Connecticut Utilities Seek Approval of Renewable PPAs, Cost Recovery Provisions

The Connecticut Light and Power Company and The United Illuminating Company have submitted an application to the Connecticut Public Utilities Regulatory Authority for approval of two renewable power purchase agreements totaling 10 MW.

Among other things, the EDCs requested that the Authority confirm that Section 127 of P.A. 11-80 provides the EDCs with the flexibility to either (a) use their share of the market products from the PPAs to help serve, or as a hedge for, Standard Service or Last Resort Service load, or (b) for the benefit of all customers, by either (i) selling their share of these market products directly into the applicable ISO-NE markets or in bilateral transactions or (ii) using the energy and capacity as "load reducers" to reduce load in CL&P's franchise service territory for the benefit of CL&P, wholesale suppliers and competitive retail suppliers.

The EDCs did not indicate which of the methods they would use to dispose of the products procured under the PPAs.

The EDCs requested that the Authority confirm that if an EDC either (i) sells these market products directly into the applicable ISO-NE markets or in bilateral transactions and the resulting net cost or benefit is passed through to all customers (instead of solely benefiting Standard Service or Last Resort Service load) or (ii) uses the energy and capacity as "load reducers", then the EDC will be allowed to recover all net PPA-related costs from all customers and credit any net PPA-related benefits to all customers, in each case through the non-bypassable federally mandated congestion cost (NBFMCC) charge.

The EDCs further requested that the Authority confirm that if an EDC uses these market products to benefit Standard Service or Last Resort Service load, then the EDC will be allowed to pass through its Generation Services Charge the net PPA-related costs and benefits.

Regardless of the disposition of the products under the PPAs (even if they are used to serve default service), the EDCs requested that the Authority confirm that each EDC can recover through its non-bypassable federally mandated congestion cost (NBFMCC) charge all costs incurred to administer and enforce each PPA, excluding internal labor costs that are already recovered in rates from electric customers.

The PPAs resulted from an RFP from the Department of Energy and Environmental Protection. They specifically include a five megawatt solar project in East Lyme submitted by GRE 314 East Lyme LLC (Green Skies) and a five megawatt solar project in Somers submitted by HelioSage Energy.

The EDCs also sough approval of a Cost Sharing Agreement between CL&P and UI under which the net PPA expenses and benefits will be allocated to CL&P's and UI's customers on an approximately 80%/20% basis, respectively