Connecticut § 16-243u - Plan to build peaking generation.

§ 16-243u. Plan to build peaking generation.

Sec. 16-243u. Plan to build peaking generation. From January 1, 2008, until February 1, 2008, any person may, and an electric distribution company shall, submit a plan to build peaking generation, or the electric distribution companies may submit a joint ownership plan to build peaking generation, to be heard in a contested case proceeding before the Public Utilities Regulatory Authority. An electric distribution company's plan shall include its full projected costs and shall demonstrate to the authority that it is not supported in any form of cross subsidization by affiliated entities. Any plan approved by the authority shall (1) include a requirement that the owner of the peaking generation is compensated at cost of service plus reasonable rate of return as determined by the authority, and (2) require that such peaking generation facility is operated at such times and such capacity so as to reduce overall electricity rates for consumers. The authority may retain a consultant to help determine if projected costs included in the plan are good faith preliminary estimates and may require modification of the plan as necessary to protect the best interests of ratepayers. Not later than one hundred twenty days after the plan is submitted, the authority shall approve the plan unless it demonstrates in detail, pursuant to section 16-19e, that such plan is not in the best interests of ratepayers. The authority shall request that any person submitting a plan to submit further information it deems to be in the public interest that the authority shall use in evaluating the proposal. Such person shall only recover the just and reasonable costs of construction of the facility and, in an annual retail generation rate contested case, shall be entitled to recover its prudently incurred costs of such project, including, but not limited to, capital costs, operation and maintenance expenses, depreciation, fuel costs, taxes and other governmental charges and a reasonable rate of return on equity. The authority shall review such recovery of costs consistent with the principles set forth in sections 16-19, 16-19b and 16-19e, provided the return on equity associated with such project shall be established in the initial annual contested case proceeding under this section and updated at least once every four years. A person operating a peaking generation unit pursuant to this section shall bid the unit into all regional independent system operator markets, including the energy market, capacity market or forward reserve market, using cost-of-service principles and pursuant to guidelines established by the authority each year in the annual retail generation rate case pursuant to this section.

(P.A. 07-242, S. 50; P.A. 11-80, S. 1.)

History: P.A. 07-242 effective January 1, 2008; pursuant to P.A. 11-80, “Department of Public Utility Control” and “department” were changed editorially by the Revisors to “Public Utilities Regulatory Authority” and “authority”, respectively, effective July 1, 2011.

Section authorized PURA to determine peaking generation provider's recovery using the general rate-making principles found in Sec. 16-19e and, in doing so, directed PURA to review such provider's recoverable costs to ensure that “the level and structure of rates be sufficient, but no more than sufficient, to allow such provider to recover its operating costs”. 348 C. 532.