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.

Overview: The LREC/ZREC Program

 

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 from the Clean Energy Finance and Investment Authority (CEFIA), although 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.

Competitive Solicitation for LRECs and Large and Medium ZRECs:

 

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.

Year 1 RFP Results

 

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.

Year 2 RFP – Issued April 25, 2013

 

On April 25, 2013, CL&P and UI jointly issued the Year 2 LREC/ZREC RFP. CL&P and UI will accept bids until the close of the bidding window, which closes at 1 pm on June 13, 2013. The Companies will rank eligible bids by evaluated bid price, up to the maximum bid price of $200/LREC and $325.50 for Medium and Large ZRECs in this RFP. See the RFP schedule below:

Action ItemDATE
Release of RFPApril 25, 2013
Bidders ConferenceMay 10, 2013
Deadline for Submission of QuestionsMay 30, 2013
Bid Forms DueJune 13, 2013 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 BiddersOn or about July 18, 2013
Standard Contracts ExecutionAfter Selection and Notification of Winning Bidders.  Bidders will have to return partially executed contracts by the date established by the Companies which is expected to be approximately 15 business days.
Standard Contract(s) Filed with PURAFollowing selection of winning Bidder(s) and execution of Standard Contracts during each Round.
Commencement of ServiceIn accordance with Standard Contracts

Key Documents for Year 2 LREC/ZREC RFP:

 

Small ZREC Tariff:

 

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. 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. This program will not be available until the first year’s RFP for Medium ZRECs is completed, and will be available on a first-come, first-served basis.

The CL&P Small ZREC Tariff Rate is currently $164.22/REC.

The first round of the 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. Only applications submitted during the two week window were counted as being submitted at the same date and time. Applications received by CL&P’s system after 12:00 PM EPT on Tuesday, January 22, 2013 will be in the queue at their actual date and time of submission.

At the close of the Small ZREC 2-week window on January 22, 2013, CL&P received 479 completed Small ZREC Applications, which totaled over $5.6M in requested Small ZREC funding - more than 138% above CL&P’s available Small ZREC budget of $2.36M for this round of the Small ZREC Program. 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 process 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 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) 

CL&P has started reviewing Applications, verifying completeness and eligibility and will be qualifying Small ZREC Applications, in rank order of the queue until the available Small ZREC budget has been allocated. Based on available funding, we anticipate being able to offer contracts to approximately 200 applications (subject to qualification). CL&P stresses that this information is PRELIMINARY and SUBJECT TO CHANGE. If applications are disqualified, withdrawn or terminated for any reason, the next application(s) in the queue will be selected.

Key Documents for the Small ZREC Program

Click here to submit a Small ZREC Project Application 

Supporting Program Documents:

 

The following list links to websites and documents related to the LREC/ZREC Program: