CL&P, UI Propose Nonbypassable Recovery for Purchase of LRECs, ZRECs

Connecticut Light & Power and United Illuminating jointly submitted to PURA this morning (11-12-06) a solicitation plan for the procurement of RECs from qualifying Connecticut Class I renewable energy generation projects of varying sizes that have either low emissions (LRECs) or zero emissions (ZRECs).

The procurement is required by recent legislation, and allows the projects to sell RECs to the distribution companies at a fixed price for 15 years (see 9/26).

The distribution companies asked that PURA authorize full cost recovery of their reasonable and prudently incurred costs and fees associated with execution of the procurement plan, for both ZRECs and LRECs, through the non-bypassable federally mandated congestion charge (NBFMCC) assessed to all distribution customers. If, during the term of the contracts, the NBFMCC ceases to exist, the companies asked that a similar non-bypassable rate component that is also recovered from all distribution customers be used for cost recovery.

A quick review of the material filed by the distribution companies this morning did not indicate that the companies have explicitly proposed how to dispose of RECs procured under the program and paid for by all distribution customers.