After outcry, renewable energy project details to be revealed

Wednesday, July 10, 2013

The approval in 2011 of a revamped commercial renewable energy incentive program in Connecticut was heralded by the industry here, particularly solar companies. For years they’d wrestled with unreliable funding that left them constantly unsure of whether they’d be able to proceed on projects.

But a year into full implementation of the new program — despite hundreds of applicants for projects, and more than 100 projects accepted –- no one really knows how well it’s working.

That’s because the names of the companies bidding for and winning projects, as well as their specific locations, are secret under the rules of the program. That means no one knows, for example, whether these power-generating projects are being snatched up by large national companies that can undercut local companies on price. There’s no way to know if that might mean the local jobs the program was expected to create are in fact being created. And it’s unknown whether a large company, like a Wal-Mart, is getting the bulk of the systems.

That may be about to change.

Today, the Public Utilities Regulatory Authority, which established the original program rules, said it had reconsidered and on July 31 would release all previously unreleased information short of identifiers such as bank account numbers for most of the program. [Here is the PURA letter:PURA on ZREC:LREC.docx] But it also said it would accept legal objections until July 22. It’s possible that could push the July 31 date later and/or change what would be released.

The move comes after pressure from the solar energy industry and the Office of Consumer Counsel. But what finally triggered action was a recent Freedom of Information Act request by the Hartford Business Journal to release the information.

“The changes PURA made are appropriate and we’re glad they did it,” said Mike Trahan, executive director of the industry group Solar Connecticut, which had been pushing for releasing the information.

“To meet the expectations of the program it would have to have a positive impact on the local economy,” he said. “We have no way of knowing that unless the information is released.

“If we come to find out that companies are bringing in people from out-of-state, that’s not what legislators had in mind.”

But not everyone is anxious that all the information -– especially those who lost bids -– be revealed.

“Particularly solar companies did not favor having all that intimate information released,” said Paul Michaud, executive director of the Renewable Energy and Efficiency Business Association and also an attorney at Murtha Cullina. His clients include companies that bid on projects. “If they had a project that did not win the solicitation, a lot of project developers had intentions of resubmitting it and thought others might steal it.

“I think that releasing the specific details of winning projects is appropriate.”

The program uses a market-driven concept of renewable energy credits, known as RECs, to pay for renewable energy projects. They are divided into groups by their emission status: ZREC is for zero emissions, mainly solar but also wind and small hydro; LREC is for low emissions, mainly fuel cells as well things like landfill gas.

The state’s two utility companies, Connecticut Light and Power and United Illuminating, administer the programs. In the first round of solicitations, CL&P received 296 bids and accepted 80 – 68 ZRECs and 12 LRECs. UI received 72 bids and accepted 21 – 19 ZRECs and two LRECs. All the accepted ZRECs were solar and all the accepted LRECs were fuel cells.

The utilities purchase the power under 15-year contracts using ratepayer funds. Over the current six-year life of the project plus the contract terms, this is a $1 billion program. The fact that it is ratepayer money is one of the main reasons Trahan and others had argued for greater transparency and accountability.

“It’s a billion dollars gong into a black hole,” Trahan said.

But it wasn’t his only concern. “A billion dollars in clean energy incentives has a huge marketing impact,” he added. “We’re not getting any marketing benefit out of this at all.”

In fact Michaud said officials from the Department of Energy and Environmental Protection came to him asking if he knew of any successful projects that the department might be able to use to tout the results of program. Michaud added he thinks recent consolidation in the solar industry seems to indicate that the larger companies are pushing some of the smaller ones aside.

“I would say most projects went to fewer firms,” he said.

One wrinkle in today’s action is that it may not cover all the projects. The ZRECs are divided into categories by size: small, medium and large. The first solicitation only included medium and large projects. The small projects -– which account for one-third of the funding for ZRECs –- are in progress and it’s unclear whether similar details about those projects will be revealed.

“It’s unfortunate PURA has to be dragged through the FOI process to release information on a ratepayer-paid program,” said Trahan who said the Authority could expect an FOI request from him to release the rest of the information.

But the next round of bids for medium and large ZRECs and LRECs, due this fall, would be covered by the decision. Based on what Michaud said he’s seen, fasten your seatbelts.

“Competition in the second round was ferocious,” he said and then reconsidered. “That’s too weak of a term. As a result we’re going to see unprecedented low prices, which is going to show how successful the LREC and ZREC program is.”