The LREC/ZREC PROGRAM - Raab Associates, Ltd.
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Transcript The LREC/ZREC PROGRAM - Raab Associates, Ltd.
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: [email protected]