dcsimg

Renewable Energy Credits

LREC/ZREC Program

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.

View the PURA’s April 4, 2012, decision.

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:

  • LREC projects must be no larger than 2,000 kW.
  • There will be three annual LREC solicitations with a starting price cap of $200/REC, and the opportunity for two additional annual solicitations if PURA authorizes them. PURA has the option to modify the price cap after the first year’s solicitation.
  • CL&P will have approximately $3.2 million in annual funding for LREC solicitations.
  • ZREC projects must be no larger than 1,000 kW. Within that limit there will be three project size classes, each with separate funding levels. The three size classes are: up to 100 kW, over 100 kW but less than 250 kW, 250 kW – 1,000 kW.
  • There will be up to six annual ZREC solicitations with a starting price cap of $350/REC; PURA has the option to modify the price cap after the first year’s solicitation.
  • CL&P will have approximately $6.4 million in annual funding for ZREC solicitations.
  • Project must not have received a grant or rebate from the Connecticut Green Bank or its predecessors the Clean Energy Finance and Investment Authority (CEFIA) and the Connecticut Clean Energy Fund (CCEF), although Connecticut Green Bank/CEFIA financing is permitted.
  • Generation must be in service after July 1, 2011. The project must be located behind a CL&P revenue meter. Projects must have a dedicated meter to count the energy being produced for the purposes of reporting to the New England Power Pool (NEPOOL) Generation Information System (GIS). This dedicated meter is known as an REC meter.
  • Projects must meet all CL&P Interconnection Guidelines.
  • A participant in a solicitation may not submit more than one bid for a facility (per customer meter) and may not submit bids for both LREC and ZREC solicitations from a facility.
  • If a project is selected for a contract, performance assurance, in the form of a letter of credit or cash, is required and will be returned after the project goes into service.

Click here for general renewable energy credit information.

How Will CL&P Select Projects under the LREC/ZREC Program?

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 $302.71 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.

Copies of the specific contracts associated with this RFP are on file with the Public Utilities Regulatory Authority (PURA). Although a regulated utility, CL&P is not subject to the Freedom of Information Act ("FOIA"). FOIA requests should be directed to PURA. For your convenience, click here to access the PURA website.

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, which included an additional 15 LREC and ZREC contracts, bringing the total of the Year 2 LREC/ZREC contracts to 105. PURA approved the Final Year 2 Procurement Plan on January 16, 2014, which brought 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.

Click here for a summary of CL&P’s Year 2 LREC and Medium and Large ZREC RFP results.

Click here for the specific Year 2 LREC and Medium and Large ZREC bid price information.

Copies of the specific contracts associated with this RFP are on file with the Public Utilities Regulatory Authority (PURA). Although a regulated utility, CL&P is not subject to the Freedom of Information Act ("FOIA"). FOIA requests should be directed to PURA. For your convenience, click here to access the PURA website.

 

On April 24, 2014, CL&P and UI jointly issued the Year 3 LREC/ZREC RFP.  CL&P and UI accepted bids until the close of the bidding window, which closed at 1:00 p.m. on June 5, 2014.  The Companies ranked eligible bids by evaluated bid price, up to the maximum bid price of $200/LREC and $302.71 for Medium and Large ZRECs in this RFP.  

The following schedule is applicable to the Year 3 LREC/ZREC RFP:

Action Item Date   
Release of RFP April 24, 2014 
Bidders Conference May 5, 2014     8:30 AM-12:30 PM 
Deadline for Submission of Questions May 16, 2014 
Bid Forms Due June 5, 2014 by 1:00 p.m. (Eastern Prevailing Time “EPT”), at which time the Pricing shall become firm, irrevocable and binding. 
Selection and Notification of Winning Bidders  On or about July 17, 2014 
Standard Contracts Execution & Provision of Performance Assurance After Selection and Notification of Winning Bidders.  Bidders will have to return partially executed contracts and Performance Assurance by the date established by the Companies which is expected to be approximately 10 business days after transmittal of execution version of Standard Contract. 
Standard Contract(s) Filed with PURA Following selection of Winning Bidder(s) and execution of Standard Contracts during each Round. 
Commencement of Service  In accordance with Standard Contracts 

On July 17, 2014, in accordance with the schedule set forth in the Request for Proposals for LRECs and Medium and Large ZRECs issued on April 24, 2014 (“RFP”), CL&P notified winning Bidders whose Bids were selected as winning Bids pursuant to the RFP process.  In addition, CL&P also notified other Bidders that their Bids have been designated as “standby” Bids pursuant to Section 3.1.2 of the RFP.

CL&P received 213 Bids under this round of the RFP.  See the chart below for a limited summary of the anticipated number of contracts for each category that has been initially selected for the Year 3 LREC/ZREC RFP.  CL&P emphasizes that these numbers are preliminary, and are subject to change if Bidders choose not to accept the offer or execute contracts, or do not provide Performance Assurance.  IF a Bidder does not accept the offer, execute the contract or provide Performance Assurance as required, CL&P will move to the next lowest priced project on the standby list in the appropriate project category, until the available budget has been committed.  CL&P’s filing of executed contracts with PURA will include more detailed summary bid information, including average bid and contract prices per bid category.  There is no definitive date for the PURA filing at this time.

The following table outlines the selection process for the Year 3 LREC/ZREC RFP:

Category LRECs Medium ZRECs Large ZRECs Total to Date 
Size Up to 2MW100-250 kW250-1,000 kW 
CL&P Approx. Year 3 RFP Budget ($M) $4.7 $2.8 $2.3 $9.8 
15 Year Contract Approx. Value ($M) $70.5 $42 $34.5 $147  
Phase 1 Selected 1810928155 
Phase 1 Fully Executed 109523128 
Phase 2 Selected 4037 
Phase 2 Fully Executed 2013 
Phase 3 Selected 0022 
 
Further information regarding the RFP results is subject to the disclosure and confidentiality rulings issued by the Public Utilities Regulatory Authority, and the Company will release such information accordingly.
 

Key Documents for Year 3 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.

The Year 2 Small ZREC Tariff Program opened at 1:00 p.m., on February 14, 2014. The two-week window (as described in the posted Rules and Process for Submitting Applications for the Small ZREC Tariff) ended as of 1:00 p.m. Eastern Prevailing Time (EPT) on February 28, 2014.

At the close of the Year 2 Small ZREC two-week window on February 28, 2014, CL&P received 460 completed Year 2 Small ZREC Applications, which totaled over $3.76M in requested Year 2 Small ZREC funding - more than 74% above CL&P’s available Year 2 Small ZREC budget of $2.16M. 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 two-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.

CL&P has made it down to #368 in the Queue.  At this time, CL&P will be selecting additional contracts (Phase 6), and will continue to move down the Queue until the available budget is committed. 

The following table summarizes the current status of the Year 2 Small ZREC Tariff program at this time: 

 

Selection Phase # of Projects Selected # of Fully Executed Service Agreements 
1263211
26243
32016
431
532
Total To Date   273 
 

Click here to view the results of the random selection process listed by Application ID number.

To determine your completed 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.

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: