Chapter 283 - Telephone, Gas, Power and Water Companies

Sec. 16-243n. Design and submission of time-varying rate proposals. (a) Not later than October 1, 2027, each electric distribution company, as defined in section 16-1, shall submit an application to the Public Utilities Regulatory Authority to implement time-varying rates for (1) residential customers, and (2) commercial and industrial customers.

(b) (1) Time-varying rate proposals for transmission, distribution and all other retail electric rate components submitted pursuant to subsection (a) of this section shall (A) provide for fixed rates across twenty-four-hour cycles within each season, (B) be based on projected seasonal demand and include on-peak rates, and (C) adequately incentivize the cost-effective shifting of load to off-peak periods by applying an appropriate price differential between on-peak and off-peak time-varying rates. The design of such rates, including the price differential between on-peak and off-peak time-varying rates, shall be consistent with empirical research conducted by the electric distribution company and other rate-design experts.

(2) Any application submitted pursuant to subsection (a) of this section that proposes a seasonal rate component to such time-varying rates shall submit the following concerning such proposed seasonal rates: (A) Any proposal for differentiation of generation, transmission and distribution energy and demand rates (i) into summer and nonsummer periods, at a minimum, and if cost differences between summer and nonsummer periods are substantial, (ii) into winter and shoulder month periods, with consideration of projected electric customer acceptance and usage of such rates, and (B) the appropriate phase-in period over which time electric customers may adjust to seasonal rates without experiencing a sudden, significant increase in electricity prices.

(3) Any application submitted pursuant to subsection (a) of this section shall propose to establish (A) such time-varying rates through an approved revenue recovery mechanism for transmission and distribution rates, and (B) a revenue reconciliation mechanism whereby any revenue undercollected or overcollected through such time-varying rates is recovered or refunded, as appropriate, through a subsequent billing reconciliation adjustment.

(4) Time-varying rates submitted pursuant to subsection (a) of this section shall be designed as default rates, with consideration for principles of gradualism and customer acceptance and established exceptions as deemed appropriate by the authority, including, but not limited to, for medically protected and financial hardship customers, and provided the application (A) proposes a comprehensive customer education program that meets the requirements of section 16-243ii; (B) provides for a clearly defined opt-out process concerning such rates; and (C) gives due consideration to the interaction of any time-varying rate design with existing and foreseeable low-income rates and programs.

(c) The authority shall hold a hearing that shall be conducted as a contested case, in accordance with the provisions of chapter 54, to approve, reject or modify applications submitted pursuant to subsection (a) of this section. No application for time-varying rates shall be approved by the authority unless (1) such rates reasonably reflect the cost of service during their respective time-varying periods, (2) the costs associated with implementation, the impact on customers and benefits to the utility system justify implementation of such rates, and (3) such rates are expected to alter patterns of customer consumption of electricity without undue adverse effect on the customer.

(d) Each electric distribution company shall assist customers to help manage loads and reduce peak consumption through the comprehensive plan developed pursuant to section 16-245m.

(June Sp. Sess. P.A. 05-1, S. 13; P.A. 07-242, S. 85; P.A. 11-80, S. 1; P.A. 14-134, S. 9; P.A. 25-173, S. 20.)

History: June Sp. Sess. P.A. 05-1 effective July 21, 2005; P.A. 07-242 amended Subsec. (a)(1) to require implementation of time-of-use rates that may include mandatory peak, shoulder and off-peak time-of-use rates and amended Subsec. (e)(1) to make a conforming change, effective June 4, 2007; 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; P.A. 14-134 deleted former Subsecs. (b) and (d) re issuance of comparative analyses to certain customers, deleted former Subsec. (g) re authority to conduct a contested case to determine exemption standards for certain customers and redesignated existing Subsecs. (c), (e) and (f) as Subsecs. (b), (c) and (d), respectively, effective June 6, 2014; P.A. 25-173 amended Subsecs. (a) and (c) to replace “time-of-use” with “time-varying” and make technical and conforming changes and further amended Subsec. (a) by replacing October 1, 2005, with October 1, 2027, and deleting application provisions, and added new Subsec. (b) to require electric distribution companies to design and submit proposals to implement time-varying rates, effective July 1, 2025.

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Sec. 16-243ee. Electric energy storage resource programs and associated funding mechanisms. Report. (a) On or before January 1, 2022, the Public Utilities Regulatory Authority shall initiate a proceeding to develop and implement one or more programs, and associated funding mechanisms, for electric energy storage resources connected to the electric distribution system. The authority shall establish (1) one or more programs for the residential class of electric customers, and (2) one or more programs for commercial and industrial classes of electric customers. The authority shall solicit input from the Department of Energy and Environmental Protection, the Connecticut Green Bank, the electric distribution companies and the Office of Consumer Counsel in developing such programs.

(b) On or before January 1, 2022, the authority shall report the status of the proceeding described in subsection (a) of this section, in accordance with the provisions of section 11-4a, to the joint standing committee of the General Assembly having cognizance of matters relating to energy.

(c) In undertaking the proceeding described in subsection (a) of this section, the authority shall consider one or more programs and rate designs to incentivize the deployment of electric energy storage technologies connected to the electric distribution system that most effectively leverage the value of such technologies to achieve objectives including, but not limited to, (1) providing positive net present value to all ratepayers, or a subset of ratepayers paying for the benefits that accrue to that subset of ratepayers; (2) providing multiple types of benefits to the electric grid, including, but not limited to, customer, local, or community resilience, ancillary services, leveling out peaks in electricity use or that support the deployment of other distributed energy resources; (3) fostering the sustained, orderly development of a state-based electric energy storage industry; and (4) maximizing the value from the participation of energy storage systems in capacity markets. The authority shall include consideration of all energy storage configurations that are connected to the distribution system, including systems connected in front of the meter and not located at a customer premises. The authority shall also consider programs and rate designs to incentivize uses of electric energy storage technologies connected to the electric distribution system that avoid or defer investment in traditional electric distribution system capacity upgrades.

(d) The authority may select the Connecticut Green Bank, the Department of Energy and Environmental Protection, the electric distribution companies, a third party it deems appropriate or any combination thereof, to implement one or more programs for electric energy storage resources connected to the electric distribution system, as directed by the Public Utilities Regulatory Authority.

(e) Notwithstanding any provision of this section, the authority shall incorporate the program established pursuant to section 16-244ee into the programs authorized pursuant to this section.

(P.A. 21-53, S. 2; P.A. 24-151, S. 175; P.A. 25-173, S. 55.)

History: P.A. 21-53 effective July 1, 2021; P.A. 24-151 added Subsec. (e) re authority to incorporate program established pursuant to Sec. 16-244ee into authorized programs, effective July 1, 2024; P.A. 25-173 amended Subsec. (a) to delete Subdiv. (3) re energy storage systems connected to electric distribution system in front of customer electric meter.

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Sec. 16-243ii. Customer education programs concerning time-varying rates. (a) Each electric distribution company, as defined in section 16-1, shall, in consultation with the Office of Consumer Counsel and the Commissioner of Energy and Environmental Protection, design a comprehensive customer education and engagement program for the purpose of informing electric distribution customers of the benefits of time-varying rates and encouraging such customers to utilize such rates and any available technology that enables the realization of customer cost savings on such time-varying rates. The customer education and engagement program design shall include (1) approved methods of customer outreach, education and engagement activities, including strategies to maximize customer cost savings, (2) objective performance standards regarding the program's implementation, and (3) mandatory reporting requirements for electric distribution companies concerning such companies' compliance with the program requirements, including the submission of documentation and data as required by the Public Utilities Regulatory Authority.

(b) In any rate case initiated on or after July 1, 2025, an electric distribution company shall submit as part of its rate amendment application a detailed proposal, or an update to a proposal previously approved pursuant to this subsection, to develop the program required under subsection (a) of this section for review and approval by the authority. Upon approval by the authority, the program shall be administered by the electric distribution companies.

(P.A. 25-173, S. 21.)

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Sec. 16-244m. Procurement Plan re standard service. (a)(1) On or before January 1, 2012, and annually thereafter, the procurement manager of the Public Utilities Regulatory Authority, in consultation with each electric distribution company, the Consumer Counsel, the Commissioner of Energy and Environmental Protection, and others at the procurement manager's discretion, including, but not limited to, a municipal energy cooperative established pursuant to chapter 101a, other than entities, individuals and companies or their affiliates potentially involved in bidding on standard service, shall develop a plan for the procurement of electric generation services and related wholesale electricity market products with the goal of reducing the average cost of standard service for standard service customers while minimizing the cost volatility in the procurement of such services or products. The procurement plan (A) shall provide for the option of competitive solicitation for load-following electric service, (B) shall include a provision requiring each electric distribution company, individually or jointly, to develop and maintain the ability to engage in dynamic market purchases for not less than twenty-five per cent of the standard service load in a flexible manner designed to allow such company to purchase energy products during periods of lower energy cost, subject to a risk mitigation provision pursuant to subdivision (1) of subsection (b) of this section, based on the active monitoring of day-ahead and real-time energy markets, (C) may include any other contracts, including, but not limited to, contracts for generation or other electricity market products and financial contracts, (D) may provide for the use of varying lengths of contracts, and (E) may include the use of energy, capacity or other electric products approved in section 16a-3m. If such plan includes the purchase of full requirements contracts, it shall include an explanation of why such purchases are in the best interests of standard service customers. For the purposes of this section, “dynamic market purchases” means the purchase of energy, capacity or other market products necessary to serve standard service electric load using market purchases in the regional independent system operator markets, financial contracts or other variable procurement techniques.

(2) On or before February 15, 2026, in consultation with the electric distribution companies, the Consumer Counsel and the Commissioner of Energy and Environmental Protection, the procurement manager shall submit to the authority a proposed amendment of such procurement plan for approval or modification. Such proposed amendment shall (A) include, but not be limited to, modifications regarding the potential use of (i) multiple competitive solicitations each year for the procurement of energy at intervals identified in the procurement plan, or as determined from time to time by the procurement manager to serve the best interests of the ratepayers, provided such determination is in accordance with the applicable provisions of the procurement plan, (ii) contracts with durations not exceeding three years for the procurement of energy, and (iii) fixed-price energy supply contracts in addition to full requirements contracts, (B) establish guidelines for each electric distribution company concerning the implementation of the procurement plan, including (i) the requirement that each such company develop and maintain the capacity to engage in dynamic market purchases, and (ii) direction to each electric distribution company regarding the circumstances under which dynamic market purchases could be exercised, including a requirement that the ability to pursue the procurement methodologies as described in subdivision (1) of this subsection incrementally increase or decrease over time based on any demonstrated benefit to ratepayers, and (C) include a risk mitigation provision pursuant to subdivision (1) of subsection (b) of this section. The authority shall initiate an uncontested proceeding to review and modify or approve the amendment to the procurement plan submitted pursuant to this subdivision.

(3) If the procurement manager determines that an interim amendment to, or a temporary nonconformity with, the procurement plan may substantially further the goal of effectively procuring standard service while minimizing standard service cost volatility in relation to a specific procurement, the procurement manager shall adopt a waiver from the procurement plan applicable exclusively to such procurement. Upon the adoption of such waiver, the procurement manager shall immediately file notice of such interim amendment or nonconformity and the adoption of such waiver with the authority. Upon receipt of such notice from the procurement manager, the authority shall provide notice of the proposed waiver to the Office of Consumer Counsel, the Commissioner of Energy and Environmental Protection and the electric distribution companies. Upon receipt of such notice from the authority, the counsel, commissioner or any such company may submit comments concerning such waiver to the authority not later than two business days after the receipt of such notice. Such waiver shall be deemed adopted by the authority if the authority takes no action on such waiver not later than three business days after the comment period concerning such waiver for the counsel, commissioner and companies has expired.

(b) (1) In addition to the requirements of subsection (a) of this section, the procurement plan shall include a risk mitigation provision that defines the acceptable parameters for such dynamic market purchases, including guidelines for the use of financial contracts. Each electric distribution company shall comply with the provisions of the procurement plan, including any amendments to such plan or waivers of provisions of such plan adopted by the authority. Any review concerning the prudence of an electric distribution company's dynamic market purchases shall be conducted by the authority in a contested proceeding and shall be limited to an evaluation of such company's adherence to the dynamic market purchase requirements of the procurement plan.

(2) Costs incurred under this section shall be recovered as follows:

(A) All reasonable costs associated with the development and implementation of the procurement plan by the authority shall be recoverable through the assessment imposed pursuant to section 16-49.

(B) All reasonable and prudent operating costs incurred by an electric distribution company in the development and implementation of the procurement plan shall be recoverable on a timely basis through a reconciling bypassable component of the electric rates as determined by the authority, including incremental staffing and financial systems providing the functional capacity and expertise to support dynamic market purchases.

(C) All costs associated with the purchase of the actual net costs of procuring and providing standard service pursuant to this section shall be recovered in electric rates on a timely basis in accordance with section 16-244c.

(c) The procurement plan shall identify the method that shall be used by an electric distribution company to develop the proxy price for that portion of standard service procured through dynamic market purchases. Each electric distribution company shall pay for the costs of such dynamic market purchases in accordance with the terms of the applicable contracts. The actual costs of dynamic market purchases shall be reconciled to the proxy price for such costs, and the actual net cost of such dynamic market purchases shall be recovered in electric rates on a timely basis in accordance with section 16-244c.

(d) The procurement manager shall, not less than annually, prepare a written report on the implementation of the procurement plan. If the procurement manager finds that an amendment to the plan may substantially further the goals to effectively procure standard service, generally, while minimizing the cost volatility in such procurement, the procurement manager may petition the Public Utilities Regulatory Authority for such an amendment. The authority shall provide notice of the proposed amendment to the Office of Consumer Counsel, the Commissioner of Energy and Environmental Protection and the electric distribution companies. The Office of Consumer Counsel, the Commissioner of Energy and Environmental Protection and the electric distribution companies shall have fourteen business days from the date of such notice to request an uncontested proceeding and a technical meeting of the authority regarding the proposed amendment, and the authority shall hold such proceeding and meeting, if requested. After such proceeding and meeting, if requested, the authority may approve, modify or deny the proposed amendment. The authority's ruling on the proposed amendment shall occur not later than ninety days after the technical meeting, if such meeting is requested, or not later than one hundred twenty days after the expiration of the time for requesting a technical meeting if no technical meeting is requested. The authority may maintain the confidentiality of the technical meeting to the full extent allowed by law.

(e) The costs of procurement for standard service shall be borne solely by the standard service customers.

(f) (1) The Public Utilities Regulatory Authority may initiate an uncontested proceeding to amend the procurement plan from time to time.

(2) Not later than April 1, 2026, and annually thereafter, the Public Utilities Regulatory Authority shall submit a report, in accordance with the provisions of section 11-4a, to the joint standing committee of the General Assembly having cognizance of matters relating to energy regarding the procurement plan and its implementation. Any such report may be submitted in conjunction with the report of the authority required pursuant to section 16-245x.

(P.A. 11-80, S. 92; P.A. 13-298, S. 14; P.A. 25-173, S. 31.)

History: P.A. 11-80 effective July 1, 2011; P.A. 13-298 amended Subsecs. (a) and (d) to replace “Department of Energy and Environmental Protection” with “Public Utilities Regulatory Authority”, amended Subsec. (a) to designate existing provisions as Subdiv. (1) and amend same to add Commissioner of Energy and Environmental Protection re consultation at procurement manager's discretion, and add Subdiv. (2) re recovery of reasonable costs associated with developing the plan, amended Subsec. (b) to delete provision re procurement manager meeting with commissioner, amended Subsec. (d)(2) to allow electronic submission of report, and made technical changes, effective July 8, 2013; P.A. 25-173 amended Subsec. (a)(1) to require procurement manager consult with Consumer Counsel and Commissioner of Energy and Environmental Protection re plan, replace provision re plan reduce cost of standard service while maintaining reasonable cost volatility with goal of reducing cost of standard service for customers while minimizing cost volatility, designate existing provision re competitive solicitation as Subpara. (A) and amend same to be optional, add requirement re electric distribution companies develop ability to purchase not less than 25 per cent of electricity used in standard service through dynamic market approach as Subpara. (B), designate existing provisions re other contracts and varying lengths of contracts as Subparas. (C) and (D), add new Subpara. (E) re use of electric products approved in Sec. 16a-3m, add definition of “dynamic market purchases” and make technical changes, replaced provisions in Subsec. (a)(2) re cost recovery with provisions re proposed amendment of plan to be submitted to authority, added Subsec. (a)(3) re waiver from procurement plan, added new Subsec. (b) re procurement plan include risk mitigation provisions for dynamic market purchases of electricity, added new Subsec. (c) re recovery of costs for dynamic market purchases, redesignated existing Subsecs. (b) to (d) as Subsecs. (d) to (f) and substantially revised same.

