The LREC/ZREC PROGRAM
and RFP Results
Developing Small Behind-The-Meter Renewable Generation in Connecticut
Christie Bradway, Manager, Renewable Power Contracts,
October 26, 2012
What are LRECs and ZRECs?
• LRECs: Low Emission Renewable Energy Credits
(RECs)
– Fuel Cells; Solar; Small Hydro; Wind
• No larger than 2,000 kW
• Must have low emissions
• ZRECs: Zero Emission Renewable Energy Credits
– Solar, Small Hydro, Wind
• No larger than 1,000 kW
• Requires contracts with small <100 kW; medium – 100 – 250 kW; large
– 250 – 1,000 kW
• Must have zero emissions
• LRECs/ZRECs can be used to meet CT Class I RPS
requirements
2
Connecticut Public Act 11-80 & the
LREC/ZREC Program
• Requires CL&P and UI to purchase Renewable Energy Credits
(“RECs”) under 15-year contracts
•
Projects must meet eligibility criteria:
 Connecticut Projects located behind the customer meter
in our service territory
 Interconnected to the EDCs distribution system
 Must be in service on, or after, July 1, 2011
 Can not have received CCEF or CEFIA grants or rebates
3
Budget Based Program
The Program is based on committing an annual budget and not
procuring an amount of capacity (MW)
LRECs
$4M/Yr for 15 Yr contracts = $60M
ZRECs (Large, Medium and small)
$8M/Yr for 15 Yr contracts =
$120M
5 Procurement Yrs = $60M x 5 = $300M
6 Procurement Yrs =
$120M x 6 = $720M
Combined Total Program Budget for LRECs and ZRECs = $1.02 B
•
80/20% budget split between CL&P & UI
 CL&P
~80%
= $816M
 UI
~20%
= $204M
4
CL&P Received Approval on our
Solicitation Plan in April 2012
•
Timeline and Methodology of Solicitation
 Annual RFP and Tariff
Group
Size
Solicitation Method
LREC
0 – 2,000 kW
RFP
Large ZREC
250 – 1,000 kW
RFP
Medium ZREC
100 – 250 kW
RFP
Small ZREC
0 – 100 kW
Tariff
•
Method of Evaluation


•
Form of Standard Contract

•
Ranked by lowest price per REC to commit an annual budget and meets eligibility criteria
Bid evaluation discount of 10% for Connecticut manufactured, researched or developed technologies
No negotiation of terms and strict termination provisions
Additional Standardized Documents
 RFP; Small ZREC Tariff; Meter Specifications
5
Successful LREC/ZREC Procurement
Plan Filed with PURA on Oct. 10, 2012
• Resulted in 76 contracts and $90M in contract
commitments
– Next competitive solicitation expected in April 2012.
• Exercised contract protections and controls
– Strict termination provisions if contracts were not
executed or performance assurance was not paid
– Use of a Stand-by queue allowed us to select “next
project in the queue” until bid expiration
6
CL&P’s RFP Budget
• LRECs = $3.2M/year annual budget
• ZRECs = $4.26M/year annual budget
• Large (250 kW & up) = ~$2.13M/year
• Medium (over 100 kW; <250 kW) = ~$2.13M/year
* Reminder – Small ZRECs were not part of RFP
Results of 1st RFP
Category
Size
# Bids
Received
#
Bids Selected
(Round 1 + 2)
Average
Weighted
Price/REC
Committed
Budget
($M)
Uncommitted
Budget ($M)
15 Year
Contract
Commitment
Value ($M)
LRECs
Up to 2
MW
43
8
$59.91
$1.9
$1.3M
$29
Medium
ZRECs
100 – 250
kW
113
47
$149.29
$2.1
$78K
$30.8
Large
ZRECs
250 –
1,000 kW
140
21
$101.36
$2.0
$145K
$29.8
296
76
$91.01
$6.0
$1.5M
$90
Total
1. Prices significantly lower than cap by about 1/3 of cap
2. Contracts have resulted in the commitment of most of the available budget, with the exception of
LRECs where 39.5% ($1.3M) of funding was not committed due to Bidders not providing
Performance Assurance and termination of contracts.
– PURA allows for uncommitted dollars to be rolled into a future Solicitation (April 2013)
3. RFP contracts will result in approximately 25MW of installed renewable capacity in CT
– LRECs = 4 MW – fuel cells
– ZRECs = 21 MW - solar
8
Small ZREC Program
•
At this time, no date set for opening of program
•
PURA Decision requires CL&P to open within 30 days of “PURA approval of Medium &
Large ZREC contracts”
•
PURA is still reviewing Procurement Plan
•
Small ZREC Price = $164.22/REC (proposed)
•
The companies are jointly completing key Small ZREC documents
•
•
Application rules
•
Small ZREC Q&A
Small ZREC Tariff Informational Session – November 5, 2012
•
9 am – 3 pm at Northeast Utilities - 107 Selden Street, Berlin, CT
Questions?
•
Website: www.cl-p.com
• Click on “Renewable Energy Credits” under “Going Green”
•
Email: Contact CL&P: lrec.zrec@nu.com