An Opportunity to Develop Renewable Generation in Connecticut Through the Low Emission Renewable Energy Credit (LREC) and Zero Emission Renewable Energy Credit (ZREC) Program
CL&P customers who install new, qualifying renewable energy projects -- ranging from rooftop solar panels to fuel cells -- now have an opportunity to sell the qualified Connecticut Class I renewable energy credits (RECs) created from their projects to CL&P under a long-term, 15-year contract.
As part of Public Act 11-80 signed into law by Gov. Malloy on July 1, 2011, the state of Connecticut directed CL&P and The United Illuminating Company (UI) to launch a 22-year program to promote, fund and expand “behind the meter” renewable generation. “Behind the meter” refers to projects that are located behind the utility’s customer revenue meter.
This LREC/ZREC program creates a market-driven bidding process for projects to compete to obtain a 15-year revenue stream from the sale of RECs to the electric utilities. The Public Utilities Regulatory Authority (PURA) approved CL&P and UI’s LREC/ZREC Program solicitation process, contracts and additional methods in Docket No. 11-12-06 on April 4, 2012.
What is an LREC?
An LREC is a Class I Renewable Energy Certificate from a low-emissions project as defined in Section 110 of Public Act 11-80. LREC-qualified projects are Connecticut generation projects that are located behind company customer meters, achieve commercial operation on or after July 1, 2011, and have emissions of no more than 0.07 pounds per megawatt-hour (MWh) of nitrogen oxides, 0.10 pounds per MWh of carbon monoxide, 0.02 pounds per MWh of volatile organic compounds, and one grain per 100 standard cubic feet. To qualify for the LREC/ZREC Program, LREC projects may not be larger than 2,000 kilowatts (kW).
What is a ZREC?
A ZREC is Class I Renewable Energy Certificate from a zero emissions project as defined in Section 107 of Public Act 11-80. ZREC-qualified projects are Connecticut generation projects that are located behind company customer meters, achieve commercial operation on or after July 1, 2011, and emit no pollutants. To qualify for the LREC/ZREC Program, ZREC projects may not be larger than 1,000 kW.
What Types of Projects Can Qualify for the LREC/ZREC Program?
The REC can be either zero emissions (ZREC) if it originates from a solar, wind, small hydro or other zero emissions generating source, or low emissions (LREC) if it meets certain measured emissions standards. Fuel cells are a good example of an LREC.
Here are a few key rules of the program:
Click here for general renewable energy credit information.
CL&P will select projects either through a competitive solicitation (Request for Proposals) or through a tariff.
For all LREC projects and large and medium ZREC projects (>100 kw), CL&P will request that the public respond to Requests for Proposals (RFPs) that CL&P will issue. CL&P will request a bidder to sell its renewable energy credits (RECs) to CL&P for a fixed price for 15 years. Bidders may respond to the RFP by submitting a Bid by clicking on the “Submit a LREC/ZREC Bid” button below.
Bidders may bid as high as $200 per REC from LREC Projects and up to $350 per REC from Medium and Large ZREC Projects. If CL&P selects a bid from a project, the bidder will have the opportunity to enter into a 15-year contract to sell its RECs to CL&P (the buyer) at the fixed price of their bid.
CL&P and UI will issue an RFP to solicit proposals from renewable generators for the purchase of the RECs produced from qualifying LREC projects up to 2,000 kW in size and for ZREC projects in the medium size category, which is >100 kW and <250 kW; and in the large ZREC category, which is for projects ≥250 kW and ≤1000 kW.
Click here to submit a LREC/ZREC bid.
CL&P and UI jointly issued the first RFP on May 1, 2012, and on October 10, 2012, CL&P filed the results of the RFP with PURA. Click here to view CL&P's Procurement Plan Filing.
On November 21, 2012, PURA approved, in part, CL&P’s Procurement Plan. Specifically, the 76 selected LREC and ZREC contracts that were submitted in the Procurement Plan were approved. In an effort to utilize the remaining LREC budget that was not committed prior to the initial filing of the Procurement Plan, CL&P selected four additional bids from the queue of remaining LREC bids that had chosen to honor their bids, and filed an Updated LREC/ZREC Procurement Plan with PURA on January 18, 2013. PURA approved the Updated Procurement Plan on February 1, 2013, which brings a close to the first year of the LREC Procurement Process.