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Sec. 16-244z. Renewable energy tariffs. (a)(1)(A) On or before September 1, 2018, the Public Utilities Regulatory Authority shall initiate a proceeding to establish a procurement plan for each electric distribution company pursuant to this subsection and may give a preference to technologies manufactured, researched or developed in the state, provided such procurement plan is consistent with and contributes to the requirements to reduce greenhouse gas emissions in accordance with section 22a-200a. Each electric distribution company shall develop such procurement plan in consultation with the Department of Energy and Environmental Protection and shall submit such procurement plan to the authority not later than sixty days after the authority initiates the proceeding pursuant to this subdivision, provided the department shall submit the program requirements pursuant to subparagraph (C) of this subdivision on or before July 1, 2019. The authority may require such electric distribution companies to conduct separate solicitations pursuant to subdivision (4) of this subsection for the resources in subparagraphs (A), (B) and (C) of said subdivision, including separate solicitations based upon the size of such resources to allow for a diversity of selected projects.

(B) On or before September 1, 2018, the authority shall initiate a proceeding to establish tariffs that provide for twenty-year terms of service described in subdivision (3) of this subsection for each electric distribution company pursuant to subparagraphs (A) and (B) of subdivision (2) of this subsection. In such proceeding, the authority shall establish the period of time that will be used for calculating the net amount of energy produced by a facility and not consumed, provided the authority shall assess whether to incorporate time-of-use rates or other dynamic pricing and such period of time shall be either (i) in real time, (ii) in one day, (iii) in any fraction of a day not to exceed one day, or (iv) in any period of time greater than one day up to and including one month. In such proceeding, the authority shall consider the findings of the study of the value of distributed energy resources conducted pursuant to section 16a-3o. The rate for such tariffs shall be established by the solicitation pursuant to subdivision (2) of this subsection.

(C) On or before September 1, 2018, the Department of Energy and Environmental Protection shall (i) initiate a proceeding to develop program requirements and tariff proposals for shared clean energy facilities eligible pursuant to subparagraph (B) of subdivision (2) of this subsection, including, but not limited to, the requirements in subdivision (6) of this subsection, and (ii) establish either or both of the following tariff proposals: (I) A tariff proposal that includes a price cap on a cents-per-kilowatt-hour basis for any procurement for such resources based on the procurement results of any other procurement issued pursuant to this subsection, and (II) a tariff proposal that includes a tariff rate for customers eligible under subparagraph (B) of subdivision (2) of this subsection based on energy policy goals identified by the department in the Comprehensive Energy Strategy pursuant to section 16a-3d. On or before July 1, 2019, the department shall submit any such program requirements and tariff proposals to the authority for review and approval. On or before January 1, 2020, the authority shall approve or modify such program requirements and tariff proposals submitted by the department. If the authority approves two tariff proposals pursuant to this subparagraph, the authority shall determine how much of the total compensation authorized for customers eligible under this subparagraph pursuant to subparagraph (A) of subdivision (1) of subsection (c) of this section shall be available under each tariff.

(2) Not less than once per year, each electric distribution company shall jointly or individually solicit and file with the Public Utilities Regulatory Authority for its approval one or more projects selected resulting from any procurement issued pursuant to subdivision (1) of this subsection that are consistent with the tariffs approved by the authority pursuant to subparagraphs (B) and (C) of subdivision (1) of this subsection and that are applicable to (A) customers that own or develop new generation projects on a customer's own premises that are less than five megawatts in size, serve the distribution system of an electric distribution company, are constructed after the solicitation conducted pursuant to subdivision (4) of this subsection to which the customer is responding, and use a Class I renewable energy source that emits no pollutants, and (B) customers that own or develop new generation projects that are a shared clean energy facility, consistent with the program requirements developed pursuant to subparagraph (C) of subdivision (1) of this subsection. For purposes of this section, “shared clean energy facility” means a Class I renewable energy source that (i) after January 1, 2026, emits no pollutants, (ii) is served by an electric distribution company, (iii) has a nameplate capacity rating of five megawatts or less, and (iv) has at least two subscribers. Any project that is eligible pursuant to subparagraph (B) of this subdivision shall not be eligible pursuant to subparagraph (A) of this subdivision.

(3) A customer that is eligible pursuant to subparagraph (A) of subdivision (2) of this subsection may elect in any such solicitation to utilize either (A) a tariff for the purchase of all energy and renewable energy certificates on a cents-per-kilowatt-hour basis, or (B) a tariff for the purchase of any energy produced by a facility and not consumed in the period of time established by the authority pursuant to subparagraph (B) of subdivision (1) of this subsection and all renewable energy certificates generated by such facility on a cents-per-kilowatt-hour basis, subject to any tariff terms, conditions or other stipulations of the authority, including, but not limited to, stipulations regarding the capacity rights of a given facility.

(4) Each electric distribution company shall jointly or individually conduct an annual solicitation or solicitations, as determined by the authority, for the purchase of energy and renewable energy certificates produced by eligible generation projects under this subsection over the duration of each applicable tariff. Generation projects eligible pursuant to subparagraph (A) of subdivision (2) of this subsection shall be sized so as not to exceed the load at the customer's individual electric meter or a set of electric meters, when such meters are combined for billing purposes, as determined by the authority, unless such customer is a state, municipal or agricultural customer, then such generation project shall be sized so as not to exceed the load at such customer's individual electric meter or a set of electric meters at the same customer premises, when such meters are combined for billing purposes, and the load of up to five state, municipal or agricultural beneficial accounts, as defined in section 16-244u, identified by such state, municipal or agricultural customer, and such state, municipal or agricultural customer may include the load of up to five additional nonstate or municipal beneficial accounts, as defined in section 16-244u, when sizing such generation project, provided such accounts are critical facilities, as defined in subdivision (2) of subsection (a) of section 16-243y, and are connected to a microgrid.

(5) The maximum selected purchase price of energy and renewable energy certificates on a cents-per-kilowatt-hour basis in any given solicitation shall not exceed such maximum selected purchase price for the same resources in the prior year's solicitation, unless the authority makes a determination that there are changed circumstances in any given year. For the first year solicitation issued pursuant to this subsection, the authority shall establish a cap for the selected purchase price for energy and renewable energy certificates on a cents-per-kilowatt-hour basis for any resources authorized under this subsection.

(6) The program requirements for shared clean energy facilities developed pursuant to subparagraph (C) of subdivision (1) of this subsection shall include, but not be limited to, the following:

(A) The department shall allow cost-effective projects of various nameplate capacities that may allow for the construction of multiple projects in the service area of each electric distribution company that operates within the state.

(B) The department shall determine the billing credit for any subscriber of a shared clean energy facility that may be issued through the electric distribution companies' monthly billing systems, and establish consumer protections for subscribers and potential subscribers of such a facility, including, but not limited to, disclosures to be made when selling or reselling a subscription.

(C) Such program shall utilize one or more tariff mechanisms with the electric distribution companies for a term not to exceed twenty years, subject to approval by the Public Utilities Regulatory Authority, to pay for the purchase of any energy products and renewable energy certificates produced by any eligible shared clean energy facility, or to deliver any billing credit of any such facility.

(D) The department shall limit subscribers to (i) low-income customers, (ii) moderate-income customers, (iii) small business customers, (iv) state or municipal customers, (v) commercial customers, and (vi) residential customers who can demonstrate, pursuant to criteria determined by the department in the program requirements recommended by the department and approved by the authority, that they are unable to utilize the tariffs offered pursuant to subsection (b) of this section.

(E) The department shall require that (i) not less than twenty per cent of the total capacity of each shared clean energy facility is sold, given or provided to low-income customers, and (ii) not less than sixty per cent of the total capacity of each shared clean energy facility is sold, given or provided to low-income customers, moderate-income customers or low-income service organizations. The authority may modify such shared clean energy facility capacity requirements for the limited purpose of aligning the allocation of shared clean energy facility capacity with the requirements of any federal acts providing renewable energy incentives.

(F) The department may allow preferences to projects that serve low-income customers and shared clean energy facilities that benefit customers who reside in environmental justice communities.

(G) The department may create incentives or other financing mechanisms to encourage participation by low-income customers.

(H) The department may require that not more than forty per cent of the total capacity of each shared clean energy facility is sold to commercial customers.

(7) For purposes of this subsection:

(A) “Environmental justice community” has the same meaning as provided in subsection (a) of section 22a-20a;

(B) “Low-income customer” means an in-state retail end user of an electric distribution company (i) whose income does not exceed sixty per cent of the state median income, adjusted for family size, or (ii) that is an affordable housing facility. The authority may modify such definition for the limited purpose of aligning such definition with the requirements of any federal acts providing renewable energy incentives;

(C) “Low-income service organization” means a for-profit or nonprofit organization that provides service or assistance to low-income individuals; and

(D) “Moderate-income customer” means an in-state retail end user of an electric distribution company whose income is between sixty per cent and one hundred per cent of the state median income, adjusted for family size. The authority may modify such definition for the limited purpose of aligning such definition with the requirements of any federal acts providing renewable energy incentives.

(b) (1) On or before July 1, 2020, the authority shall initiate a proceeding to establish (A) tariffs for each electric distribution company pursuant to subdivision (2) of this subsection, (B) a rate for such tariffs, which may be based upon the results of one or more competitive solicitations issued pursuant to subsection (a) of this section, or on the average cost of installing the generation project and a reasonable rate of return that is just, reasonable and adequate, as determined by the authority, and shall be guided by the Comprehensive Energy Strategy prepared pursuant to section 16a-3d, and (C) the period of time that will be used for calculating the net amount of energy produced by a facility and not consumed, provided the authority shall assess whether to incorporate time-of-use rates or other dynamic pricing and such period of time shall be either (i) in real time, (ii) in one day, (iii) in any fraction of a day not to exceed one day, or (iv) in any period of time greater than one day up to and including one month. In such proceeding, the authority shall consider the findings of the study of the value of distributed energy resources conducted pursuant to section 16a-3o. The authority shall issue a final decision in such proceeding on or before July 1, 2021. The authority may modify such rate for new customers under this subsection based on changed circumstances and may establish an interim tariff rate prior to the expiration of the residential solar investment program pursuant to subsection (b) of section 16-245ff as an alternative to such program, provided any residential customer utilizing a tariff pursuant to this subsection at such customer's electric meter shall not be eligible for any incentives offered pursuant to section 16-245ff at the same such electric meter and any residential customer utilizing any incentives offered pursuant to section 16-245ff at such customer's electric meter shall not be eligible for a tariff pursuant to this subsection at the same such electric meter. For rates offered pursuant to subparagraph (A) or (B) of subdivision (2) of this subsection, on and after January 1, 2026, the authority shall establish a nonbypassable charge as part of the netting tariff offering at a rate equal to at least three and one-quarter cents and shall adjust the compensation offered pursuant to the buy-all tariff such that the rates offered pursuant to both tariff offerings are substantially similar.

(2) On and after January 1, 2022, each electric distribution company shall offer the following options to residential customers for the purchase of products generated from a Class I renewable energy source that emits no pollutants and that is located on a customer's own premises and has a nameplate capacity rating of twenty-five kilowatts or less for a term not to exceed twenty years: (A) A tariff for the purchase of all energy and renewable energy certificates on a cents-per-kilowatt-hour basis; and (B) a tariff for the purchase of any energy produced and not consumed in the period of time established by the authority pursuant to subparagraph (C) of subdivision (1) of this subsection and all renewable energy certificates generated by such facility on a cents-per-kilowatt-hour basis, subject to any tariff terms, conditions or other stipulations of the authority, including, but not limited to, stipulations regarding the capacity rights of a given facility. A residential customer shall select either option authorized pursuant to subparagraph (A) or (B) of this subdivision, consistent with the requirements of this section. Such generation projects shall be sized so as not to exceed the load at the customer's individual electric meter or, in the case of a multifamily dwelling that qualifies under this subsection, the load of the premises, from the electric distribution company providing service to such customer, pursuant to any rules established by the authority and as determined by such electric distribution company. For purposes of this section, “residential customer” means a customer of a single-family dwelling, a multifamily dwelling consisting of two to four units, or a multifamily dwelling consisting of five or more units, provided in the case of a multifamily dwelling consisting of five or more units, (i) not less than sixty per cent of the units of the multifamily dwelling are occupied by persons and families with income that is not more than sixty per cent of the area median income for the municipality in which it is located, as determined by the United States Department of Housing and Urban Development, or (ii) such multifamily dwelling is determined to be affordable housing by the Public Utilities Regulatory Authority in consultation with the Department of Energy and Environmental Protection, Department of Housing, Connecticut Green Bank, Connecticut Housing Finance Authority and United States Department of Housing and Urban Development. In the case of a multifamily dwelling consisting of five or more units, a generation project shall only qualify under this subsection if: (I) Each of the dwelling units receives an appropriate share of the benefits from the generation project, and (II) no greater than an appropriate share of the benefits from the generation project is used to offset common area usage. The Public Utilities Regulatory Authority shall initiate an uncontested proceeding to implement the distribution of the benefits from the generation project pursuant to this section.

(c) (1) (A) Except as provided in subparagraph (B) of this subdivision, for procurement and tariff years commencing on and after January 1, 2025, the total megawatts available to customers eligible under subparagraph (A) of subdivision (2) of subsection (a) of this section shall not exceed one hundred megawatts per year and the total megawatts available to customers eligible under subparagraph (B) of subdivision (2) of subsection (a) of this section shall not exceed fifty megawatts per year. The authority shall monitor the competitiveness of any procurements authorized pursuant to subsection (a) of this section and may adjust the annual purchase amount established in this subsection or other procurement parameters to maintain competitiveness. Any megawatts not allocated in any given year shall roll into the next year's available megawatts. The obligation to purchase energy and renewable energy certificates shall be apportioned as determined by the authority.

(B) For procurement and tariff years commencing on and after January 1, 2025, the authority may exceed the limits on total available megawatts described in subparagraph (A) of this subdivision for any procurement and tariff program authorized pursuant to subsection (a) of this section in any such year, if, during the period commencing on January first and ending on the date that the last project is selected pursuant to the usual procurement process for such program, as determined by the authority, the aggregate dollar amount of procurements of energy and renewable energy credits over the tariff term for all selected projects does not exceed the aggregate dollar amount of procurements of energy and renewable energy credits over the tariff term for all projects selected in such program during the calendar year 2024. The authority shall determine the manner of exceeding such limits.

(C) (i) The electric distribution companies shall continue to offer any tariffs developed pursuant to subparagraph (B) of subdivision (1) of subsection (a) of this section for six years, inclusive of previous years of such procurement and tariff program. The sixth and final year of such procurement and tariff program shall be the calendar year 2027.

(ii) The electric distribution companies shall continue to offer any tariffs developed pursuant to subparagraph (C) of subdivision (1) of subsection (a) of this section for eight years, inclusive of previous years of such procurement and tariff program. The eighth and final year of such procurement and tariff program shall be the calendar year 2027.

(D) The electric distribution companies shall offer any tariffs developed pursuant to subsection (b) of this section for six years. At the end of the tariff term pursuant to subparagraph (B) of subdivision (2) of subsection (b) of this section, residential customers that elected the option pursuant to said subparagraph shall be credited all cents-per-kilowatt-hour charges pursuant to the tariff rate for such customer for energy produced by the Class I renewable energy source against any energy that is consumed in real time by such residential customer.

(E) The authority shall establish tariffs for the purchase of energy on a cents-per-kilowatt-hour basis at the expiration of any tariff terms authorized pursuant to this section.

(2) The department, in consultation with the authority, shall assess the tariff offerings pursuant to this section and determine if such offerings are competitive compared to the cost of the technologies and shall report, in accordance with section 11-4a, the results of such determination to the General Assembly not later than January 15, 2027.

(3) For any tariff established pursuant to this section, the authority shall examine how to incorporate the following energy system benefits into the rate established for any such tariff: (A) Energy storage systems that provide electric distribution benefits, (B) location of a facility on the distribution system, (C) time-of-use rates or other dynamic pricing, and (D) other energy policy benefits identified in the Comprehensive Energy Strategy prepared pursuant to section 16a-3d.

