Language in Connecticut Draft Appears to Allow Nonbypassable Recovery of Utility PPAs Even if PPAs Used for Default Service

A draft Connecticut Public Utilities Regulatory Authority order would approve Power Purchase Agreements filed by The Connecticut Light and Power Company and The United Illuminating Company with GRE 314 East Lyme LLC and Somers Solar Center LLC, totaling 10 MW aggregate, and would make certain findings regarding the use of facility output and the recovery of costs and benefits associated with the Power Purchase Agreements.

Specifically, the draft order would find that Conn. Gen. Stat. §16-244v does not place any restrictions on the use of the output from facilities approved pursuant to this statute, either in the form of energy or RECs.

"Accordingly, the draft would determine that Conn. Gen. Stat. §16-244v allows the market products from the PPAs to be used in either fashion proposed by the EDCs, since either use benefits ratepayers," the draft states.

The EDCs had proposed that they either a) use their share of the market products from the PPAs to serve, or as a hedge for, Standard Service or Last Resort Service load; or b) for the benefit of all customers, by either selling their share of market products in ISO-NE markets or in bilateral transactions, or by using the energy and capacity as "load reducers" in CL&P's service territory;

The EDCs had 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 bypassable Generation Services Charge the net PPA-related costs and benefits.

However, the draft order does not appear to make this distinction that the sought authority regarding cost recovery was predicated on the use of the products.

Specifically, the draft order merely states, "The EDCs may recover any net cost or benefit through the NBFMCC [Non-Bypassable Federally Mandated Congestion Charge] charge."

"The Authority approves the EDC recovery of credits and charges associated with the DEEP-approved PPAs through the NBFMCC," the draft concludes.

Nothing in the language appears to limit this nonbypassable treatment of the costs of the contracts to situations where the contracts' products are sold into the market, and not dedicated solely for default service.

Docket: 12-05-13