements with the host sites, Michaud said.

Also, since PURA is requiring the winning and losing bidders be disclosed, the losing bidders planning on resubmitting applications for subsequent rounds are concerned other project developers will poach their business by offering potential host sites sweeter deals, Michaud said.

“Many REEBA members are concerned because their bids contain proprietary information,” Michaud said.

The reversal in the secrecy policy probably won't result in project developers wanting to drop out of the program, Michaud said, but they may have a harder time finding host sites since their information will be disclosed as well.

“Most companies will still submit bids. However, they will need to be careful in informing their host companies that information will be public,” Michaud said.

The program seems unlikely to run out of participants. In the first ZREC/LREC round, developers submitted 954 projects for consideration even though the utilities only had funding for 363.

“I don't think there is going to be any shortage of bids any time soon,” Trahan said.

In making its ruling for public disclosure, PURA did give the first round bidders an opportunity to file for a protective order by July 22, requiring them to cite a state or federal law why the information should be kept secret. PURA said it would rule on the protective orders individually.

Those protective orders will run in conflict with public records law, Hennick said, and Hartford Business Journal still should be entitled to the information regardless.

“I don't understand what that (protective order) could be. If it's public record, it's public record,” Hennick said.

PURA's order to CL&P and UI calls on them to release the information about the LREC bidders and the large and medium ZREC bidders. The ZREC program is divided into three categories based on size. While the large and medium ZRECs are awarded in the auction, the small ZRECs are given based on random selection.

Hartford Business Journal's request calls on PURA to release the information on all three ZREC categories. The request did acknowledge the small ZREC program was awarded differently and gave PURA a longer timetable to release that information.

The small ZRECs make up $240 million of the $1 billion in awards over the 21-year life of the program.

“Ratepayers pay for the program. Ratepayers should know how the money is being spent. That is the bottom line,” Trahan said.


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