(d) In accordance with subsection (g) of section 16-245a, the authority shall follow the procedures established pursuant to subsection (g) of section 16-245a, for certificates issued by the New England Power Pool Generation Information System for any Class I renewable energy source purchased by an electric distribution company pursuant to this section.

(e) The costs prudently and reasonably incurred by an electric distribution company pursuant to this section shall be recovered on a timely basis through a nonbypassable fully reconciling component of electric rates for all customers of the electric distribution company. Any net revenues from the sale of products purchased in accordance with any tariff offered pursuant to this section shall be credited to customers through the same fully reconciling rate component for all customers of such electric distribution company.

(f) Notwithstanding the size-to-load provisions of subdivision (4) of subsection (a) of this section, the entire rooftop space of a customer's own premises developed pursuant to subparagraph (B) of subdivision (1) of subsection (a) of this section and owned by a commercial or industrial customer may be used for purposes of electricity generation and participation in the solicitation conducted by each electric distribution company pursuant to subdivision (4) of subsection (a) of this section.

(g) State, municipal and agricultural customers shall be exempt from the requirement that generation projects owned or developed pursuant to subparagraph (A) of subdivision (2) of subsection (a) of this section be located on a customer's own premises.

(h) Notwithstanding any provision of this section, the authority shall incorporate the program established pursuant to section 16-244ee into the programs authorized pursuant to this section.

(P.A. 18-50, S. 7; P.A. 19-35, S. 3; P.A. 21-48, S. 2; P.A. 22-14, S. 1-4; P.A. 23-102, S. 25; P.A. 24-31, S. 6; 24-151, S. 174; P.A. 25-173, S. 9.)

History: P.A. 18-50 effective May 24, 2018; P.A. 19-35 amended Subsec. (a) by adding clause (iv) re period of time greater than one day up to and including one month and adding provision re authority to consider findings of the study of the value of distributed energy resources in Subdiv. (1)(B) and replacing “July 1, 2020” with “July 1, 2022” in Subdiv. (2), amended Subsec. (b) by replacing “September 1, 2019” with “July 1, 2020” adding clause (iv) re period of time greater than one day up to and including one month and adding provisions re authority to consider findings of the study of the value of distributed energy resources and issuance of final decision in Subdiv. (1), and replacing provision re expiration of residential solar investment program with “On and after January 1, 2022”, in Subdiv. (2), effective June 28, 2019; P.A. 21-48 amended Subsec. (b)(2) by adding provision re sizing of generation projects for qualifying multifamily dwelling, redefining “residential customer” and adding provision re initiation of uncontested proceeding to implement distribution of benefits from generation project pursuant to this section, effective June 16, 2021; P.A. 22-14 amended Subsec. (a)(2) by increasing the allowed size of projects on customer's own premises from less than 2 to less than 5 megawatts in Subparas. (A) and (B), deleting in Subpara. (C) “as defined in section 16-244x, and subscriptions, as defined in such section, associated with such facility,” and defining “shared clean energy facility”, amended Subsec. (a)(6)(E) by increasing the capacity designated for low-income customers from at least 10 per cent to at least 20 per cent and increasing the capacity designated for low-income customers, moderate-income customers, or low-income service organizations from at least 10 per cent to at least 60 per cent, amended Subsec (a)(7) by redefining “low-income customer” in Subpara. (B) and redefining “moderate-income customer” in Subpara. (D), amended Subsec. (c)(1)(A) by increasing the aggregate total megawatts to 160 megawatts per year, increasing the total for customers under Sec. 16-244z(a)(2)(B) to 100 megawatts per year, increasing the total for customers under Sec. 16-244z(a)(2)(C) to 50 megawatts per year and deleting “not” before “roll”, and added new Subsec. (f) re rooftop spaces of a customer's own premises; P.A. 23-102 substantially revised Subsec. (a) re project solicitations, project sizing based on electric meters' load, tariffs used and shared clean energy facilities and redefined “moderate-income customer” therein, amended Subsec. (b)(2) by adding provision re tariff terms and conditions and adding “pursuant to any rules established by the authority and”, amended Subsec. (c)(1) by replacing “in each of the years two through six of such a tariff” with “on and after January 1, 2023” and deleting provision re apportioning obligation to purchase energy and certificates based on companies' loads, amended Subsec. (c)(2) by extending report deadline to January 15, 2027, amended Subsec. (e) by adding “prudently and reasonably” re costs incurred, and added Subsec. (g) re exemption for state, municipal and agricultural customers, and made technical and conforming changes; P.A. 24-31 amended Subsec. (c)(1) by deleting provision re aggregate total megawatts and adding reference to procurement and tariff years commencing on and after January 1, 2025, in Subpara. (A), adding new Subpara. (B) re exceeding limits on total available megawatts and new Subpara. (C) re years of procurement and tariff programs, redesignating existing Subparas. (B) and (C) as Subparas. (D) and (E), and made a technical change, effective July 1, 2024; P.A. 24-151 added Subsec. (h) re authority to incorporate program established pursuant to Sec. 16-244ee into authorized programs, effective July 1, 2024; P.A. 25-173 deleted former Subsec. (a)(2)(A), redesignated former Subsec. (a)(2)(B) and (C) as Subsec. (a)(2)(A) and (B) and redefined “shared clean energy facility” in redesignated Subsec. (a)(2)(A) to include only Class I renewable energy sources that emit no pollutants, amended Subsec. (b)(1) to require authority establish netting tariff offering at rate equal to at least 3 1/4 cents, amended Subsec. (b)(2) to add “that emits no pollutants and”, amended Subsec. (c)(1)(A) to delete provision re annual 10 megawatt cap, amended Subsec. (d) to require authority follow procedures pursuant to Sec. 16-245a(g) re disposition of renewable energy certificates, and made conforming changes throughout.

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Sec. 16-244bb. Sustainable materials management account. (a) There is established an account to be known as the “sustainable materials management account”, which shall be a separate, nonlapsing account. The account shall contain moneys collected by the alternative compliance payment for Class II renewable portfolio standards pursuant to subsection (h) of section 16-244c and subsection (k) of section 16-245 and moneys deposited pursuant to subsection (f) of section 22a-232. The Commissioner of Energy and Environmental Protection shall expend moneys from the account for the purposes of the program established under this section, provided the commissioner may also pledge such moneys for revenue bonds the proceeds of which shall be used to support waste infrastructure projects described in this section.

(b) On and after January 1, 2023, the Commissioner of Energy and Environmental Protection shall establish and administer a sustainable materials management program to support solid waste reduction in the state through the provision of funding from the sustainable materials management account for purposes, including, but not limited to, grants, revolving loans, technical assistance, consulting services and waste characterization studies, to support programs and projects implemented by entities, including, but not limited to, municipalities, nonprofits and regional waste authorities. Funding from such program may be used to support the development of infrastructure necessary for the management of solid waste materials at upgraded, expanded or proposed facilities selected pursuant to section 22a-268h. Such programs and projects shall promote affordable, sustainable and self-sufficient management of waste within the state by reducing solid waste generation or diverting solid waste from disposal, consistent with the state-wide solid waste management plan established pursuant to section 22a-228.

(c) Not later than January 1, 2024, and annually thereafter, the Department of Energy and Environmental Protection shall submit a report, in accordance with the provisions of section 11-4a, to the joint standing committees of the General Assembly having cognizance of matters relating to the environment and energy and technology detailing the expenditures of any funds disbursed from the sustainable materials management account established in subsection (a) of this section and the outcomes associated with such expenditures.

(P.A. 22-118, S. 167; P.A. 23-170, S. 16; P.A. 25-110, S. 52.)

History: P.A. 23-170 amended Subsec. (a) to add reference to moneys deposited pursuant to Subsec. (f) of Sec. 22a-232 and to add reference to pledging of moneys for revenue bonds and amended Subsec. (b) to add reference to the use of funding from such program for solid waste management infrastructure, effective June 29, 2023; P.A. 25-110 amended Subsec. (a) to delete reference to General Fund and make technical changes, effective July 1, 2025.

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Sec. 16-244dd. Implementation of programs by the Department of Energy and Environmental Protection, the Connecticut Green Bank, electric distribution companies, or a third party. Selection by authority. (a) Notwithstanding the provisions of this title and title 16a, the Public Utilities Regulatory Authority may select the Connecticut Green Bank, the Department of Energy and Environmental Protection, the electric distribution companies, as defined in section 16-1, a third party that the authority deems appropriate or any combination thereof to implement the non-residential renewable energy program established pursuant to section 16-244z, the residential renewable energy program established pursuant to said section, the shared clean energy facility program established pursuant to said section, the light-duty electric vehicle charging program established by the authority in a proceeding or a medium-duty to heavy-duty electric vehicle charging program established by the authority in a proceeding.

(b) On and after January 1, 2026, the authority shall limit the expenses for electric vehicle charging stations, as defined in section 16-19f, and customer wiring upgrades of any light-duty electric vehicle charging program established by the authority in a proceeding to twenty million dollars per year and further limit any expenses for electric vehicle charging stations and customer wiring upgrades incentivized as part of any residential single-family customer program to residents who make less than or equal to three hundred per cent of the federal poverty level or reside in any concentrated poverty census tract, as defined in section 32-7x.

(P.A. 24-38, S. 8; P.A. 25-173, S. 3.)

History: P.A. 24-38 effective July 1, 2024; P.A. 25-173 designated existing provisions as Subsec. (a) and added Subsec. (b) re authority to limit expenses of certain electric vehicle charging programs established by the authority.

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Sec. 16-244ff. Selection of entities to implement certain clean energy or renewable energy programs. Notwithstanding any provision of this title, the Public Utilities Regulatory Authority may select the Connecticut Green Bank, the Department of Energy and Environmental Protection, the electric distribution companies, as defined in section 16-1, a third party that the authority deems appropriate or any combination thereof to implement any ratepayer-funded clean energy or renewable energy program established by the authority in a proceeding. Any such selection shall be based upon the authority's analysis of record evidence in an uncontested proceeding of an entity's qualifications and experience administering the same or comparable programs, projected cost savings, potential administrative efficiencies and impact on customer experience associated with each such entity's implementation of such programs.

(P.A. 25-173, S. 17.)

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Sec. 16-244gg. Requirement for participation in the regional independent system operator. (a) For the purposes of this section, “electric distribution company” and “regional independent system operator” have the same meanings as provided in section 16-1.

(b) On and after July 1, 2025, no electric distribution company shall own or control transmission facilities, as defined in subdivision (1) or (4) of subsection (a) of section 16-50i and located in the state unless such company participates in the regional independent system operator.

(P.A. 25-173, S. 28.)

History: P.A. 25-173 effective July 1, 2025.

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Sec. 16-244hh. Recording of votes at the regional independent system operator. (a) As used in this section:

(1) “Meeting” means any committee, user group, task force or other part of the regional transmission organization in which votes are taken;

(2) “Recorded vote” means a vote that is tabulated, either individually or as part of a sector, for any purpose at a meeting, regardless of (A) whether the vote represents a final position of any person casting the vote, or (B) the decision–making authority of those voting; and

(3) “Electric distribution company” and “regional independent system operator” have the same meanings as provided in section 16-1.

(b) (1) On or before February first annually, each electric distribution company shall submit to the Public Utilities Regulatory Authority a report on each recorded vote cast by the electric distribution company or, subject to subdivision (2) of this subsection, a corporate affiliate of the electric distribution company located in the state at a meeting of the regional independent system operator during the preceding calendar year.

(2) The report shall include (A) all recorded votes cast by the electric distribution company, regardless of whether the vote is otherwise disclosed, (B) all recorded votes cast by a corporate affiliate of the electric distribution company if such company itself did not vote on the matter, and (C) a brief description explaining how each vote cast by the electric distribution company or its corporate affiliate is in the interest of the public, as determined by the electric distribution company.

(P.A. 25-173, S. 29.)

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Sec. 16-245a. Renewable portfolio standards. (a) Subject to any modifications required by the Public Utilities Regulatory Authority for retiring renewable energy certificates on behalf of all electric ratepayers pursuant to subsection (h) of this section, sections 16a-3f to 16a-3j, inclusive, and sections 16a-3m, 16a-3n and 16a-3p, an electric supplier and an electric distribution company providing standard service or supplier of last resort service, pursuant to section 16-244c, shall demonstrate:

(1) On and after January 1, 2006, that not less than two per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(2) On and after January 1, 2007, not less than three and one-half per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(3) On and after January 1, 2008, not less than five per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(4) On and after January 1, 2009, not less than six per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(5) On and after January 1, 2010, not less than seven per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(6) On and after January 1, 2011, not less than eight per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(7) On and after January 1, 2012, not less than nine per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(8) On and after January 1, 2013, not less than ten per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(9) On and after January 1, 2014, not less than eleven per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(10) On and after January 1, 2015, not less than twelve and one-half per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(11) On and after January 1, 2016, not less than fourteen per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(12) On and after January 1, 2017, not less than fifteen and one-half per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(13) On and after January 1, 2018, not less than seventeen per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional four per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(14) On and after January 1, 2019, not less than nineteen and one-half per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional four per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(15) On and after January 1, 2020, not less than twenty-one per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional four per cent of the total output or services shall be from Class I or Class II renewable energy sources, except that for any electric supplier that has entered into or renewed a retail electric supply contract on or before May 24, 2018, on and after January 1, 2020, not less than twenty per cent of the total output or services of any such electric supplier shall be generated from Class I renewable energy sources;

(16) On and after January 1, 2021, not less than twenty-two and one-half per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional four per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(17) On and after January 1, 2022, not less than twenty-four per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional four per cent of the total output or services shall be from Class I or Class II renewable energy sources;

(18) On and after January 1, 2023, not less than twenty-six per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional four per cent of the total output or services shall be from Class II renewable energy sources;

(19) On and after January 1, 2024, not less than twenty-eight per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional four per cent of the total output or services shall be from Class II renewable energy sources;

(20) On and after January 1, 2025, not less than thirty per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional four per cent of the total output or services shall be from Class II renewable energy sources;

(21) On and after January 1, 2026, not less than twenty-five per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional four per cent of the total output or services shall be from Class II renewable energy sources;

(22) On and after January 1, 2027, not less than twenty-six per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional four per cent of the total output or services shall be from Class II renewable energy sources;

(23) On and after January 1, 2028, not less than twenty-seven per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional four per cent of the total output or services shall be from Class II renewable energy sources;

(24) On and after January 1, 2029, not less than twenty-eight per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional four per cent of the total output or services shall be from Class II renewable energy sources;

(25) On and after January 1, 2030, not less than twenty-nine per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional four per cent of the total output or services shall be from Class II renewable energy sources.

(b) (1) An electric supplier or electric distribution company may satisfy the requirements of this section (A) by purchasing certificates issued by the New England Power Pool Generation Information System, provided the certificates are for (i) energy produced by a generating unit using Class I or Class II renewable energy sources and the generating unit is located in the jurisdiction of the regional independent system operator, or (ii) energy imported into the control area of the regional independent system operator pursuant to New England Power Pool Generation Information System Rule 2.7(c), as in effect on January 1, 2006; (B) for those renewable energy certificates under contract to serve end use customers in the state on or before October 1, 2006, by participating in a renewable energy trading program within said jurisdictions as approved by the Public Utilities Regulatory Authority; or (C) by purchasing eligible renewable electricity and associated attributes from residential customers who are net producers. (2) Not more than two and one-half per cent of the total output or services of an electric supplier or electric distribution company shall be generated from Class I renewable energy sources eligible as described in subparagraph (A)(x)(II) of subdivision (20) of subsection (a) of section 16-1.

(c) Any supplier who provides electric generation services solely from a Class II renewable energy source shall not be required to comply with the provisions of this section.

(d) An electric supplier or an electric distribution company shall base its demonstration of generation sources, as required under subsection (a) of this section on historical data, which may consist of data filed with the regional independent system operator.

(e) The authority shall adopt regulations, in accordance with the provisions of chapter 54, to implement the provisions of this section.

(f) Notwithstanding the provisions of this section and section 16-244c, for periods beginning on and after January 1, 2008, each electric distribution company may procure renewable energy certificates from Class I, Class II and Class III renewable energy sources through long-term contracting mechanisms. The electric distribution companies may enter into long-term contracts for not more than fifteen years to procure such renewable energy certificates. The electric distribution companies shall use any renewable energy certificates obtained pursuant to this section to meet their standard service and supplier of last resort renewable portfolio standard requirements.

