Practical Ways For Towns
to Save Money With
Clean Energy Projects
Paul Michaud
Murtha Cullina LLP
[email protected]
April 30, 2014
Toolbox Items
Renewable Energy
Energy Efficiency
• ZREC & LREC Program
• CPACE Finance Program
• Net Metering Rule
• Energy Savings
Performance Contracting
• Virtual Net Metering Rule
• Microgrid Program
• Power Purchase
• Small Business
Advantage Program
ZREC & LREC Program
General Project Eligibility Criteria
• Class I renewable energy project
• Located behind the utility meter
• No larger than 1,000 kW
• Zero Emissions
• May include Solar, Hydro, Wind
• No larger than 2,000 kW
• Must have low emissions
• May include fuels cells and other low emissions Class I resources, plus all
zero emission Class I resources
Z-REC & L-REC Program –
Bid Selection Process
Project bids are ranked by REC price, with the lowest bid REC price
ranked first
Projects are selected until the annual ZREC and LREC Program
budgets are met for each utility:
Large ZREC Project (250 kW to 1,000 kW) Budget: $2.7 million
Medium ZREC Project (101 kW to 249 kW) Budget: $2.7 million
LREC Project (1 kW to 2,000 kW) Budget: $4.0 million
Small ZREC Project (1 kW to 100 kW) Budget: $2.7 million
• Separate Solicitation under a utility tariff rider
Net Metering Rule
• Net Metering is a state policy incentive to encourage customers to
install distributed renewable energy generation at their place of work
• Town’s offset own electricity usage with on-site renewable energy
• If monthly generation exceeds consumption, the net excess
generation (surplus amount) is credited to customer’s next bill at
retail rate, excess reconciled annually at either the avoided-cost
rate, or time-of-use generation rate (Solar PV only)
• Delivery (kWh) charges are reduced by the amount of the on-site
renewable generation
• 2 MW Limit
Municipal Virtual Net Metering
• Class I or Class III Renewable Resource
• Municipality can own, lease or enter into a long-term contract
(Power Purchase Agreement) for the VNM facility
• 5 beneficial accounts
• Microgrid Exception:
– Municipal Host can serve an additional 5 non-municipal and non-state
“critical facility” accounts if connected to the microgrid
• $10,000,000 VNM money cap (annual) with 40% sub-cap
Municipal Virtual Net Metering
– continued
• Virtual Net Metering Bill Credit
Generation Service Charge (GSC)
• 100% allocation based on energy produced by the renewable
energy system
Distribution & Transmission Charges (D&T)
• 80% allocation – Operational Year 1
• 60% allocation – Operational Year 2
• 40% allocation starting on and after Operational Year 3
Municipal Virtual Net Metering
– continued
Town Hall
50 kW
2,000 kW solar array
Fire Station
Middle School
200 kW
600 kW
High School
Customer Host:
- High School
Beneficial Accounts:
- Town Hall
- Fire Station
- Town Library
- Policy Station
- Middle School
900 kW
Police Station
200 kW
Town Library
50 kW
Municipal Microgrid
• A Microgrid is a discrete energy system;
• Consisting of two distributed generation sources; and
• Tying critical facilities (e.g. Police Station, Fire Station,
Public Works Facility, Town Hall, Library and High
School) together electrically so that they can operate in
parallel with, or independently from, the main power grid.
Benefits of the Microgrid
• Reliability/Resiliency
Engineered to “island” from the grid when the main grid goes down, the microgrid
will continue to provide critical services to residents at the Town Center and
Amity High School
• Price Stability
• Enhances the integration of distributed and renewable
energy sources
Who Pays for the Microgrid
Capital Costs?
1. No out-of-pocket capital costs incurred by the Town
2. The State of Connecticut, under a competitive RFP,
may select a Town to receive a state grant to cover the
“distribution” related capital costs of the microgrid
3. Private Generation Developers will pay the “generation”
related capital costs of the microgrid under a Power
Purchase Agreement (PPA)
State of Connecticut: First
Round RFP - Grant Results
Source: CT DEEP
Woodbridge Microgrid
Woodbridge Microgrid
Main Utility Electricity Grid
Microgrid controller
Transmission Lines
Centralized Generation Plant
What is a Power Purchase
• A Power Purchase Agreement (PPA) is a long-term power contract
between the Municipality and the PPA Provider for the energy
generated by the renewable energy system at a predetermined price
• The PPA Provider absorbs the costs of designing, constructing,
operating and maintaining the renewable energy system
• The PPA Provider owns the renewable energy system and not the
What are the Benefits of a
• Zero upfront capital costs to the Municipality
• Hedge against future electricity price increases
• Municipality does not operate or maintain the
generation equipment
• No performance risk for the Municipality
Energy Efficiency
• Energy Savings Performance Contracting
Implementation of comprehensive energy savings measures
paid for by guaranteed energy savings
• Small Business Energy Advantage
Cash incentives, and on bill payment, for smaller energy
efficiency measures
Enables property owners to access financing for energy
upgrades and repay through a benefit assessment on their
property tax
Thank You!
Mr. Michaud leads the firm’s Renewable Energy practice group. Mr. Michaud’s experience
extends to all elements of renewable energy project development, operations, finance, and
permitting including drafting and negotiating complex power purchase agreements, real estate
leases, renewable energy certificate agreements, equipment procurement agreements, and
construction agreements. Mr. Michaud represents a diverse client-base, including local and
national solar, fuel cell, wind, CHP, small hydro and energy efficient companies, as well as
municipalities in renewable energy and microgrid RFP matters. Mr. Michaud also represents
renewable energy off takers, including municipalities, commercial and industrial companies,
hospitals and other health care facilities. In addition, Mr. Michaud represents renewable energy
clients on regulatory matters before state public utility commissions and siting councils. He is
the founder and Executive Director of the Renewable Energy and Efficiency Business
Association, Inc. where he has extensive experience as a certified lobbyist on renewable
energy policy matters.

Practical Ways For Towns to Save Money With