CT examines energy storage, grid improvements

The Connecticut Department of Energy and Environmental Protection has opened a proceeding to implement a state law advancing energy storage systems and other improvements to the electric grid.  The Distributed Energy Resource Integration Demonstration Project program is designed to find best practices on how different grid-side system enhancements can be reliably and efficiently integrated into the grid in a manner that is cost-effective for all ratepayers.  The recently opened case has the potential to lead to significant investment in energy storage in Connecticut and other grid advancements.

The Department of Energy and Environmental Protection, or DEEP, was established on July 1, 2011 as a combination of the Department of Environmental Protection, the Department of Public Utility Control as well as other state energy policy staff.  DEEP has a dual mandate of conserving, improving and protecting Connecticut's natural resources and environment, as well as supporting economic development by making cheaper, cleaner and more reliable energy available.

In June 2015, the Connecticut legislature passed a sweeping bill formally known as June Special Session Public Act 15-5, An Act Implementing Provisions of the State Budget for the Biennium Ending June 30, 2017, Concerning General Government, Education, Health and Human Services and Bonds of the State (“the Act”).  Section 103 of the Act requires Connecticut electric distribution companies to submit a proposal or proposals to DEEP for demonstration projects to build, own, or operate grid-side system enhancements, such as energy storage systems.  Proposals are supposed to:

• Demonstrate and investigate how distributed energy resources (DER) can be reliably and efficiently integrated into the electric distribution system;
• Maximize the value provided to the electric grid, electric ratepayers, and the public from distributed energy resources; and
• Complement and enhance the programs, products, and incentives available through the Connecticut Green Bank, the Connecticut Energy Efficiency Fund, and other similar programs.

As an initial step in the implementation of this program, DEEP has opened a proceeding to establish priority goals and objectives for the DER Integration Demonstration Projects.  The proceeding includes opportunity for public comment, as well as a stakeholder workshop scheduled for October 5.

Ultimately, Connecticut's electric distribution companies will propose specific demonstration projects for approval first by DEEP, then by the Connecticut Public Utilities Regulatory Authority or PURA.  Much emphasis has been placed on energy storage systems as a likely beneficiary of the program.  Other grid-side system enhancements could include distribution system automation and controls, intelligent field systems, advanced distribution system metering, communication, and systems that enable two-way power flow.  DEEP has until January 1, 2017 to evaluate the approved proposals and report to the state's legislative committee with jurisdiction over energy.

June 9, 2011 - Connecticut restructures its regulation of energy

In an attempt to lower electricity rates and promote clean energy, Connecticut's state legislature has passed legislation reforming key regulatory agency structure.  Governor Dannel Malloy is expected to sign the bill later this month.

Connecticut has high electricity prices.  According to the Energy Information Administration, Connecticut had the second-highest prices in the nation in 2009 -- an average retail price of 18.06 cents per kilowatt-hour.  Only Hawaii has more expensive electricity.  (EIA's most recent monthly data, for February 2011, keeps Connecticut in second place.)

To address this concern, the bill, S.B. 1243, shuffles energy regulatory responsibilities into a new agency, the Department of Energy and Environmental Protection.  (DEEP -- quite a catchy acronym.)  DEEP would be formed by merging the existing state Department of Environmental Protection with the Department of Public Utility Control, and the energy staff from the Office of Policy and Management. Proponents argued that giving one agency comprehensive responsibility for energy policy would ensure consistent regulation.  Connecticut has not had such a one-stop shop for energy policy in over 30 years.

As an example of how DEEP can provide one-stop shopping, S.B. 1243 also creates an Office of Energy Efficient Business within DEEP.  This office is designed to help businesses connect with opportunities, technology and funding for energy efficiency and renewable energy projects.

The bill also creates the Clean Energy Finance and Investment Authority (CEIFA).  CEIFA's stated purpose is to facilitate private capital investment in clean energy projects by pursuing maximal leveraging of public dollars.  In this role, CEIFA succeeds the Renewable Energy Investment Board, the statutorily-created entity that has been managing the Connecticut Clean Energy Fund.  

In recognition of the role that long-term contracts can play in hedging volatility and reducing electricity costs, S.B. 1243 would require DEEP to develop an annual plan for competitive solicitations and procurement of energy and wholesale electricity market products "that will enable each electric distribution company to manage a portfolio of contracts to reduce the average cost of standard service while maintaining standard service cost volatility within reasonable levels."

Will the agency shuffling lead to a tangible improvement in Connecticut's development and implementation of energy policy?  Will Connecticut's embracing of state-sponsored energy procurement reduce ratepayer costs?  With strong legislative support and the Governor's signature expected shortly, time will tell whether S.B. 1243 represents a step forward for Connecticut's energy policy.