(g) The authority, in consultation with the Commissioner of Energy and Environmental Protection and the Office of Consumer Counsel, shall initiate a proceeding to establish procedures for the disposition of renewable energy certificates purchased pursuant to section 16-244z, sections 16a-3f to 16a-3j, inclusive, and sections 16a-3m, 16a-3n and 16a-3p which may include procedures for selling renewable energy certificates or to retire such certificates on behalf of all ratepayers and reduce the percentage of the total output or services of an electric supplier or an electric distribution company generated from Class I renewable energy sources required pursuant to subsection (a) of this section. Any such reduction shall be based on the energy production that the authority forecasts will be procured. The authority shall determine any such reduction of an annual renewable portfolio standard not later than one year prior to the effective date of such annual renewable portfolio standard. An electric distribution company shall not be responsible for any administrative or other costs or expenses associated with any difference between the number of renewable energy certificates planned to be retired pursuant to the authority's reduction and the actual number of renewable energy certificates retired.

(P.A. 98-28, S. 25, 117; P.A. 03-135, S. 7; June Sp. Sess. P.A. 05-1, S. 34; P.A. 06-74, S. 3; P.A. 07-242, S. 40, 71; P.A. 11-80, S. 1; P.A. 13-303, S. 5; P.A. 14-134, S. 13; P.A. 17-144, S. 3; 17-186, S. 1; P.A. 18-50, S. 1, 2, 28; P.A. 19-71, S. 4; P.A. 22-118, S. 163; P.A. 23-204, S. 186; P.A. 25-173, S. 37.)

History: P.A. 98-28 effective July 1, 1998; P.A. 03-135 amended Subsec. (a) to delete provisions applicable before July 1, 2003, designate remaining provisions as Subdiv. (1), add provisions re applicability of section to electric suppliers and electric distribution companies providing transitional standard offer, standard service, and supplier of last resort service, adjust the percentage of Class I and Class II renewable energy source requirements and the dates for meeting such requirements, delete provision re participation in a renewable energy trading program approved by the state, reposition provision re generation solely from Class II renewable energy source as new Subdiv. (3) and add new Subdiv. (2) re qualifying jurisdictions, amended Subsec. (b) to add a reference to an electric supplier and an electric distribution company and to make conforming changes, added new Subsec. (c) re make up of any deficiency and credit for the current year where credit was received in a preceding year, redesignated former Subsec. (c) as Subsec. (d) and amended said Subsec. to change “may” to “shall” and to make technical changes, effective January 1, 2004; June Sp. Sess. P.A. 05-1 amended Subsec. (a)(2) to add “on and after January 1, 2010”, effective July 1, 2006; P.A. 06-74 amended Subsec. (a) to make technical changes, redesignated existing Subsec. (a)(2) as new Subsec. (b), amended Subsec. (b) to replace language re certain qualifying jurisdictions with language in Subdiv. (1) re certificates issued by the New England Power Pool Generation Information System and in Subdiv. (2) re renewable energy certificates under contract on or before October 1, 2006, and to make technical changes, redesignated existing Subsec. (a)(3) as new Subsec. (c), and redesignated existing Subsecs. (b) to (d), inclusive, as new Subsecs. (d) to (f), inclusive; P.A. 07-242 amended Subsec. (a) to add Subdiv. designators (1) to (5) for existing renewable energy portfolio standard requirements through on and after January 1, 2010, and add Subdivs. (6) to (15) re standards through on and after January 1, 2020, and added Subsec. (b)(3) re purchasing renewable energy from residential net producers, and, effective June 4, 2007, added Subsec. (g) re long-term contracts; 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; P.A. 13-303 added Subsec. (h) re schedule for assigning gradually reduced renewable energy credit value to certain biomass and landfill methane gas facilities, effective June 5, 2013; P.A. 14-134 amended Subsec. (g) by deleting Subdiv. (1) designator and deleting former Subdiv. (2) re initiation of contested case proceeding to examine use of long-term contracts to procure certificates, effective June 6, 2014; P.A. 17-144 amended Subsec. (a) by replacing “four” with “three” re per cent of total output or services in Subdivs. (13), (14) and (15), effective June 27, 2017; P.A. 17-186 deleted former Subsec. (e) re supplier or electric distribution company making up deficiency within renewable energy portfolio, and redesignating existing Subsecs. (f) to (h) as Subsecs. (e) to (g), effective July 1, 2017; P.A. 18-50 amended Subsec. (a) by adding provision re demonstration subject to modifications required by authority for retiring renewable energy certificates, replacing “twenty per cent” with “twenty-one per cent” and adding exception in Subdiv. (15) re electric suppliers that entered into or renewed retail electric supply contracts on or before May 24, 2018, and adding Subdivs. (16) to (25) re standards each year on and after January 1, 2021, to on and after January 1, 2030, respectively, effective May 24, 2018, amended Subsec. (b) by designating existing provision re electric supplier or electric distribution company satisfying requirements of section as new Subdiv. (1), and amending same by redesignating existing Subdivs. (1) and (2) as new Subparas. (A) and (B), redesignating existing Subparas. (A) and (B) as clauses (i) and (ii), redesignating existing Subdiv. (3) as Subpara. (C), and adding new Subdiv. (2) re not more than 1 per cent of total output or services to be generated from Class I renewable energy sources, effective October 1, 2018, and added Subsec. (h) re establishment of procedures for disposition of renewable energy certificates, effective May 24, 2018; P.A. 19-71 amended Subsec. (a) by adding reference to Sec. 16a-3n and making conforming changes, effective June 7, 2019; P.A. 22-118 amended Subsec. (a) by deleting “Class I or” in provisions re additional 4 per cent output or services from renewable energy sources in Subdivs. (18) to (25); P.A. 23-204 amended Subsec. (b)(1) by increasing percentage re total output from certain Class I renewable energy sources from 1 per cent to 2.5 per cent; P.A. 25-173 amended Subsec. (a) to include reference to Sec. 16a-3p, amended Subsec. (a)(21) to (25) to reduce percentage of energy from Class I renewable energy sources for years 2026 to 2030 from 32, 34, 36, and 40 to 26, 27, 28 and 29 per cent, respectively, deleted Subsec. (g) re establishing schedule to assign renewable energy credit value, redesignated existing Subsec. (h) as Subsec. (g) and amended same to require authority consult with Commissioner of Energy and Environmental Protection and Office of Consumer Counsel and initiate proceeding to establish procedures for disposition of certain renewable energy certificates, to replace provision re selling certificates consistent with Sec. 16-244z or reductions with provision re sell or retire such certificates and remove reference to Sec. 16-244z.

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Sec. 16-245e. Stranded costs of electric distribution companies. Rate reduction bonds. Definitions. Calculation by authority. Procedures. Adjustments. Mitigation. (a) As used in this section, sections 16-245f to 16-245k, inclusive, and section 16-245m:

(1) “Rate reduction bonds” means bonds, notes, certificates of participation or beneficial interest, or other evidence of indebtedness or ownership, issued pursuant to an executed indenture or other agreement of a financing entity, in accordance with this section and sections 16-245f to 16-245k, inclusive, the proceeds of which are used, directly or indirectly, to provide, recover, finance, or refinance stranded costs, financed utility services or economic recovery transfer, or to sustain funding of conservation and load management and renewable energy investment programs by substituting for disbursements to the General Fund from the Conservation and Load Management Plan established by section 16-245m and from the Clean Energy Fund established by section 16-245n, and which, directly or indirectly, are secured by, evidence ownership interests in, or are payable from, transition property;

(2) “Competitive transition assessment” means those nonbypassable rates and other charges, that are authorized by the authority (A) in a financing order in respect to the economic recovery transfer, or in a financing order, to sustain funding of conservation and load management and renewable energy investment programs by substituting disbursements to the General Fund from proceeds of rate reduction bonds for such disbursements from the Conservation and Load Management Plan established by section 16-245m, and from the Clean Energy Fund established by section 16-245n, or to recover those stranded costs or financed utility services that are eligible to be funded with the proceeds of rate reduction bonds pursuant to section 16-245f, and the costs of providing, recovering, financing, or refinancing the economic recovery transfer or such substitution of disbursements to the General Fund or such stranded costs or financed utility services through a plan approved by the authority in the financing order, including the costs of issuing, servicing, and retiring rate reduction bonds, (B) to recover those stranded costs or financed utility services determined under this section but not eligible to be funded with the proceeds of rate reduction bonds pursuant to section 16-245f, or (C) to recover costs determined under subdivision (1) of subsection (e) of section 16-244g. If requested by the electric distribution company, the authority shall include in the competitive transition assessment nonbypassable rates and other charges to recover federal and state taxes whose recovery period is modified by the transactions contemplated in this section and sections 16-245f to 16-245k, inclusive;

(3) “Customer” means any individual, business, firm, corporation, association, tax-exempt organization, joint stock association, trust, partnership, limited liability company, the United States or its agencies, this state, any political subdivision thereof or state agency that purchases electric generation or distribution services as a retail end user in the state from any electric supplier or electric distribution company;

(4) “Finance authority” means the state, acting through the office of the State Treasurer;

(5) “Authority” means the Public Utilities Regulatory Authority;

(6) “Net proceeds” means the book income from the sale or divestiture of assets, consisting of sales price less reasonable expenses of sale, related income and other;

(7) “Stranded costs” means that portion of generation assets, generation-related regulatory assets or long-term contract costs determined by the authority in accordance with the provisions of subsections (e), (f), (g) and (h) of this section;

(8) “Generation assets” means the total construction and other capital asset costs of generation facilities approved for inclusion in rates before July 1, 1997, but does not include any costs relating to the decommissioning of any such facility or any costs which the authority found during a proceeding initiated before July 1, 1998, were incurred because of imprudent management;

(9) “Generation-related regulatory assets” means generation-related costs authorized or mandated before July 1, 1998, by the Public Utilities Regulatory Authority, approved for inclusion in the rates, and include, but are not limited to, costs incurred for deferred taxes, conservation programs, environmental protection programs, public policy costs and research and development costs, net of any applicable credits payable to customers, but does not include any costs which the authority found during a proceeding initiated before July 1, 1998, were incurred because of imprudent management;

(10) “Long-term contract costs” mean the above-market portion of the costs of contractual obligations approved for inclusion in the rates that were entered into before January 1, 2000, arising from independent power producer contracts required by law or purchased power contracts approved by the Federal Energy Regulatory Commission;

(11) “Financing entity” means the finance authority or any special purpose trust or other entity that is authorized by the finance authority, or, in the case of rate reduction bonds to recover financed utility services, authorized by the Public Utilities Regulatory Authority pursuant to a financing order, to issue rate reduction bonds or acquire transition property pursuant to such terms and conditions as the finance authority, or said authority, if applicable, may specify, or both;

(12) “Financing order” means an order of the authority adopted in accordance with this section and sections 16-245f to 16-245k, inclusive;

(13) “Transition property” means the irrevocable property right created pursuant to this section and sections 16-245f to 16-245k, inclusive, in respect to the economic recovery transfer or in respect of disbursements to the General Fund to sustain funding of conservation and load management and renewable energy investment programs or those stranded costs or financed utility services that are eligible to be funded with the proceeds of rate reduction bonds pursuant to section 16-245f, including, without limitation, the right, title, and interest of an electric distribution company or its transferee or the financing entity (A) in and to the rates and charges established pursuant to a financing order, as adjusted from time to time in accordance with subdivision (2) of subsection (b) of section 16-245i, and the financing order, (B) to be paid the amount that is determined in a financing order to be the amount that the electric distribution company or its transferee or the financing entity is lawfully entitled to receive pursuant to the provisions of this section and sections 16-245f to 16-245k, inclusive, and the proceeds thereof, and in and to all revenues, collections, claims, payments, money, or proceeds of or arising from the rates and charges or constituting the competitive transition assessment that is the subject of a financing order including those nonbypassable rates and other charges referred to in subdivision (2) of this subsection, and (C) in and to all rights to obtain adjustments to the rates and charges pursuant to the terms of subdivision (2) of subsection (b) of section 16-245i, and the financing order. “Transition property” shall constitute a current and irrevocable property right notwithstanding the fact that the value of the property right will depend on consumers using electricity or, in those instances where consumers are customers of a particular electric distribution company, the electric distribution company performing certain services;

(14) “State rate reduction bonds” means the rate reduction bonds issued on June 23, 2004, by the state to sustain funding of conservation and load management and renewable energy investment programs by substituting for disbursements to the General Fund from the Conservation and Load Management Plan, established by section 16-245m, and from the Clean Energy Fund, established by section 16-245n. The state rate reduction bonds for the purposes of section 4-30a shall be deemed to be outstanding indebtedness of the state;

(15) “Operating expenses” means, with respect to state rate reduction bonds or economic recovery revenue bonds, (A) all expenses, costs and liabilities of the state or the trustee incurred in connection with the administration or payment of the state rate reduction bonds or economic recovery revenue bonds, or in discharge of its obligations and duties under the state rate reduction bonds or economic recovery revenue bonds, or bond documents, expenses and other costs and expenses arising in connection with the state rate reduction bonds or economic recovery revenue bonds, or pursuant to the financing order providing for the issuance of such bonds including any arbitrage rebate and penalties payable under the code in connection with such bonds, and (B) all fees and expenses payable or disbursable to the servicers or others under the bond documents;

(16) “Bond documents” means, with respect to state rate reduction bonds or economic recovery revenue bonds, the following documents: The servicing agreements, the tax compliance agreement and certificate, and the continuing disclosure agreement and indenture entered into in connection with the state rate reduction bonds or the economic recovery revenue bonds;

(17) “Indenture” means the indenture executed in connection with the state rate reduction bonds or the economic recovery revenue bonds, or, with respect to state rate reduction bonds, the RRB Indenture, dated as of June 23, 2004, by and between the state and the trustee, as amended from time to time;

(18) “Trustee” means, with respect to state rate reduction bonds, the trustee appointed under the indenture;

(19) “Economic recovery transfer” means the disbursement to the General Fund of nine hundred fifty-six million dollars from proceeds of the issuance of the economic recovery revenue bonds;

(20) “Economic recovery revenue bonds” means rate reduction bonds issued to fund the economic recovery transfer, the costs of issuance, credit enhancements, operating expenses and such other costs as the finance authority deems necessary or advisable, and which shall be payable from competitive transition assessment charges that replace the competitive transition assessment charges funding stranded costs;

(21) “Financed utility services” means costs determined by the Public Utilities Regulatory Authority consistent with the principles set forth in sections 16-11, 16-19 and 16-19e that (A) have been prudently and efficiently incurred between the period of January 1, 2018, to January 1, 2025, by an electric distribution company to prepare for and restore power to customers following storms, (B) have been or are reasonably expected to be prudently and efficiently incurred after January 1, 2025, by an electric distribution company for any accelerated initial procurement, installation and operational deployment of advanced metering infrastructure, including capital expenses and one-time non-capital operating expenses to implement and promote customer adoption of advanced metering infrastructure, including information and education for customers or licenses, fees, training and other necessary costs, to replace existing traditional noninterval metering infrastructure utilized by customers of such company, including any reasonable fees, expenses and transaction costs incurred in connection with the issuance, servicing, retirement or refinancing of rate reduction bonds, (C) the unrecovered balance of legacy infrastructure, including stranded costs, being replaced in connection with the deployment of advanced metering infrastructure, and (D) any reasonable fees, expenses and transaction costs incurred in connection with the issuance, servicing, retirement or refinancing of rate reduction bonds issued to finance such costs; and

(22) “Advanced metering infrastructure” means an integrated system of metering equipment, two-way communications networks and information management systems, including billing and customer information systems, used by an electric distribution company to collect and transmit interval or real-time data concerning a customer's energy consumption.

(b) The authority shall, in accordance with the provisions of this section, identify and calculate, upon application by an electric distribution company, those stranded costs or financed utility services that may be collected through the competitive transition assessment which shall be calculated and collected in accordance with the provisions of section 16-245g. No electric distribution company shall be eligible to claim stranded costs unless a public auction has been held to divest itself of all nonnuclear generation assets or the electric distribution company has sold its nonnuclear generation assets in accordance with section 16-43.

