Renewable Portfolio Standards - Energy Efficiency Component

Summary

Origin

Established in 1998 and subsequently revised several times, Connecticut's renewables portfolio standard (RPS) requires each electric supplier and each electric distribution company wholesale supplier to obtain at least 48% of its retail load by using renewable energy by January 1, 2030. Specific to energy efficiency, the RPS creates a "carve-out" that requires each electric supplier and each electric distribution company wholesale supplier to obtain at least 4% of its retail load by using combined heat and power (CHP) systems and energy efficiency by 2018.

Electric Demand and Energy Reduction Standard

Within the renewable portfolio standard, separate portfolio standards are required for energy resources classified as "Class I," "Class II," or "Class III." Class III resources eligible for the energy efficiency carve-out include: (1) customer-sited CHP systems, with a minimum operating efficiency of 50%, installed at commercial or industrial facilities in Connecticut on or after January 1, 2006; (2) systems that recover waste heat or pressure from commercial and industrial processes installed on or after April 1, 2007; (3) electricity savings from conservation and load management programs that started on or after January 1, 2006, provided that on or after January 1, 2014, no such programs supported by ratepayers shall be eligible; and (4) any demand-side management project awarded a contract under Conn. Gen. Stat. §16-243m. The revenue from these credits must be divided between the customer and the state Conservation and Load Management Fund, depending on when the Class III systems are installed, whether the owner is residential or nonresidential, and whether the resources received state support.

Electric providers must meet the standard with at least 4% Class III sources by 2018, and thereafter, according to the following schedule:

Energy efficiency and demand-side management programs that provide compliance with the standard are managed by Connecticut's electric utilities. The Connecticut Energy Efficiency Board, appointed by the Connecticut Public Utility Regulatory Authority (PURA) oversees the Connecticut Energy Efficiency Fund, which provides funding for the utilities and other providers' programs.

Cost-Effectiveness and Program Evaluation

To evaluate the cost effectiveness of its efficiency and demand reduction activities, Connecticut law specifies the use of the Utility Cost Test (UCT), which is one of the five "California tests" from the California Standard Practice Manual as its primary test for measuring the cost-effectiveness of energy efficiency programs. Connecticut also uses the Total Resource Cost test (TRC).

In its most recent Conservation and Load Management Plan, the Connecticut Department of Energy and Environmental Protection authorized the development of a Business and Energy Sustainability (BES) Program that allowed customers to self-direct program funds to projects of their own choosing. For more information, please visit energizect.com.