On September 20, 2013, Governor Daniel P. Malloy announced Connecticut’s selection of two energy projects out of 47 submitted in response to the State’s Request for Proposals for Clean Energy Projects (the “Projects”). The first is the “Fusion Solar Center,” a 20 MW AC solar installation on land owned by the Connecticut-based Fusion Paperboard Company in Sprague and Lisbon, Connecticut. The second is the “Number Nine Wind Farm,” a 250 MW land-based wind farm located in Aroostook County, Maine. Governor Malloy stated that the selections represent a “major milestone in implementing [Connecticut’s] Comprehensive Energy Strategy.”
EDP Renewables North America, LLC (“EDP Renewables”), the third largest independent producer of wind energy in the United States, will serve as project developer of the Number Nine Wind Farm. EDP Renewables has developed, constructed, and now operates over 3700 MWs of wind energy. HelioSage energy, a solar energy project development firm with over 1000 MWs in operation nationally, will be the project developer for the Fusion Solar Center. Both projects are expected to be operational by the end of 2016.
The project proposals came in response to Public Act 13-303, An Act Concerning Connecticut’s Clean Energy Goals (the “Act”), which set the stage for new clean energy projects. In particular, the Act restructured Connecticut’s Renewable Portfolio Standard and permitted the state to go forward with a clean energy procurement process for up to 4% of its total electricity load. In addition, the Act recommitted Connecticut to obtaining 20% of its electric power from clean energy sources by the year 2020.
The power from these two energy sources is expected to cost below eight cents per kilowatt hour (k/Wh), comparable in price to electricity generated from conventional power plants, and will provide 3.5% of Connecticut’s total energy load, which is almost one-fifth of the Renewable Portfolio Standard goal of 20% by 2020. The expedited procurement process will allow the Projects to take advantage of federal tax credits for renewable energy projects, which credits expire at the end of 2013. The tax credits help reduce the cost of the power that the Projects will provide.
The procurement team tasked with evaluation of the proposals consisted of members of the Department of Energy and Environmental Protection’s (“DEEP”) Bureau of Energy and Technology Policy, the Office of Consumer Counsel, and Connecticut’s Attorney General. Projects were evaluated on the basis of three criteria: (1) price (which was deemed most significant); (2) viability, or the likelihood of achieving the proposed commercial operation date; and (3) the ability to improve the State’s electric system reliability.
State Senator Bob Duff, State Representative Lonnie Reed, co-chairs of the general Assembly’s Energy and Technology Committee, Commissioner Daniel Esty, and Attorney General George Jepsen publicly supported the Projects. As Consumer Counsel Elin Swanson Katz stated, “[t]his renewable energy procurement is a great success achieved in a tight time frame. We seemed to be facing a potential shortage of the renewable energy needed to meet the state’s legal requirements by the end of the decade but the projects selected in this process will help alleviate that concern, at prices that are quite attractive.”
The Projects also have the support of environmental leaders and electric distribution companies alike. The President of the Conservation Law Foundation, the President of the New England Clean Energy Council, the CEO of the American Wind Energy Association, and the Executive Director of the Connecticut Fund for the Environment, all publicly expressed their support for this project. James Daly, Vice President of Energy supply for Northeast Utilities, the state’s largest electric distribution company, stated that the new agreements “allow Connecticut Light and Power to further demonstrate our commitment to helping the state reach its goals by adding to the significant amount of renewable energy we currently deliver to our customers.” Likewise, Alan Trotta, United Illuminating’s Director of Wholesale Power contracts stated that they are “looking forward to the long-term business relationships” with the developers of the Projects.
Next the power purchase agreements executed by the Projects and the state’s electric distribution companies will be submitted to the Public Utilities Regulatory Authority (“PURA”) for review and approval. This RFP-selection-approval process is similar to that used in the approval of four energy capacity contract projects in 2007, one of which was represented by counsel at Edwards Wildman. PURA has 30 days to act on these contracts, pursuant to the Act. Projects will also be required to obtain additional local and state approvals necessary for their construction.
If you would like further information, please contact the Edwards Wildman lawyer responsible for your matters or one of the authors linked above.