(c) (1) Notwithstanding subdivision (1) of subsection (e) of section 16-244g, any electric distribution company seeking to claim stranded costs shall, in accordance with this subsection, mitigate such costs to the fullest extent possible. Prior to the approval by the authority of any stranded costs, the electric distribution company shall show to the satisfaction of the authority that the electric distribution company has taken all reasonable steps to mitigate to the maximum extent possible the total amount of stranded costs that it seeks to claim and to minimize the cost to be recovered from customers. Mitigation shall include: (A) Except to the extent provided in collective bargaining agreements or agreements to purchase generation assets entered into prior to July 1, 1998, the obtaining of written commitments from purchasers of generation facilities divested pursuant to section 16-244g, that the purchasers will offer employment to persons who were employed in nonmanagerial positions by a divested generation facility at any time during the three-month period prior to the divestiture, at levels of wages and overall compensation not lower than the employees' lowest level during the six-month period prior to the date the contract to divest the asset was entered into; (B) good faith efforts to negotiate the buyout, buydown or renegotiation of independent power producer contracts and purchased power contracts approved by the Federal Energy Regulatory Commission, provided the fixed present value of any contract to which a political subdivision of the state is a party shall be calculated using the political subdivision's tax-exempt borrowing rate as the discount rate; and (C) the reasonable costs of the consultants appointed to conduct the auctions of generation assets pursuant to section 16-244g. Mitigation may include, but is not limited to, reallocation of depreciation reserves to existing generation assets to the extent consistent with generally accepted accounting principles; reduction of book assets by application of net proceeds of any sale of existing assets; maximization of market revenues from existing generation assets; efforts to maximize current and future operating efficiency, including appropriate and timely maintenance, trouble shooting, aggressive identification and correction of potential problem areas; voluntary write-offs of above-market generation assets; the decision to retire uneconomical generation assets and efforts to divest generating sites at market prices reflective of best use of sites. Mitigation shall not include any expenditures to restart a nuclear generation asset that was not operating for reasons other than scheduled maintenance or refueling at the time such expenditure was made. Any mitigation efforts and associated costs shall be subject to approval by the authority.

(2) The authority shall allow the cost of such mitigation efforts to be included in the calculation of stranded costs to the extent that such mitigation costs are reasonable relative to the amount of the reduction in stranded costs resulting from the mitigation.

(d) An electric distribution company shall submit to the authority an application for recovery of that portion of generation-related regulatory assets, long-term contract costs, generation assets and mitigation costs which are determined by the authority in accordance with subsections (c), (e), (f) and (g) of this section and subdivision (1) of subsection (e) of section 16-244g. The application shall include a description of mitigation efforts and a request for recovery through the competitive transition assessment and may include a request for a financing order. The authority shall hold a hearing for each electric distribution company and issue a finding of the calculation of stranded costs in a time frame that allows for collection of the competitive transition assessment to begin on January 1, 2000. Any hearing shall be conducted as a contested case in accordance with chapter 54.

(e) The authority shall calculate the stranded costs for generation-related regulatory assets to be their book value as of January 1, 2000. In calculating the value of generation-related regulatory assets that are being provided in a lump sum as the result of a funding with the proceeds of rate reduction bonds, the authority shall adjust the value of each such asset to reflect the time value of such lump sum, if any.

(f) (1) The authority shall calculate the stranded costs for long-term contract costs that have been reduced to a fixed present value through the buyout, buydown, or renegotiation of independent power producer contracts and purchased power contracts approved by the Federal Energy Regulatory Commission as such present value. In making such calculation, the authority shall net purchased power contracts approved by the Federal Energy Regulatory Commission that are below market value against any such contracts that are above-market value.

(2) The authority shall calculate the stranded costs for any portion of a long-term contract cost that has not been reduced to a fixed present value by comparing the contract price to the market price at least annually. In making such calculation, the authority shall net purchased power contracts approved by the Federal Energy Regulatory Commission that are below market value against any such contracts that are above-market value. The costs described in this subdivision shall be included in the competitive transition assessment pursuant to section 16-245g, but shall not be included in any funding with the proceeds of rate reduction bonds.

(g) The authority shall calculate the stranded cost for each generation asset to be the difference between its book value and the market value of a prudently and efficiently managed nonnuclear generating facility of comparable size, age and technical characteristics in a competitive market. In determining the market value of any such asset, the authority may consider (A) the dollars per kilowatt received from the sale of similar generation facilities, if any, (B) income capitalization based on the operating history and capacity of the facility, the market rates for power, and any existing long-term contracts for the sale of power or capacity, (C) independent market appraisals, or (D) other relevant factors. The authority shall calculate the stranded costs for generation assets at least every three years. The costs described in this subsection shall be included in the competitive transition assessment pursuant to section 16-245g, but shall not be included in any funding with the proceeds of rate reduction bonds.

(h) (1) On or before January 1, 2004, an electric distribution company may submit to the authority an application for recovery of that portion of nuclear generation assets which is determined by the authority in accordance with this subsection, which application shall include a request for recovery through the competitive transition assessment. The authority shall hold a hearing for each electric distribution company and issue a finding of the calculation of such nuclear generation assets in accordance with the provisions of this subsection. Any hearing shall be conducted as a contested case proceeding in accordance with chapter 54. The costs described in this subsection shall be included in the competitive transition assessment pursuant to section 16-245g, but shall not be included in any funding with proceeds of rate reduction bonds.

(2) The authority shall calculate the stranded costs for each nuclear generation asset that was divested at a price less than book value as described in subdivision (5) of subsection (c) of section 16-244g as the difference between the book value of this asset and the final bid price of the asset. The authority's calculation of stranded costs pursuant to this subdivision shall be final and shall not be subject to further adjustment by the authority.

(3) The authority shall calculate the stranded costs for each nondivested nuclear generation asset described in subdivision (1) of subsection (d) of section 16-244g to be the difference between its book value and the market value of a prudently and efficiently managed nuclear generating facility of comparable size, age and technical characteristics in a competitive market. In determining the market value of any such asset, the authority may consider (A) the dollars per kilowatt received from the sale of similar generation facilities, if any, (B) income capitalization based on the operating history and capacity of the facility, the market rates for power, and any existing long-term contracts for the sale of power or capacity, (C) the provision for decommissioning and related costs to be paid from the systems benefits charge provided in section 16-245l, (D) independent market appraisals, or (E) other relevant factors. At least every four years after the date when the authority issues an initial finding of the calculation of the stranded costs for such nondivested nuclear generation assets as provided in this subdivision until the earlier of (i) the expiration of the collection of the competitive transition assessment, or (ii) the date when such an asset is divested, the authority shall hold a hearing and issue a finding to adjust the stranded cost calculation of each such asset and to adjust the competitive transition assessment accordingly to true up the stranded cost recovery for the difference between the market value projected in such initial finding and the actual market value of a prudently and efficiently managed nuclear generating facility of comparable size, age and technical characteristics during the time period between the initial finding and the adjustment date, provided the second and subsequent adjustments shall reflect the difference during the time period since the most recent true-up. The authority shall calculate the value of each such asset in accordance with the methodology provided in this subdivision. Any hearing shall be conducted as a contested case in accordance with chapter 54.

(4) After the authority has calculated the total value of stranded costs for all nuclear generation assets, the authority shall (A) reduce such amount by the net proceeds that are above book value realized by an electric distribution company from the sale of nonnuclear generation assets, (B) reduce such valuation to reflect the total net proceeds that are above book value realized by an electric distribution company from the sale of any nuclear generation assets pursuant to subsection (c) of section 16-244g, and (C) reduce such amount by the net proceeds that are above book value received by an electric distribution company for the sale or lease of any real property after July 1, 1998.

(i) If any net proceeds described in subdivision (4) of subsection (h) of this section remain after the reduction in the calculation of nuclear generation assets pursuant to said subdivision (4) or are realized after said reduction is calculated, the additional amount of such net proceeds shall be netted against long-term contract costs described in subdivision (2) of subsection (f) of this section, and the competitive transition assessment shall be adjusted accordingly.

(j) No electric distribution company shall be eligible to claim any stranded costs for a nuclear generation asset or for any generation-related regulatory asset related to such generation asset, if the generation asset is not operating as a result of an order issued by the United States Nuclear Regulatory Commission that applies specifically to such asset. Any such asset that is not eligible to be claimed as a stranded cost shall be eligible after it is permitted to and has resumed operation and is selling power.

(k) If an electric distribution company elected to transfer any of its nuclear generation assets and related operations and functions to a separate corporate affiliate or to a division that is functionally separate from the electric distribution company pursuant to section 16-244g and subsequently sold any such assets in an arm's length transaction to an unrelated entity prior to January 1, 2012, the net proceeds realized from such sale that exceed book value for such assets shall be netted against the total amount of stranded costs, and the competitive transition assessment shall be adjusted accordingly and, if appropriate, other reimbursement shall be ordered by the authority.

(l) Upon receipt of a petition from an electric distribution company, or upon its own motion, the authority may determine, at its sole discretion, that the issuance of rate reduction bonds is in the best interest of ratepayers. Upon the issuance of a financing order by the authority that specifies the appropriate amount, timing and terms of such rate reduction bond issuance, the financing entity shall issue such rate reduction bonds in accordance with the financing order, provided the aggregate principal amount of such bonds shall not exceed two billion two hundred million dollars. Subject to the reconciliation process set forth in this subsection, the costs of any rate reduction bonds, including all principal, interest, premium, costs and arrearages on such bonds, shall be recovered through the competitive transition assessment pursuant to section 16-245g. Upon the issuance of any rate reduction bonds as ordered by the authority to recover any financed utility services, the authority shall periodically adjust the competitive transition assessment in accordance with section 16-245j, to allow the recovery of the cost of such bonds, including through a reconciliation of the actual revenues from the competitive transition assessment to the actual cost of such bonds. If the proceeds used to purchase transition property with respect to rate reduction bonds issued for the deployment of advanced metering infrastructure is subsequently determined by the authority pursuant to the standards set forth in sections 16-11, 16-19, or 16-19e to exceed the amount prudently and efficiently incurred for the deployment of advanced metering infrastructure, the total cost of such bonds resulting from the excess shall be returned to ratepayers, with interest, in a manner determined by the authority, including by decreasing another nonbypassable rate charged by such electric distribution company to proportionately account for such decrease, or through the revenue decoupling mechanism line item, provided the competitive transition assessment shall not be decreased in connection with such reconciliation.

(m) Notwithstanding any provision of the general statutes, the net benefits of accumulated deferred income taxes relating to amounts that will be recovered through the issuance of rate reduction bonds for financed utility services shall be credited to retail customers of electric distribution companies by reducing the amount of such rate reduction bonds that would otherwise be issued by the net present value of the related tax cash flows, using a discount rate equal to the expected interest rate on such rate reduction bonds.

(P.A. 98-28, S. 8, 117; June 30 Sp. Sess. P.A. 03-6, S. 44, 45; Sept. 8 Sp. Sess. P.A. 03-1, S. 2; P.A. 07-242, S. 79; June Sp. Sess. P.A. 07-1, S. 134; June Sp. Sess. P.A. 07-5, S. 56; P.A. 10-179, S. 125; P.A. 11-80, S. 1; P.A. 13-5, S. 11; P.A. 14-134, S. 84; P.A. 18-50, S. 16, 17; P.A. 25-173, S. 10.)

History: P.A. 98-28 effective July 1, 1998; June 30 Sp. Sess. P.A. 03-6 amended Subsec. (a)(1), (2) and (13) re the definitions of “rate reduction bonds”, “competitive transition assessment” and “transition property” for consistency with a plan to avoid disbursements from the Energy Conservation and Load Management and Renewable Energy Investment funds to the General Fund in the implementation of the budget for the biennium ending June 30, 2005, effective August 20, 2003; Sept. 8 Sp. Sess. P.A. 03-1 amended Subsec. (a)(13) re the definition of “transition property” to add references to the financing entity, effective September 10, 2003; P.A. 07-242 added Subsec. (a)(14) to (18) to define “state rate reduction bonds”, “operating expenses”, “bond documents”, “indenture”, and “trustee”, respectively, effective June 4, 2007; June Sp. Sess. P.A. 07-1 added Subsec. (l) re defeasance or purchase of state rate reduction bonds, effective June 26, 2007; June Sp. Sess. P.A. 07-5 reiterated addition of Subsec. (a)(14) to (18) defining “state rate reduction bonds”, “operating expenses”, “bond documents”, “indenture”, and “trustee”, respectively, effective October 6, 2007; P.A. 10-179 amended Subsec. (a) to add Subdivs. (19) and (20) defining “economic recovery transfer” and “economic recovery revenue bonds” and to add references to these terms in Subdivs. (1), (2), (13), (15), (16) and (17), effective May 7, 2010; 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, and “Renewable Energy Investment Fund” was changed editorially by the Revisors to “Clean Energy Fund”, effective July 1, 2011; P.A. 13-5 amended Subsec. (a)(20) to redefine “economic recovery revenue bonds” by deleting provision re Energy Conservation and Load Management Fund, effective May 8, 2013; P.A. 14-134 deleted references to electric company or replaced such references with references to electric distribution company throughout, amended Subsec. (a) by redefining “net proceeds” in Subdiv. (5), deleting former Subdiv. (10) re definition of “authority” and redesignating existing Subdivs. (11) to (20) as Subdivs. (10) to (19), amended Subsec. (j) by deleting Subdiv. (1) designator and deleting former Subdiv. (2) re asset with a Nuclear Regulatory Commission capacity rating of 641 megawatts, deleted former Subsec. (l) re funds used for defeasance or purchase of state rate reduction bonds, and made technical changes, effective June 6, 2014; P.A. 18-50 amended Subsecs. (a)(1), (2) and (13) by changing “Energy Conservation and Load Management Fund” to “Conservation and Load Management Plan”, effective January 1, 2020; P.A. 25-173 amended Subsec. (a) to redefine “rate reduction bonds” and “competitive transition assessment” in Subdivs. (1) and (2), add definition for “authority” in new Subdiv. (5), redesignate existing definitions in Subdivs. (5) to (19) as Subdivs. (6) to (20), redefine “financing entity” in redesignated Subdiv. (11) and “transition property” in redesignated Subdiv. (13) and add definitions for “financed utility services” and “advanced metering infrastructure” in Subdivs. (21) and (22), amended Subsec. (b) to add reference to financed utility services, added Subsec. (l) re process to issue rate reduction bonds, and added Subsec. (m) re credit of benefits from rate reduction bonds to electric ratepayers, effective July 1, 2025.

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Sec. 16-245f. Funding of certain disbursements to the General Fund. Funding of stranded costs and other utility services through rate reduction bonds. Funding of economic recovery transfer through economic recovery revenue bonds. Assessment. (a)(1) An electric distribution company shall submit to the authority an application for a financing order with respect to any proposal to sustain funding of conservation and load management and renewable energy investment programs by substituting disbursements to the General Fund from proceeds of rate reduction bonds for such disbursements from the Conservation and Load Management Plan established by section 16-245m and from the Clean Energy Fund established by section 16-245n, and may submit to the authority an application for a financing order with respect to the following stranded costs: (A) The cost of mitigation efforts, as calculated pursuant to subsection (c) of section 16-245e; (B) generation-related regulatory assets, as calculated pursuant to subsection (e) of section 16-245e; and (C) those long-term contract costs that have been reduced to a fixed present value through the buyout, buydown, or renegotiation of such contracts, as calculated pursuant to subsection (f) of section 16-245e. No stranded costs shall be funded with the proceeds of rate reduction bonds unless (i) the electric distribution company proves to the satisfaction of the authority that the savings attributable to such funding will be directly passed on to customers through lower rates, and (ii) the authority determines such funding will not result in giving the electric distribution company or any generation entities or affiliates an unfair competitive advantage.

(2) An electric distribution company may submit to the authority a petition for a financing order with respect to financed utility services that have been determined by the authority in a separate proceeding to be appropriate for cost recovery pursuant to the standards set forth in section 16-19 or 16-19e. The authority shall issue its response to such petition not more than one hundred twenty days after its receipt of a petition for a financing order pursuant to this subdivision.

(3) The authority shall hold a hearing for each such electric distribution company to determine the amount of disbursements to the General Fund from proceeds of rate reduction bonds that may be substituted for such disbursements from the Conservation and Load Management Plan established by section 16-245m, and from the Clean Energy Fund established by section 16-245n, and thereby constitute transition property and the portion of stranded costs or financed utility services that may be included in such funding and thereby constitute transition property. Any hearing shall be conducted as a contested case in accordance with chapter 54, except that any hearing with respect to a financing order or other order to sustain funding for conservation and load management and renewable energy investment programs by substituting the disbursement to the General Fund from the Conservation and Load Management Plan established by section 16-245m, and from the Clean Energy Investment Fund established by section 16-245n, shall not be a contested case, as defined in section 4-166. The authority shall not include any rate reduction bonds as debt of an electric distribution company in determining the capital structure of the company in a rate-making proceeding, for calculating the company's return on equity or in any manner that would impact the electric distribution company for rate-making purposes, and shall not approve such rate reduction bonds that include covenants that have provisions prohibiting any change to their appointment of an administrator of the Conservation and Load Management Plan.