Click here for a summary of CL&P’s Year 1 LREC and Medium and Large ZREC RFP results.
Click here for the specific Year 1 LREC and Medium and Large ZREC bid price information.
CL&P and UI jointly issued the second RFP on April 25, 2013. On October 22, 2013, PURA approved CL&P’s Interim Procurement Plan. Specifically, the 90 selected LREC and ZREC contracts that were submitted in the Interim Procurement Plan were approved. In order to utilize the remaining LREC/ZREC budget that was not committed prior to the interim filing of the Procurement Plan, CL&P selected 15 additional bids from the queue of remaining bids, and filed a Final Year 2 LREC/ZREC Procurement Plan with PURA on December 4, 2013. PURA approved the Final Year 2 Procurement Plan on January 16, 2014, which brings a close to the second year of the Procurement Process.
Click here to view CL&P's Procurement Plan Filing which includes a summary of CL&P’s Year 2 LREC and Medium and Large ZREC RFP results.
CL&P is planning to release the Year 3 LREC/ZREC RFP in April, 2014.
Key Documents for Year 2 LREC/ZREC RFP:
Those with small ZREC projects (less than or equal to 100 kW) will be eligible to enroll in a tariff, and are not included as part of the competitive solicitation’s RFP process. The Small ZREC Project tariff will not be available until PURA approves the selected medium ZREC projects through the RFP, and will be available on a first-come, first-served basis. Those with projects can apply for participation in the Small ZREC Project tariff once the Small ZREC tariff program sign-up is opened by the companies.
The CL&P Year 1 Small ZREC Tariff Rate was $164.22/REC
The Year 1 Small ZREC Tariff Program opened at 12:00 pm (noon), on January 8, 2013. The two-week window (as described in the posted Rules and Process for Submitting Applications for the Small ZREC Tariff) ended as of 12:00 PM Eastern Prevailing Time (EPT) (noon) on Tuesday, January 22, 2013.
At the close of the Year 1 Small ZREC 2-week window on January 22, 2013, CL&P received 479 completed Year 1 Small ZREC Applications, which totaled over $5.6M in requested Year 1 Small ZREC funding - more than 138% above CL&P’s available Year 1 Small ZREC budget of $2.36M. Therefore, based on the volume of applications received during the two-week window, CL&P conducted a random selection process of completed Applications submitted during the 2-week window, which was observed by a representative of the State of Connecticut Office of Consumer Counsel (OCC). The random selection process resulted in a numerical rank of all completed Applications received during the two-week window.
Click here to view the results of the random selection process listed by Application ID number. (PDF)
To determine your completed Year 1 Small ZREC Application's position in the numerical rank, Applicants should look for their project’s “queue” position by Application ID number. Applicants received their Application ID number in the confirmation email that was sent upon successful submittal of a Small ZREC Application. For example, confirmation numbers used the following format - User Name - Applicant ID - Application ID. (PDF)
At the close of the Year 1 Small ZREC, on December 4, 2013, CL&P selected 253 Applications, of which 210 have active service agreements. The Small ZREC Budget of $2.36M was committed with only $10,778 remaining. The remaining $10,778 will be rolled over to the Year 2 Small ZREC Program.
Pursuant to Section 1.8 of the Rules and Process for Submitting Applications for Small ZREC Tariff, the Applications that were in the standby queue expired on December 4, 2013. All non-selected Applicants will need to apply to the Year 2 Small ZREC program to be considered for a Year 2 Small ZREC Service Agreement. There is no preference or advantage offered to non-selected applications from the Year 1 Small ZREC queue.
The CL&P Year 2 Small ZREC Tariff Rate is $103.01/REC.
CL&P will open the Year 2 Small ZREC Tariff Program at 1:00 pm on February 14, 2014. Therefore, the two-week window (as described in the posted Rules and Process for Submitting Applications for the Small ZREC Tariff) will close at 1:00 PM Eastern Prevailing Time (EPT) on Friday, February 28, 2014.
Only applications which are submitted during the two week window will be counted as being submitted at the same date and time. Applications received by CL&P’s system after 1:00 PM EPT on Friday, February 28, 2014 will be in the queue at their actual date and time of submission.
Key Documents for the Small ZREC Program
Click here to submit a Small ZREC Project Application
The following list links to websites and documents related to the LREC/ZREC Program: