General Assembly		Governor's Bill No. 6838
January Session, 2015		LCO No. 3985
		*03985__________*
Referred to Committee on ENERGY AND TECHNOLOGY
Introduced by:
REP. SHARKEY, 88th Dist. REP. ARESIMOWICZ, 30th Dist. SEN. LOONEY, 11th Dist. SEN. DUFF, 25th Dist.

AN ACT CONCERNING THE ENCOURAGEMENT OF LOCAL ECONOMIC DEVELOPMENT AND ACCESS TO RESIDENTIAL RENEWABLE ENERGY.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 16-245ff of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) As used in this section and section 16-245gg, as amended by this act:

(1) "Performance-based incentive" means an incentive paid out on a per kilowatt-hour basis.

(2) "Expected performance-based buydown" means an incentive paid out as a one-time upfront incentive based on expected system performance.

(3) "Qualifying residential solar photovoltaic system" means a solar photovoltaic project that receives funding from the Connecticut Green Bank, is certified by the authority as a Class I renewable energy source, as defined in subdivision (20) of subsection (a) of section 16-1, emits no pollutants, is less than twenty kilowatts in size, is located on the customer-side of the revenue meter of one-to-four family homes and serves the distribution system of an electric distribution company.

(4) "Solar home renewable energy credit" means a renewable energy credit created by the production of one megawatt hour of electricity generated by one or more qualifying residential solar photovoltaic systems with an approved incentive from the Connecticut Green Bank on or after January 1, 2015.

[(a)] (b) The Connecticut Green Bank established pursuant to section 16-245n shall structure and implement a residential solar investment program established pursuant to this section, which shall result in a minimum of [thirty] three hundred megawatts of new residential solar photovoltaic installations located in this state on or before December 31, 2022, the [annual] procurement and cost of which shall be determined by the bank [and the cost of which shall not exceed one-third of the total surcharge collected annually pursuant to said] in accordance with this section. [16-245n.]

[(b)] (c) The Connecticut Green Bank shall offer direct financial incentives, in the form of performance-based incentives or expected performance-based buydowns, for the purchase or lease of qualifying residential solar photovoltaic systems. [For the purposes of this section, "performance-based incentives" means incentives paid out on a per kilowatt-hour basis, and "expected performance-based buydowns" means incentives paid out as a one-time upfront incentive based on expected system performance.] The bank shall consider willingness to pay studies and verified solar photovoltaic system characteristics, such as operational efficiency, size, location, shading and orientation, when determining the type and amount of incentive. [Notwithstanding the provisions of subdivision (1) of subsection (h) of section 16-244c, the amount of renewable energy produced from Class I renewable energy sources receiving tariff payments or included in utility rates under this section shall be applied to reduce the electric distribution company's Class I renewable energy source portfolio standard. Customers who receive expected performance-based buydowns under this section shall not be eligible for a credit pursuant to section 16-243h.]

[(c)] (d) [Beginning with the comprehensive plan covering the period from July 1, 2011, to June 30, 2013, the] The Connecticut Green Bank shall develop and publish [in each such plan] on its Internet web site a proposed schedule for the offering of performance-based incentives or expected performance-based buydowns over the duration of any such solar incentive program. Such schedule shall: (1) Provide for a series of solar capacity blocks the combined total of which shall be a minimum of [thirty] three hundred megawatts and projected incentive levels for each such block; (2) provide incentives that are sufficient to [meet reasonable payback expectations of] provide the residential consumer with a competitive electricity price, taking into consideration the estimated cost of residential solar installations, the value of the energy offset by the system, the cost of financing the system, and the availability and estimated value of other incentives, including, but not limited to, federal and state tax incentives and revenues from the sale of solar home renewable energy credits; (3) provide incentives that decline over time and will foster the sustained, orderly development of a state-based solar industry; (4) automatically adjust to the next block once the board has issued reservations for financial incentives provided pursuant to this section from the board fully committing the target solar capacity and available incentives in that block; and (5) provide comparable economic incentives for the purchase or lease of qualifying residential solar photovoltaic systems. The [bank] Connecticut Green Bank may retain the services of a third-party entity with expertise in the area of solar energy program design to assist in the development of the incentive schedule or schedules. [The Department of Energy and Environmental Protection shall review and approve such schedule.] Nothing in this subsection shall restrict the [bank] Connecticut Green Bank from modifying the approved incentive schedule [before the issuance of its next comprehensive plan] to account for changes in federal or state law or regulation or developments in the solar market when such changes would affect the expected return on investment for a typical residential solar photovoltaic system by twenty per cent or more.

[(d)] (e) The Connecticut Green Bank shall establish and periodically update program guidelines, including, but not limited to, requirements for systems and program participants related to: (1) Eligibility criteria; (2) standards for deployment of energy efficient equipment or building practices as a condition for receiving incentive funding; (3) procedures to provide reasonable assurance that such reservations are made and incentives are paid out only to qualifying residential solar photovoltaic systems demonstrating a high likelihood of being installed and operated as indicated in application materials; and (4) reasonable protocols for the measurement and verification of energy production.