(b) Prior to September 1, 2010, each electric distribution company shall submit to the authority an application for a financing order with respect to funding the economic recovery transfer through the issuance of economic recovery revenue bonds. The authority shall hold a hearing for each such electric distribution company to determine the amount necessary to fund the economic recovery transfer, the payment of economic recovery revenue bonds, costs of issuance, credit enhancements and operating expenses for the economic recovery revenue bonds. Such amount as determined by the authority shall constitute transition property. The authority shall allocate the responsibility for the funding of the economic recovery transfer and the expenses of the economic recovery revenue bonds equitably between the electric distribution companies. Such allocation may provide that the respective charges payable by the customers of each electric distribution company may commence on different dates and that such rates may vary over the period the economic recovery revenue bonds and the related operating expenses are being paid, provided (1) such charges are equitably allocated to the customers of each electric distribution company, and (2) the authority determines that, over such period, and taking into account the timing of charges, the charges on a kilowatt hour basis assessed to the customers of the respective electric distribution companies have substantially the same present value after consultation with the finance authority as to the discount rate to be used in determining such present value. Any hearing with respect to a financing order in respect to the economic recovery transfer and the issuance of economic recovery revenue bonds shall not be a contested case, as defined in section 4-166. The authority shall issue a financing order in respect to the economic recovery revenue bonds for each electric distribution company on or before October 1, 2010. In such financing order, the authority shall determine the competitive transition assessment in respect of the economic recovery revenue bonds, which shall not be assessed prior to June 30, 2011, unless the authority sets an earlier date in the financing order. The authority may provide in such financing order that money from other sources, including proceeds of charges assessed customers of municipal electric companies, transferred to the trustee under the indenture and intended to be used to pay debt service on the bonds shall be taken into account in making adjustments to the competitive transition assessment pursuant to subdivision (2) of subsection (b) of section 16-245i if such payment is not made from General Fund revenues and would not adversely affect the tax status or credit rating of economic recovery revenue bonds.

(c) The authority, during the period commencing on January 1, 2011, and ending June 30, 2011, shall assess or cause to be assessed a charge per kilowatt hour of electricity sold to each end use customer of an electric distribution company and shall cause such assessments to be remitted to the General Fund. The authority shall set such charge at a level which the authority estimates will generate forty million dollars during the period it is assessed. Such charge shall not be assessed after June 30, 2011.

(P.A. 98-28, S. 9, 117; June 30 Sp. Sess. P.A. 03-6, S. 46; Sept. 8 Sp. Sess. P.A. 03-1, S. 3; P.A. 04-180, S. 1; P.A. 10-179, S. 126; P.A. 11-80, S. 1; P.A. 13-5, S. 12; P.A. 14-134, S. 85; P.A. 18-50, S. 18; P.A. 25-173, S. 11.)

History: P.A. 98-28 effective July 1, 1998; June 30 Sp. Sess. P.A. 03-6 added provisions for a proposal to avoid disbursements from the Energy Conservation and Load Management and Renewable Energy Investment funds to the General Fund in the implementation of the budget for the biennium ending June 30, 2005, effective August 20, 2003; Sept. 8 Sp. Sess. P.A. 03-1 required the submission of an application for a financing order in the case of proposals to sustain certain funding of conservation and load management and renewable energy investment programs, effective September 10, 2003; P.A. 04-180 made technical changes and deleted reference to Sec. 20 of P.A. 03-2, effective June 1, 2004; P.A. 10-179 designated existing provisions as Subsec. (a) and added Subsec. (b) re economic recovery revenue bonds and Subsec. (c) re assessment, effective May 7, 2010; pursuant to P.A. 11-80, “department” and “Renewable Energy Investment Fund” were changed editorially by the Revisors to “authority” and “Clean Energy Fund”, respectively, effective July 1, 2011; P.A. 13-5 amended Subsec. (b) to delete provisions re Energy Conservation and Load Management Fund, effective May 8, 2013; P.A. 14-134 amended Subsec. (a) by deleting references to electric company, effective June 6, 2014; P.A. 18-50 amended Subsec. (a) by changing “Energy Conservation and Load Management Fund” to “Conservation and Load Management Plan” and deleting provision re effect on Sec. 16-245m(b), effective January 1, 2020; P.A. 25-173 amended Subsec. (a) to designate existing provisions as new Subdiv. (1) and therein redesignate existing Subdivs. (1) to (3) as Subparas. (A) to (C) and existing Subparas. (A) and (B) as clauses (i) and (ii), add new Subdiv. (2) re electric distribution company may petition authority for financing order re financed utility services, designate provisions re hearing re disbursements to General Fund as new Subdiv. (3) and therein add “or financed utility services”, and make a technical change, effective July 1, 2025.

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Sec. 16-245g. Competitive transition assessment. Determination by authority of amount and how applied to electric customers. Duration. (a) The Public Utilities Regulatory Authority shall assess and beginning January 1, 2000, or a later date determined by the authority in a finance order with respect to any subsequent issuance of rate reduction bonds, impose the competitive transition assessment which shall be imposed on all customers of each electric distribution company to provide funds for the purposes described in subsection (d) of this section. The authority shall hold a hearing that shall be conducted as a contested case in accordance with chapter 54, except as otherwise provided in section 16-245f, to determine the amount of the competitive transition assessment.

(b) The authority shall consider the effect on all customer rates and other factors relevant to reducing rates in determining the amount of the competitive transition assessment and the manner in which and the period over which it shall be imposed in any decision of the authority to set or adjust the competitive transition assessment.

(c) The competitive transition assessment shall be determined by the authority in a general and equitable manner and, in accordance with the provisions of subsection (b) of section 16-245f, shall be imposed on all customers at a rate that is applied equally to all customers of the same class in accordance with methods of allocation in effect on July 1, 1998, or a later date determined by the authority in a finance order with respect to any subsequent issuance of rate reduction bonds, provided the competitive transition assessment shall not be imposed on customers receiving services under a special contract which is in effect on July 1, 1998, or a later date determined by the authority in a finance order with respect to any subsequent issuance of rate reduction bonds, until such special contract expires. The competitive transition assessment shall be imposed beginning on January 1, 2000, or a later date determined by the authority in a finance order with respect to any subsequent issuance of rate reduction bonds, on all customers receiving services under a special contract that is entered into or renewed after July 1, 1998, or a later date determined by the authority in a finance order with respect to any subsequent issuance of rate reduction bonds. The competitive transition assessment shall have a generally applicable manner of determination that may be measured on the basis of percentages of total costs of retail sales of electric generation services. Subject to the provisions of subsection (b) of section 16-245f, the competitive transition assessment shall be payable by customers on an equal basis on the same payment terms and shall be eligible or subject to prepayment on an equal basis. Any exemption of the competitive transition assessment by customers under a special contract shall not result in an increase in rates to any customer.

(d) The authority shall establish, fix and revise the competitive transition assessment in an amount sufficient at all times to: (1) Pay the principal of and the interest and any credit enhancement or premium on rate reduction bonds as the same shall become due and payable; (2) to pay all reasonable and necessary expenses relating to the financing; and (3) to pay an electric distribution company stranded costs or financed utility services that are not funded with the proceeds of rate reduction bonds and interim capital costs determined under subdivision (1) of subsection (e) of section 16-244g.

(e) The competitive transition assessment shall be charged to customers until the rate reduction bonds are paid in full, including all principal, interest, premium, costs and arrearages on such bonds, by the financing entity and stranded costs and financed utility services not funded with the proceeds of rate reduction bonds are fully recovered by the electric distribution company. Amounts collected from a customer shall be allocated on a pro rata basis among (1) rates and charges described in subparagraph (A) of subdivision (2) of subsection (a) of section 16-245e, (2) rates and charges described in subparagraph (B) of subdivision (2) of subsection (a) of section 16-245e, and (3) other charges. To the extent that the authority, when issuing a financing order, determines that special treatment on customers' bills is necessary or desirable to distinguish rates and charges described in subparagraph (A) of subdivision (2) of subsection (a) of section 16-245e from rates and charges described in subparagraph (B) of subdivision (2) of subsection (a) of section 16-245e in order to facilitate the successful issuance and sale of rate reduction bonds, it may so provide as part of such financing order.

(P.A. 98-28, S. 10, 117; Sept. 8 Sp. Sess. P.A. 03-1, S. 4; P.A. 10-179, S. 127; P.A. 11-80, S. 1; P.A. 14-134, S. 86; P.A. 25-173, S. 12.)

History: P.A. 98-28 effective July 1, 1998; Sept. 8 Sp. Sess. P.A. 03-1 amended Subsec. (a) to add exception from contested case hearing requirement as provided in Sec. 16-245f, effective September 10, 2003; P.A. 10-179 amended Subsec. (c) by adding references to Sec. 16-245f(b), effective May 7, 2010; 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; P.A. 14-134 amended Subsec. (d) by replacing “electric company” with “electric distribution company” in Subdiv. (3) and amended Subsec. (e) by deleting reference to electric company, effective June 6, 2014; P.A. 25-173 added “or a later date determined by the authority in a finance order with respect to any subsequent issuance of rate reduction bonds,” in Subsecs. (a) and (c), further amended Subsec. (c) to make a technical change, added reference to financed utility services in Subsecs. (d) and (e), and further added “and any credit enhancement or premium” in Subsec. (d), and “, including all principal, interest, premium, costs and arrearages on such bonds,” in Subsec. (e), effective July 1, 2025.

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Sec. 16-245h. Transition property. Surplus competitive transition assessment. Restrictions on use of transition property by electric distribution companies. (a) The competitive transition assessment described in subparagraph (A) of subdivision (2) of subsection (a) of section 16-245e shall constitute transition property when, and to the extent that, a financing order authorizing such portion of the competitive transition assessment has become effective in accordance with sections 16-245e to 16-245k, inclusive, and the transition property shall thereafter continuously exist as property for all purposes with all of the rights and privileges of sections 16-245e to 16-245k, inclusive, for the period and to the extent provided in the financing order, but in any event until the rate reduction bonds are paid in full, including all principal, interest, premium, costs, and arrearages on such bonds. Prior to its sale or other transfer by the electric distribution company pursuant to sections 16-245e to 16-245k, inclusive, transition property, other than transition property in respect of the economic recovery transfer or in respect to disbursements to the General Fund to sustain funding of conservation and load management and renewable energy investment programs, shall be a vested contract right of the electric distribution company, notwithstanding any contrary treatment thereof for accounting, tax, or other purpose. Transition property in respect of disbursements to the General Fund to sustain funding of conservation and load management and renewable energy investment programs shall immediately upon its creation vest solely in the financing entity. Transition property in respect to the economic recovery transfer shall immediately upon its creation vest solely in the financing entity. Notwithstanding the authority's calculation of costs that may be collected pursuant to subsection (b) of section 16-245e, or the adjustment of rates pursuant to subsection (f) of section 16-245e, transition property in respect to financed utility services shall immediately upon its creation vest solely in the applicable electric distribution company. The electric distribution company shall not include transition property in its calculation of any rate base and shall have no right, title or interest in transition property in respect to the economic recovery transfer or in respect of disbursements to the General Fund to sustain funding of conservation and load management and renewable energy investment programs, and in respect of such transition property shall be only a collection agent on behalf of the financing entity.

(b) Any surplus competitive transition assessment described in subparagraph (A) of subdivision (2) of subsection (a) of section 16-245e in excess of the amounts necessary to pay principal, premium, if any, interest and expenses of the issuance of the rate reduction bonds shall be remitted to the financing entity and may be used to benefit customers if this would not result in a recharacterization of the tax, accounting, and other intended characteristics of the financing, including, but not limited to, the following:

(1) Avoiding the recognition of debt on the electric distribution company's balance sheet for financial accounting and regulatory purposes;

(2) Treating the rate reduction bonds as debt of the electric distribution company or its affiliates for federal income tax purposes;

(3) Treating the transfer of the transition property by the electric distribution company as a true sale for bankruptcy purposes; or

(4) Avoiding any adverse impact of the financing on the credit rating of the rate reduction bonds or the electric distribution company.

(c) Electric distribution companies may sell and assign all or portions of their interest in transition property to an affiliate. Electric distribution companies or their affiliates may sell or assign their interests to one or more financing entities that make that property the basis for issuance of rate reduction bonds to the extent approved in the pertinent financing orders. Electric distribution companies, their affiliates, or financing entities may pledge transition property as collateral, directly or indirectly, for rate reduction bonds to the extent approved in the pertinent financing orders providing for a security interest in the transition property, in the manner as set forth in section 16-245k. In addition, transition property may be sold or assigned by (1) the financing entity or a trustee for the holders of rate reduction bonds in connection with the exercise of remedies upon a default, or (2) any person acquiring the transition property after a sale or assignment pursuant to this subsection.

(d) To the extent that any interest in transition property is so sold or assigned, or is so pledged as collateral, the authority shall authorize the electric distribution company to contract with the financing entity that it will continue to operate its system to provide service to its customers, will collect amounts in respect of the competitive transition assessment for the benefit and account of the financing entity, and will account for and remit these amounts to or for the account of the financing entity. Contracting with the financing entity in accordance with that authorization shall not impair or negate the characterization of the sale, assignment, or pledge as an absolute transfer, a true sale, or security interest, as applicable.

(P.A. 98-28, S. 11, 117; Sept. 8 Sp. Sess. P.A. 03-1, S. 5; P.A. 04-180, S. 2; P.A. 10-179, S. 128; P.A. 11-61, S. 50; 11-80, S. 1; P.A. 14-134, S. 87; P.A. 25-173, S. 13.)

History: P.A. 98-28 effective July 1, 1998; Sept. 8 Sp. Sess. P.A. 03-1 amended Subsec. (a) to add provisions re transition property in respect of disbursements to the General Fund, effective September 10, 2003; P.A. 04-180 amended Subsec. (a) to make technical changes and to replace “described in this subsection” with “in respect of disbursements to the General Fund to sustain funding of conservation and load management and renewable energy investment programs”, effective June 1, 2004; P.A. 10-179 amended Subsec. (a) by adding provisions re economic recovery transfer, and amended Subsec. (b) to provide for treatment of surplus competitive transition assessment re economic recovery revenue bonds, effective May 7, 2010; P.A. 11-61 amended Subsec. (b) to delete provisions re payment of economic recovery revenue bonds and use of surplus competitive transition assessment, effective June 21, 2011; pursuant to P.A. 11-80, “department” was changed editorially by the Revisors to “authority” in Subsec. (d), effective July 1, 2011; P.A. 14-134 deleted references to electric company, effective June 6, 2014; P.A. 25-173 amended Subsec. (a) to add provision re transition property in respect to financed utility services shall vest immediately in electric distribution company upon such property's creation and add “not include transition property in its calculation of any rate base and shall”, effective July 1, 2025.

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Sec. 16-245i. Financing orders re the economic recovery transfer, the Energy Conservation and Load Management Fund, the Clean Energy Fund, stranded costs and utility services. (a) The authority may issue financing orders in accordance with sections 16-245e to 16-245k, inclusive, to fund the economic recovery transfer, to sustain funding of conservation and load management and renewable energy investment programs by substituting disbursements to the General Fund from proceeds of rate reduction bonds for such disbursements in furtherance of the Conservation and Load Management Plan established by section 16-245m and from the Clean Energy Fund established by section 16-245n, and to facilitate the provision, recovery, financing, or refinancing of stranded costs and financed utility services. Except for a financing order in respect to the economic recovery revenue bonds, a financing order may be adopted upon the application of an electric distribution company or upon the authority's own motion, pursuant to section 16-245f, and shall become effective in accordance with its terms only after the electric distribution company files with the authority the electric distribution company's written consent to all terms and conditions of the financing order. Any financing order in respect to the economic recovery revenue bonds shall be effective on issuance.

(b) (1) Notwithstanding any general or special law, rule, or regulation to the contrary, except as otherwise provided in this subsection with respect to transition property that has been made the basis for the issuance of rate reduction bonds, the financing orders and the competitive transition assessment shall be irrevocable and the authority shall not have authority either by rescinding, altering, or amending the financing order or otherwise, to revalue or revise for rate-making purposes the stranded costs and financed utility services, or the costs of providing, recovering, financing, or refinancing the stranded costs and financed utility services, the amount of the economic recovery transfer or the amount of disbursements to the General Fund from proceeds of rate reduction bonds substituted for such disbursements in furtherance of the Conservation and Load Management Plan established by section 16-245m, and from the Clean Energy Fund established by section 16-245n, determine that the competitive transition assessment is unjust or unreasonable, or in any way reduce or impair the value of transition property either directly or indirectly by taking the competitive transition assessment into account when setting other rates for the electric distribution company; nor shall the amount of revenues arising with respect thereto be subject to reduction, impairment, postponement, or termination.

(2) Notwithstanding any other provision of this section, the authority shall approve the adjustments to the competitive transition assessment as may be necessary to ensure timely recovery of all stranded costs and financed utility services that are the subject of the pertinent financing order, and the costs of capital associated with the provision, recovery, financing or refinancing thereof, including the costs of issuing, servicing and retiring the rate reduction bonds issued to recover stranded costs and financed utility services contemplated by the financing order and to ensure timely recovery of the costs of issuing, servicing and retiring the rate reduction bonds issued to sustain funding of conservation and load management and renewable energy investment programs contemplated by the financing order, and to ensure timely recovery of the costs of issuing, servicing and retiring the economic recovery revenue bonds issued to fund the economic recovery transfer contemplated by the financing order.

(3) Notwithstanding any general or special law, rule, or regulation to the contrary, any requirement under sections 16-245e to 16-245k, inclusive, or a financing order that the authority take action with respect to the subject matter of a financing order shall be binding upon the authority, as it may be constituted from time to time, and any successor agency exercising functions similar to the authority and the authority shall have no authority to rescind, alter, or amend that requirement in a financing order. Section 16-43 shall not apply to any sale, assignment, or other transfer of or grant of a security interest in any transition property or the issuance of rate reduction bonds under sections 16-245e to 16-245k, inclusive.

(c) The authority shall provide in any financing order for a procedure for the timely approval by the authority of periodic adjustments to the competitive transition assessment that is the subject of the pertinent financing order, as required by subdivision (2) of subsection (b) of this section. The procedure shall require the authority to determine whether the adjustments are required on an annual basis, and at the additional intervals as may be provided for in the financing order, and for the adjustments, if required, to be approved within ninety days of the filing of each adjustment or within such shorter period as may be provided for in the financing order.

(P.A. 98-28, S. 12, 117; June 30 Sp. Sess. P.A. 03-6, S. 47; P.A. 10-179, S. 129; P.A. 11-80, S. 1; P.A. 14-134, S. 88; P.A. 18-50, S. 19; P.A. 25-173, S. 14.)

History: P.A. 98-28 effective July 1, 1998; June 30 Sp. Sess. P.A. 03-6 amended Subsecs. (a) and (b) to provide for a plan to avoid disbursements from the Energy Conservation and Load Management and Renewable Energy Investment funds to the General Fund in the implementation of the budget for the biennium ending June 30, 2005, effective August 20, 2003; P.A. 10-179 amended Subsecs. (a) and (b) to add provisions re financing orders to fund the economic recovery transfer and for economic recovery revenue bonds, effective May 7, 2010; pursuant to P.A. 11-80, “department” and “Renewable Energy Investment Fund” were changed editorially by the Revisors to “authority” and “Clean Energy Fund”, respectively, effective July 1, 2011; P.A. 14-134 amended Subsecs. (a) and (b)(1) by deleting references to electric company, effective June 6, 2014; P.A. 18-50 amended Subsecs. (a) and (b) by changing “Energy Conservation and Load Management Fund” to “Conservation and Load Management Plan”, and making conforming changes, effective January 1, 2020; P.A. 25-173 amended Subsec. (a) to add reference to financed utility services, delete “only” and add “or upon the authority's own motion”, amended Subsec. (b) to add references to financed utility services and make technical changes and amended Subsec. (c) to make a technical change and replace “each anniversary of the issuance of the financing order, or of each additional interval” with “the filing of each adjustment or within such shorter period as may be”, effective July 1, 2025.

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Sec. 16-245j. Rate reduction bonds and economic recovery revenue bonds; terms. (a)(1) Except as provided in subdivision (2) of this subsection, a financing entity may issue rate reduction bonds upon approval by the authority in the pertinent financing order. Rate reduction bonds shall be nonrecourse to the credit or any assets of the electric distribution company or the finance authority, other than the transition property as specified in the pertinent financing order.

(2) Notwithstanding the provisions of subdivision (1) of this subsection, on and after June 21, 2011, no financing entity has the power or is authorized to issue economic recovery revenue bonds. No competitive transition assessment shall be assessed to secure and pay economic recovery revenue bonds.

(b) Except as otherwise provided in this subsection, the state of Connecticut does hereby pledge and agree with the owners of transition property and holders of rate reduction bonds that neither the state nor any agency of the state shall limit, alter, amend, reduce or impair the competitive transition assessment, transition property, financing orders, and all rights thereunder until the obligations, together with the interest thereon, are fully met and discharged, provided nothing contained in this subsection shall preclude the limitation or alteration if and when adequate provision shall be made by law for the protection of the owners and holders. The finance authority as agent for the state is authorized to include this pledge and undertaking for the state in these obligations.

(c) (1) Financing orders and rate reduction bonds shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof, other than the financing entity, shall not constitute a pledge of the full faith and credit of the state or any of its political subdivisions, other than the financing entity, but shall be payable solely from the funds provided under sections 16-245e to 16-245k, inclusive, and shall not constitute an indebtedness of the state within the meaning of any constitutional or statutory debt limitation or restriction and, accordingly, shall not be subject to any statutory limitation on the indebtedness of the state and shall not be included in computing the aggregate indebtedness of the state in respect to and to the extent of any such limitation. This subsection shall in no way preclude bond guarantees or enhancements pursuant to sections 16-245e to 16-245k, inclusive. All rate reduction bonds shall contain on the face thereof a statement to the following effect: “Neither the full faith and credit nor the taxing power of the State of Connecticut is pledged to the payment of the principal of, or interest on, this bond.”

(2) The issuance of rate reduction bonds under sections 16-245e to 16-245k, inclusive, shall not directly, indirectly, or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation therefor or to make any appropriation for their payment.

(3) The exercise of the powers granted by sections 16-245e to 16-245k, inclusive, shall be in all respects for the benefit of the people of this state, for the increase of their commerce, welfare, and prosperity, and as the exercise of such powers shall constitute the performance of an essential public function, neither the finance authority, any electric distribution company, any affiliate of any electric distribution company, any financing entity, or any collection or other agent of any of the foregoing shall be required to pay any taxes or assessments upon or in respect of any revenues or property received, acquired, transferred, or used by the finance authority, any electric distribution company, any affiliate of any electric distribution company, any financing entity, or any collection or other agent of any of the foregoing under the provisions of sections 16-245e to 16-245k, inclusive, or upon or in respect of the income therefrom, and any rate reduction bonds shall be treated as issued by or on behalf of a public instrumentality created under the laws of the state for purposes of chapter 229.

(4) (A) The proceeds of any rate reduction bonds, other than economic recovery revenue bonds, shall be used for the purposes approved by the authority in the financing order, including, but not limited to, disbursements to the General Fund in substitution for such disbursements in furtherance of the Conservation and Load Management Plan established by section 16-245m, and from the Clean Energy Fund established by section 16-245n, the costs of refinancing or retiring of debt of the electric distribution company, and associated federal and state tax liabilities; provided such proceeds shall not be applied to purchase generation assets or to purchase or redeem stock or to pay dividends to parent company shareholders or to pay operating expenses other than taxes resulting from the receipt of such proceeds.

(B) The proceeds of any economic recovery revenue bonds shall be used for the purposes approved by the authority in the financing order, including, but not limited to, funding the economic recovery transfer, provided such proceeds shall not be applied to purchase generation assets or to purchase or redeem stock or to pay dividends to shareholders or operating expenses other than taxes resulting from the receipt of such proceeds.

(5) Rate reduction bonds are made and declared (A) securities in which all public officers and public bodies of the state and its political subdivisions, all insurance companies, state banks and trust companies, national banking associations, savings banks, savings and loan associations, investment companies, executors, administrators, trustees and other fiduciaries may properly and legally invest funds, including capital in their control or belonging to them, and (B) securities which may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the state for any purpose for which the deposit of bonds or obligations of the state is now or may be authorized.

(6) Rate reduction bonds, other than economic recovery revenue bonds, shall mature at such time or times approved by the authority in the financing order. Economic recovery revenue bonds shall mature at such time or times approved by the authority in the financing order, provided such maturity shall not be later than eight years after the date of issuance, provided such maturity may be extended for economic reasons, upon the advice of the financing entity.

(7) Rate reduction bonds issued and at any time outstanding may, if and to the extent permitted under the indenture or other agreement pursuant to which they are issued, be refunded by other rate reduction bonds.

(d) Any rate reduction bonds issued or sold pursuant to or in reliance on and in accordance with any financing order issued by the authority pursuant to sections 16-245e to 16-245k, inclusive, shall be valid and binding in accordance with their terms notwithstanding such financing order is later vacated, modified, or otherwise held to be wholly or partly invalid, unless operation of such financing order has been enjoined, stayed, or suspended by the authority or a court of competent jurisdiction prior to such issuance.

(e) In conjunction with the issuance of economic recovery revenue bonds or state rate reduction bonds: (1) The Treasurer may enter into a trust indenture for the benefit of holders of the rate reduction bonds with a corporate trustee, which may be any trust company or commercial bank qualified to do business within or without the state; such trust indenture shall be consistent with the financing order and may contain such other provisions as may be appropriate including those regulating the investment of funds and the remedies of bondholders; (2) the Treasurer may make representations and agreements for the benefit of the holders of rate reduction bonds to make secondary market disclosures; (3) the Treasurer may enter into interest rate swap agreements and other agreements for the purpose of moderating interest rate risk on rate reduction bonds as permitted elsewhere within sections 16-245e to 16-245k, inclusive, provided the obligations under such agreements are payable from the transition property; (4) the Treasurer may enter into such other agreements and instruments to secure the rate reduction bonds as provided in sections 16-245f to 16-245k, inclusive; and (5) the Treasurer may take such other actions as necessary or appropriate for the issuance and distribution of the rate reduction bonds pursuant to the financing order and the Treasurer and the Secretary of the Office of Policy and Management may make representations and agreements for the benefit of the holders of the rate reduction bonds which are necessary or appropriate to ensure exclusion of the interest payable on the rate reduction bonds from gross income under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended.

(P.A. 98-28, S. 13, 117; June 30 Sp. Sess. P.A. 03-6, S. 48; Sept. 8 Sp. Sess. P.A. 03-1, S. 6; P.A. 04-180, S. 3; P.A. 10-179, S. 130-132; P.A. 11-61, S. 49; 11-80, S. 1; P.A. 14-134, S. 89; P.A. 18-50, S. 20; P.A. 25-173, S. 15.)

History: P.A. 98-28 effective July 1, 1998; June 30 Sp. Sess. P.A. 03-6 amended Subsec. (c) to provide consistency with a plan to avoid disbursements from the Energy Conservation and Load Management and Renewable Energy Investment funds to the General Fund in the implementation of the budget for the biennium ending June 30, 2005, effective August 20, 2003; Sept. 8 Sp. Sess. P.A. 03-1 added Subsec. (e) re powers of Treasurer and Secretary of Office of Policy and Management when the state is the authorized financing entity, effective September 10, 2003; P.A. 04-180 amended Subsec. (e) to make technical changes, effective June 1, 2004; P.A. 10-179 amended Subsec. (a) by adding “or the finance authority”, amended Subsec. (c) by designating existing Subdiv. (4) as Subdiv. (4)(A), inserting reference to economic recovery revenue bonds therein, adding Subdiv. (4)(B) re use of proceeds of economic recovery revenue bonds and adding provisions re economic recovery revenue bonds in Subdiv. (6), and amended Subsec. (e) by replacing provision re authorized financing entity with provision re issuance of economic recovery revenue bonds or state rate reduction bonds, effective May 7, 2010; P.A. 11-61 amended Subsec. (a) by designating existing provisions as Subdiv. (1) and amending same to add exception re Subdiv. (2), and by adding Subdiv. (2) withdrawing authority to issue economic recovery revenue bonds or to charge competitive transition assessment for such bonds, effective June 21, 2011; pursuant to P.A. 11-80, “department” and “Renewable Energy Investment Fund” were changed editorially by the Revisors to “authority” and “Clean Energy Fund”, respectively, effective July 1, 2011; P.A. 14-134 amended Subsecs. (a)(1) and (c) by deleting references to electric company, effective June 6, 2014; P.A. 18-50 amended Subsec. (c)(4)(A) by changing “Energy Conservation and Load Management Fund” to “Conservation and Load Management Plan” and making a conforming change, effective January 1, 2020; P.A. 25-173 amended Subsec. (b) to replace “the state shall neither limit nor alter” with “neither the state nor any agency of the state shall limit, alter, amend, reduce or impair”, amended Subsec. (c)(4)(A) to replace “shareholders” with “parent company shareholders” and add “to pay” and amended Subsec. (c)(6) to remove maturity date limit, effective July 1, 2025.

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Sec. 16-245k. Security interest in transition property; creation; perfection. Transferring transition property. (a) A security interest in transition property is valid, is enforceable against the pledgor and third parties, subject to the rights of any third parties holding security interests in the transition property perfected in the manner described in this section, and attaches when all of the following have taken place:

(1) The authority has issued the financing order authorizing the competitive transition assessment included in the transition property.

(2) Value has been given by the pledgees of the transition property.

(3) The pledgor has signed a security agreement covering the transition property.

(b) A valid and enforceable security interest in transition property is perfected when it has attached and when a financing statement has been filed in accordance with part 5 of article 9 of title 42a naming the pledgor of the transition property as “debtor” and identifying the transition property. In such case, the financing statement shall be filed as if the debtor were located in this state. Any description of the transition property shall be sufficient if it refers to the financing order creating the transition property. A copy of the financing statement shall be filed with the authority by the electric distribution company or the financing entity that is the pledgor or transferor of the transition property, and the authority may require the electric distribution company or the financing entity to make other filings with respect to the security interest in accordance with procedures it may establish, provided that the filings shall not affect the perfection of the security interest.

(c) A perfected security interest in transition property is a continuously perfected security interest in all revenues and proceeds arising with respect thereto, whether or not the revenues or proceeds have accrued. Conflicting security interests shall rank according to priority in time of perfection. Transition property shall constitute property for all purposes, including for contracts securing rate reduction bonds, whether or not the revenues and proceeds arising with respect thereto have accrued.

(d) Subject to the terms of the security agreement covering the transition property and the rights of any third parties holding security interests in the transition property perfected in the manner described in this section, the validity and relative priority of a security interest created under this section are not defeated or adversely affected by the commingling of revenues arising with respect to the transition property with other funds of the electric distribution company that is the pledgor or transferor of, or the collection agent with respect to, the transition property, or by any security interest in a deposit account of that electric distribution company into which the revenues are deposited or in such revenues themselves perfected under article 9 of title 42a or otherwise. Subject to the terms of the security agreement, the pledgees of the transition property shall have a perfected security interest in all cash and deposit accounts of the electric distribution company in which revenues arising with respect to the transition property have been commingled with other funds, but the perfected security interest shall be limited to an amount not greater than the amount of the revenues with respect to the transition property received by the electric distribution company within twelve months before (1) any default under the security agreement, or (2) the institution of insolvency proceedings by or against the electric distribution company, less payments from the revenues to the pledgees during that twelve-month period.

(e) If an event of default occurs under the security agreement covering the transition property, the pledgees of the transition property, subject to the terms of the security agreement, shall have all rights and remedies of a secured party upon default under article 9 of title 42a, and shall be entitled to foreclose or otherwise enforce their security interest in the transition property, subject to the rights of any third parties holding prior security interests in the transition property perfected in the manner provided in this section. In addition, the authority may require, in the financing order creating the transition property, that, in the event of default by the electric distribution company in payment of revenues arising with respect to the transition property, the authority and any successor thereto, upon the application by the pledgees or transferees, including transferees under this section, of the transition property, and without limiting any other remedies available to the pledgees or transferees by reason of the default, shall order the sequestration and payment to the pledgees or transferees of revenues arising with respect to the transition property. Any order shall remain in full force and effect notwithstanding any bankruptcy, reorganization, or other insolvency proceedings with respect to the debtor, pledgor, or transferor of the transition property. Any surplus in excess of amounts necessary to pay principal, premium, if any, interest, costs, and arrearages on the rate reduction bonds, and other costs arising under the security agreement, shall be remitted to the debtor or to the pledgor or transferor.

