Taking the Lead: State Innovations to R educe Greenhouse Gases

1. Taking the Lead: State Innovations to Reduce Greenhouse Gases Commissioner Jack Goldberg Connecticut Department of Public Utility Control Renewable Portfolio Standards: Actions for Reducing Greenhouse Gases National Governors Association Best Practices Workshop Washington, DC March 1, 2002

2. Connecticut Department of Public Utility Control Renewable Energy and RPS Benefits • Reduces air pollution • Decreases greenhouse gas emissions • Decreases water and soil contamination • Promotes fuel diversity • Decreases dependency on fossil fuel imports • Strengthens economic and energy security • Promotes development of renewable energy technologies • Stimulates local job economies- manufacturing, design, installation, servicing and marketing of renewable energy products

3. States with Renewable Portfolio Standards Connecticut Department of Public Utility Control

4. Connecticut Department of Public Utility Control Connecticut Energy Policy Developers • Governor • Legislature • CT Energy Advisory Board • Office of Policy and Management • Department of Environmental Protection • Department of Public Utility Control • CT Innovations, Inc.

5. Connecticut Department of Public Utility Control Connecticut Greenhouse Gas Registry CT DEP uses EPA methodology for greenhouse gas inventory Objectives are to: • Specify primary greenhouse gases & sources • Identify & quantify greenhouse sources in Connecticut • Assemble database of statewide annual greenhouse gas emissions at 1990 levels & for the most recent year with available data • Rank greenhouse gas sources according to their relative contribution to greenhouse gas emissions statewide • Further public understanding of global climate issues & their implications for Connecticut

6. Connecticut Department of Public Utility Control Connecticut Policy onRenewable Energy • Requires suppliers to supply a certain amount of electricity generated using renewable energy sources • Requires consumers to pay a charge on their electric bill which goes into a fund available to support efforts to increase the use of renewable energy sources (CT Clean Energy Fund)

7. Connecticut Department of Public Utility Control Class II Renewables Class I Renewables • Solar Power • Wind Power • Fuel Cells • Methane Gas from Landfills • Biomass Facilities - began operating as of July 1, 1998, and cultivate and harvest biomass in a sustainable manner • Trash-to-Energy • Hydro Power Facilities • Biomass Facilities that • don’t meet the criteria • for a Class I

8. Connecticut Department of Public Utility Control Connecticut Renewable Portfolio Standards (RPS) • Public Act 98-28 established renewable portfolio standards for licensed electric suppliers (retail providers) • Not less than .5% of an electric suppliers total electricity output be generated from Class I renewables and an additional 5.5% of total output from Class I and II • The amount of Class I & Class II required for compliance gradually increases over time from 6% to 13% total renewable energy • Licensed electric suppliers may satisfy requirements of RPS by participating in a renewable energy trading program approved by the state

9. Connecticut Department of Public Utility Control Connecticut Certification for Renewable Generator • Certification process and regulations currently being drafted by DPUC • Renewable certificates assign generators: • Certification number • Date of eligibility • Class I and/or Class II energy source designation • Specific source of energy determined • fuel cell, biomass, etc. • Suppliers submit certification to NEPOOL GIS administrator

10. Connecticut Department of Public Utility Control Renewable Energy Certificates • Emission trading • Create a tradable certificate for a set amount of electricity generated by a renewable-fueled source • Record associated attributes of the energy • Allow for compliance with portfolio standards and alternatives for providers with no renewable generation • Promote competitive market

11. Connecticut Department of Public Utility Control New England Renewable Portfolio Standards • RPS Standards in • Connecticut • Massachusetts • Maine

12. Connecticut Department of Public Utility Control New England Power Pool (NEPOOL)Generation Information System (GIS) GIS Administrator (APX) - develops, implements, administers, operates and maintains the GIS database to: • Create a one-for-one match between energy produced & energy consumed in New England, accommodating imports & exports • Provide hourly generation info for each individual New England generation unit • Produce & assign numbered electronic certificates for each MWh of energy generated with the associated generator-specific attributes • Establish account holder registration for certificate owners • Monitor & document all electronic certificate exchanges/trades establishing trading periods • Prepare required reporting for: account holders, regulatory agencies, publicly available purposes

13. Connecticut Department of Public Utility Control NEPOOL GIS Certificate Information • Fuel Source • Hydro size: Less than 100MW/Greater than 100MW/Hydro type • Solid waste • Biomass: sustainable/low emission, advanced/other • Qualifying cogeneration (ME) • Vintage: year commercially operational or as otherwise required by state regulations • Union labor (MA) • Emissions factors for SOx, NOx, and CO2 : may vary over time or by fuel • Eligibility for state RPS (MA, ME, CT) • Eligibility: determined by the applicable regulatory agency pursuant to the applicable Attribute Laws • Identification of specific unit • Location • Time and date of generation • Certificate ownership share (for multiple owners of a generator)

14. Connecticut Department of Public Utility Control NEPOOL GIS Certificate Trading • Certificates may be transferred through a variety of mechanisms: • Entities will be able to self-supply • Arrangements for bilateral exchanges in advance of actual generation • Purchase of Certificates through a central bulletin board or auction • Exchange of Certificates through private arrangements over a later period of time • The GIS database will be flexible enough to permit new types of transfers as they arise • Entities transferring Certificates must notify the GIS Administrator of the transfer prior to the close of the trading period

15. Connecticut Department of Public Utility Control Maintaining Renewable Energy Certificate Trading System • Certifying renewable energy generators • Managing a tradable certificate accounting system • Verifying retailers’ compliance • Imposing noncompliance penalties

16. Connecticut Department of Public Utility Control Advantages of Tradable Certificate Program • Promotes competitive renewables market • Increases efficiency • Reduces retailers’ compliance risks and compliance costs • Reduces policy costs overall • Provides cost transparency • Provides a low-cost effective way to verify compliance • Easier for owners of small renewable energy systems to participate • Provides ready means for public to support production of renewable energy

17. Funds investment & development of renewable energy sources Graduated Charges Jan. 1, 2000 - .05 cents per kWh July 1, 2002 - .075 cents per kWh July 1, 2004 - .1 cent per kWh $14 million to $29 million annually Administered by CT Innovations, Inc. through the Connecticut Clean Energy Fund (CCEF) Connecticut Department of Public Utility Control Renewable Energy Investment Fund

18. Connecticut Department of Public Utility Control Questions? ?