[(e)] (f) The Connecticut Green Bank shall maintain on its Internet web site the schedule of incentives, solar capacity remaining in the current block and available funding and incentive estimators.

[(f)] (g) Funding for the residential performance-based incentive program and expected performance-based buydowns [shall be apportioned from] (1) may include up to one-third of the moneys collected annually under the surcharge specified in section 16-245n; [, provided such apportionment shall not exceed one-third of the total surcharge collected annually,] (2) may include revenue from the solar home renewable energy credit program; and (3) may be supplemented by federal funding as may become available.

[(g)] (h) The Connecticut Green Bank shall identify barriers to the development of a permanent Connecticut-based solar workforce and shall make provision for comprehensive training, accreditation and certification programs through institutions and individuals accredited and certified to national standards.

(i) The Public Utilities Regulatory Authority shall provide an additional incentive of up to five per cent of the then-applicable incentive provided pursuant to this section for the use of major system components manufactured or assembled in Connecticut, and another additional incentive of up to five per cent of the then-applicable incentive provided pursuant to this section for the use of major system components manufactured or assembled in a distressed municipality, as defined in section 32-9p, or a targeted investment community, as defined in section 32-222.

[(h)] (j) On or before January 1, [2014] 2017, and every two years thereafter for the duration of the program, the Connecticut Green Bank shall report to the joint standing committee of the General Assembly having cognizance of matters relating to energy on progress toward the goals identified in subsection [(a)] (b) of this section.

Sec. 2. Section 16-245gg of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

[The Public Utilities Regulatory Authority shall provide an additional incentive of up to five per cent of the then-applicable incentive provided pursuant to section 16-245ff for the use of major system components manufactured or assembled in Connecticut, and another additional incentive of up to five per cent of the then-applicable incentive provided pursuant to section 16-245ff for the use of major system components manufactured or assembled in a distressed municipality, as defined in section 32-9p, or a targeted investment community, as defined in section 32-222.]

(a) Not later than one hundred eighty days after July 1, 2015, the Connecticut Green Bank shall negotiate and develop a master purchase agreement with each electric distribution company. Each such agreement shall have a term of fifteen years, and require the electric distribution company to purchase solar home renewable energy credits produced by qualifying residential solar photovoltaic systems.

(b) Solar home renewable energy credits shall be owned by the Connecticut Green Bank, until transferred to an electric distribution company pursuant to a master purchase agreement in accordance with subsection (a) of this section. A solar home renewable energy credit shall have an effective life covering the year of its production and the following calendar year. The obligation of the electric distribution companies to purchase solar home renewable energy credits pursuant to the master purchase agreement shall be apportioned to electric distribution companies based on their respective distribution system loads at the commencement of the master purchase agreement period, as determined by the authority.

(c) Notwithstanding subdivision (1) of subsection (h) of section 16-244c, an electric distribution company may retire the solar home renewable energy credits it procures through the master purchase agreement to satisfy its obligation pursuant to section 16-245a.

(d) To develop a master purchase agreement, the Connecticut Green Bank and an electric distribution company shall negotiate in good faith the final terms of the draft master purchase agreement. Thirty days after the date negotiations commence, either the Connecticut Green Bank or an electric distribution company may initiate a docket proceeding before the Public Utilities Regulatory Authority to resolve any outstanding issues pertaining to the master purchase agreement.

(e) Upon completion of negotiations on a master purchase agreement the Connecticut Green Bank and the electric distribution company shall not later than January 1, 2016, jointly file, with the authority, an application for approval of the agreement by the authority. No such master purchase agreement may become effective without approval of the authority. The authority shall hold an uncontested case, in accordance with the provisions of chapter 54, to approve, reject or modify an application for approval of the master purchase agreement.

(f) The purchase price of solar home renewable energy credits shall be determined by the Connecticut Green Bank and shall not exceed the lesser of the price of small zero-emission renewable energy credit projects for the preceding year or the alternative compliance payment pursuant to subsection (k) of section 16-245.

(g) Electric distribution companies shall be entitled to recover reasonable costs and fees prudently incurred while complying with the master purchase agreement through a reconciling component of electric rates as determined by the authority. Nothing in this section shall preclude the resale or other disposition of energy or associated renewable energy credits purchased by an electric distribution company, provided the electric distribution company shall net the cost of payments made to projects under the master purchase agreement against the proceeds of the sale of energy or renewable energy credits and the difference shall be credited or charged to electric distribution company customers through a reconciling component of electric rates as determined by the authority that is nonbypassable when switching electric suppliers.

This act shall take effect as follows and shall amend the following sections:
Section 1	from passage	16-245ff
Sec. 2	from passage	16-245gg

Statement of Purpose:

To implement the Governor's budget recommendations.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]