(f) Sections 42a-9-204 and 42a-9-205 shall apply to a pledge of transition property by an electric distribution company, an affiliate of an electric distribution company, or a financing entity.

(g) This section sets forth the terms by which a consensual security interest can be created and perfected in the transition property. Unless otherwise ordered by the authority with respect to any series of rate reduction bonds on or prior to the issuance of the series, there shall exist a statutory lien as provided in this subsection. Upon the effective date of the financing order, there shall exist a first priority lien on all transition property then existing or thereafter arising pursuant to the terms of the financing order. This lien shall arise by operation of this section automatically without any action on the part of the electric distribution company, any affiliate thereof, the financing entity, or any other person. This lien shall secure all obligations, then existing or subsequently arising, to the holders of the rate reduction bonds issued pursuant to the financing order, the trustee or representative for the holders, and any other entity specified in the financing order. The persons for whose benefit this lien is established shall, upon the occurrence of any defaults specified in the financing order, have all rights and remedies of a secured party upon default under article 9 of title 42a, and shall be entitled to foreclose or otherwise enforce this statutory lien in the transition property. This lien shall attach to the transition property regardless of who shall own, or shall subsequently be determined to own, the transition property including any electric distribution company, any affiliate thereof, the financing entity, or any other person. This lien shall be valid, perfected, and enforceable against the owner of the transition property and all third parties upon the effectiveness of the financing order without any further public notice; provided, however, that any person may, but shall not be required to, file a financing statement in accordance with subsection (b) of this section. Financing statements so filed may be “protective filings” and shall not be evidence of the ownership of the transition property. A perfected statutory lien in transition property is a continuously perfected lien in all revenues and proceeds arising with respect thereto, whether or not the revenues or proceeds have accrued. Conflicting liens shall rank according to priority in time of perfection. Transition property shall constitute property for all purposes, including for contracts securing rate reduction bonds, whether or not the revenues and proceeds arising with respect thereto have accrued. In addition, the authority may require, in the financing order creating the transition property, that, in the event of default by the electric distribution company in payment of revenues arising with respect to transition property, the authority and any successor thereto, upon the application by the beneficiaries of the statutory lien, and without limiting any other remedies available to the beneficiaries by reason of the default, shall order the sequestration and payment to the beneficiaries of revenues arising with respect to the transition property. Any order shall remain in full force and effect notwithstanding any bankruptcy, reorganization, or other insolvency proceedings with respect to the debtor, pledgor, or transferor of the transition property. Any surplus in excess of amounts necessary to pay principal, premium, if any, interest, costs, and arrearages on the rate reduction bonds, and other costs arising in connection with the documents governing the rate reduction bonds, shall be remitted to the debtor or to the pledgor or transferor.

(h) A transfer of transition property by an electric distribution company to an affiliate or to a financing entity, or by an affiliate of an electric distribution company or a financing entity to another financing entity, which the parties have in the governing documentation expressly stated to be a sale or other absolute transfer, in a transaction approved in a financing order, shall be treated as an absolute transfer of all of the transferor's right, title, and interest, as in a true sale, and not as a pledge or other financing, of the transition property, in each case notwithstanding any contrary treatment of such transfer for accounting, tax, or other purposes. Granting to holders of rate reduction bonds a preferred right to revenues of the electric distribution company or the financing entity, or the provision by the company of other credit enhancement with respect to rate reduction bonds, shall not impair or negate the characterization of any transfer as a true sale, in each case notwithstanding any contrary treatment of such transfer for accounting, tax or other purposes.

(i) A transfer of transition property shall be deemed perfected as against third persons when both of the following have taken place:

(1) The authority has issued the financing order authorizing the competitive transition assessment included in the transition property.

(2) An assignment of the transition property in writing has been executed and delivered to the transferee.

(j) As between bona fide assignees of the same right for value without notice, the assignee first filing a financing statement in accordance with part 5 of article 9 of title 42a naming the assignor of the transition property as debtor and identifying the transition property has priority. In such case, the financing statement shall be filed as if the debtor were located in this state. Any description of the transition property shall be sufficient if it refers to the financing order creating the transition property. A copy of the financing statement shall be filed by the assignee or the financing entity with the authority, and the authority may require the assignor or the assignee or the financing entity to make other filings with respect to the transfer in accordance with procedures it may establish, but these filings shall not affect the perfection of the transfer.

(k) Any successor to the electric distribution company, whether pursuant to any bankruptcy, reorganization, or other insolvency proceeding, or pursuant to any merger, sale, or transfer, by operation of law, or otherwise, shall perform and satisfy all obligations of the electric distribution company pursuant to sections 16-245e to 16-245k, inclusive, in the same manner and to the same extent as the electric distribution company, including, but not limited to, collecting and paying to the holders of rate reduction bonds or their representatives or the applicable financing entity revenues arising with respect to the transition property sold to the applicable financing entity or pledged to secure rate reduction bonds.

(l) The authority of the Public Utilities Regulatory Authority to issue financing orders pursuant to sections 16-245e to 16-245k, inclusive, with respect to economic recovery revenue bonds shall expire on December 31, 2012. The expiration of such authority shall have no effect upon any other financing orders adopted by the Public Utilities Regulatory Authority pursuant to sections 16-245e to 16-245k, inclusive, or upon any financing orders adopted by the Public Utilities Regulatory Authority pursuant to sections 16-245e to 16-245k, inclusive, with respect to economic recovery bonds prior to December 31, 2012, or any transition property arising from any such financing orders, or upon the charges authorized to be levied thereunder, or the rights, interests, and obligations of the electric distribution company or a financing entity or holders of rate reduction bonds pursuant to any such financing order, or the authority of the Public Utilities Regulatory Authority to monitor, supervise, or take further action with respect to any such financing order in accordance with the terms of sections 16-245e to 16-245k, inclusive, and of any such financing order.

(P.A. 98-28, S. 14, 117; P.A. 01-132, S. 166, 167; P.A. 03-62, S. 19, 20; Sept. 8 Sp. Sess. P.A. 03-1, S. 7; P.A. 04-180, S. 4; P.A. 10-179, S. 133; P.A. 11-80, S. 1; P.A. 14-134, S. 90; P.A. 25-173, S. 16.)

History: P.A. 98-28 effective July 1, 1998; P.A. 01-132 amended Subsecs. (b) and (j) to replace “part 4” with “part 5” of article 9 of title 42a and add provision that in each case the financing statement shall be filed as if the debtor were located in this state; P.A. 03-62 amended Subsec. (b) to rephrase and reposition provision requiring the financing statement to be filed as if the debtor were located in this state and amended Subsec. (j) to make a technical change; Sept. 8 Sp. Sess. P.A. 03-1 amended Subsecs. (b), (h) and (j) to add references to the financing entity and amended Subsec. (d) to add reference to the collection agent with respect to the transition property and make a technical change, effective September 10, 2003; P.A. 04-180 amended Subsec. (b) to provide that the department may require the financing entity to make other filings with respect to the security interest, effective June 1, 2004; P.A. 10-179 amended Subsec. (1) to apply authority termination date of December 31, 2008, to bonds other than economic recovery revenue bonds and to add provision re termination of authority to issue financing orders with respect to economic recovery revenue bonds, effective May 7, 2010; pursuant to P.A. 11-80, “department” was changed editorially by the Revisors to “authority”, effective July 1, 2011; P.A. 14-134 deleted references to electric company, effective June 6, 2014; P.A. 25-173 amended Subsec. (l) to delete time limit on authority's ability to issue financing orders with respect to bonds other than economic recovery and to make technical and conforming changes, effective July 1, 2025.

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Sec. 16-245m. Energy Conservation Management Board. Conservation and Load Management Plan. (a)(1) Repealed by P.A. 18-50, S. 32.

(2) Repealed by P.A. 14-134, S. 130.

(3) Repealed by P.A. 11-61, S. 187.

(b) Repealed by P.A. 18-50, S. 32.

(c) The Commissioner of Energy and Environmental Protection shall appoint and convene an Energy Conservation Management Board which shall include the Commissioner of Energy and Environmental Protection, or the commissioner's designee, the Consumer Counsel, or the Consumer Counsel's designee, the Attorney General, or the Attorney General's designee, and a representative of: (1) An environmental group knowledgeable in energy conservation program collaboratives; (2) the electric distribution companies in whose territories the activities take place for such programs; (3) a state-wide manufacturing association; (4) a chamber of commerce; (5) a state-wide business association; (6) a state-wide retail organization; (7) a state-wide farm association; (8) a municipal electric energy cooperative created pursuant to chapter 101a; (9) residential customers; (10) low-income residential customers; and (11) municipalities. The board shall also include two representatives selected by the gas companies. The members of the board shall serve for a period of five years and may be reappointed. Representatives of gas companies, electric distribution companies and the municipal electric energy cooperative shall be nonvoting members of the board. The members of the board shall elect a chairperson from its voting members. If any vote of the board results in an equal division of its voting members, such vote shall fail.

(d) (1) Not later than November 1, 2012, and every three years thereafter, electric distribution companies, as defined in section 16-1, in coordination with the gas companies, as defined in section 16-1, shall submit to the Energy Conservation Management Board a combined electric and gas Conservation and Load Management Plan, in accordance with the provisions of this section, to implement cost-effective energy conservation programs, demand management and market transformation initiatives. All supply and conservation and load management options shall be evaluated and selected within an integrated supply and demand planning framework. Services provided under the plan shall be available to all customers of electric distribution companies and gas companies, provided a customer of an electric distribution company may not be denied such services based on the fuel such customer uses to heat such customer's home. The Energy Conservation Management Board shall advise and assist the electric distribution companies and gas companies in the development of such plan. The Energy Conservation Management Board shall approve the plan before transmitting it to the Commissioner of Energy and Environmental Protection for approval. The commissioner shall, in an uncontested proceeding during which the commissioner may hold a public meeting, approve, modify or reject said plan prepared pursuant to this subsection. Following approval by the commissioner, the board shall assist the companies in implementing the plan and collaborate with the Connecticut Green Bank to further the goals of the plan. Said plan shall include a detailed budget sufficient to fund all energy efficiency that is cost-effective or lower cost than acquisition of equivalent supply, and shall be reviewed and approved by the commissioner. The Public Utilities Regulatory Authority shall, not later than sixty days after the plan is approved by the commissioner, ensure that the balance of revenues required to fund such plan is provided through fully reconciling conservation adjustment mechanisms. Electric distribution companies shall collect a conservation adjustment mechanism that ensures the plan is fully funded by collecting an amount that is not more than the sum of six mills per kilowatt hour of electricity sold to each end use customer of an electric distribution company during the three years of any Conservation and Load Management Plan. The authority shall ensure that the revenues required to fund such plan with regard to gas companies are provided through a fully reconciling conservation adjustment mechanism for each gas company of not more than the equivalent of four and six-tenth cents per hundred cubic feet during the three years of any Conservation and Load Management Plan, provided such companies may exceed the equivalent of four and six-tenth cents per hundred cubic feet to fund the net costs of any agreement approved pursuant to section 45 of public act 25-173*. Said plan shall include steps that would be needed to achieve the goal of weatherization of eighty per cent of the state's residential units by 2030, and steps to reduce energy consumption by 1.6 million MMBtu, or the equivalent megawatts of electricity, as defined in subdivision (4) of section 22a-197, annually each year for calendar years commencing on and after January 1, 2020, up to and including calendar year 2025. Each program contained in the plan shall be reviewed by such companies and accepted, modified or rejected by the Energy Conservation Management Board prior to submission to the commissioner for approval. The Energy Conservation Management Board shall, as part of its review, examine opportunities to offer joint programs providing similar efficiency measures that save more than one fuel resource or otherwise to coordinate programs targeted at saving more than one fuel resource. Any costs for joint programs shall be allocated equitably among the conservation programs. The Energy Conservation Management Board shall give preference to projects that maximize the reduction of federally mandated congestion charges.

(2) There shall be a joint committee of the Energy Conservation Management Board and the board of directors of the Connecticut Green Bank. The boards shall each appoint members to such joint committee. The joint committee shall examine opportunities to coordinate the programs and activities funded by the Clean Energy Fund pursuant to section 16-245n with the programs and activities contained in the plan developed under this subsection and to provide financing to increase the benefits of programs funded by the plan so as to reduce the long-term cost, environmental impacts and security risks of energy in the state. Such joint committee shall hold its first meeting on or before August 1, 2005.

(3) Programs included in the plan developed under subdivision (1) of this subsection shall be screened through cost-effectiveness testing that compares the value and payback period of program benefits for all energy savings to program costs to ensure that programs are designed to obtain energy savings and system benefits, including mitigation of federally mandated congestion charges, whose value is greater than the costs of the programs. Program cost-effectiveness shall be reviewed by the Commissioner of Energy and Environmental Protection annually, or otherwise as is practicable, and shall incorporate the results of the evaluation process set forth in subdivision (4) of this subsection. If a program is determined to fail the cost-effectiveness test as part of the review process, it shall either be modified to meet the test or shall be terminated, unless it is integral to other programs that in combination are cost-effective. On or before March 1, 2005, and on or before March first annually thereafter, the board shall provide a report, in accordance with the provisions of section 11-4a, to the joint standing committees of the General Assembly having cognizance of matters relating to energy and the environment that documents (A) expenditures and fund balances and evaluates the cost-effectiveness of such programs conducted in the preceding year, and (B) the extent to and manner in which the programs of such board collaborated and cooperated with programs, established under section 7-233y, of municipal electric energy cooperatives. To maximize the reduction of federally mandated congestion charges, programs in the plan may allow for disproportionate allocations between the amount of contributions pursuant to this section by a certain rate class and the programs that benefit such a rate class. Before conducting such evaluation, the board shall consult with the board of directors of the Connecticut Green Bank. The report shall include a description of the activities undertaken during the reporting period.

(4) The Commissioner of Energy and Environmental Protection shall adopt an independent, comprehensive program evaluation, measurement and verification process to ensure the Energy Conservation Management Board's programs are administered appropriately and efficiently, comply with statutory requirements, programs and measures are cost effective, evaluation reports are accurate and issued in a timely manner, evaluation results are appropriately and accurately taken into account in program development and implementation, and information necessary to meet any third-party evaluation requirements is provided. An annual schedule and budget for evaluations as determined by the board shall be included in the plan filed with the commissioner pursuant to subdivision (1) of this subsection. The electric distribution and gas company representatives and the representative of a municipal electric energy cooperative may not vote on board plans, budgets, recommendations, actions or decisions regarding such process or its program evaluations and their implementation. Program and measure evaluation, measurement and verification shall be conducted on an ongoing basis, with emphasis on impact and process evaluations, programs or measures that have not been studied, and those that account for a relatively high percentage of program spending. Evaluations shall use statistically valid monitoring and data collection techniques appropriate for the programs or measures being evaluated. All evaluations shall contain a description of any problems encountered in the process of the evaluation, including, but not limited to, data collection issues, and recommendations regarding addressing those problems in future evaluations. The board shall contract with one or more consultants not affiliated with the board members to act as an evaluation administrator, advising the board regarding development of a schedule and plans for evaluations and overseeing the program evaluation, measurement and verification process on behalf of the board. Consistent with board processes and approvals and the Commissioner of Energy and Environmental Protection's decisions regarding evaluation, such evaluation administrator shall implement the evaluation process by preparing requests for proposals and selecting evaluation contractors to perform program and measure evaluations and by facilitating communications between evaluation contractors and program administrators to ensure accurate and independent evaluations. In the evaluation administrator's discretion and at his or her request, the electric distribution and gas companies shall communicate with the evaluation administrator for purposes of data collection, vendor contract administration, and providing necessary factual information during the course of evaluations. The evaluation administrator shall bring unresolved administrative issues or problems that arise during the course of an evaluation to the board for resolution, but shall have sole authority regarding substantive and implementation decisions regarding any evaluation. Board members, including electric distribution and gas company representatives, may not communicate with an evaluation contractor about an ongoing evaluation except with the express permission of the evaluation administrator, which may only be granted if the administrator believes the communication will not compromise the independence of the evaluation. The evaluation administrator shall file evaluation reports with the board and with the Commissioner of Energy and Environmental Protection in its most recent uncontested proceeding pursuant to subdivision (1) of this subsection and the board shall post a copy of each report on its Internet web site. The board and its members, including electric distribution and gas company representatives, may file written comments regarding any evaluation with the commissioner or for posting on the board's Internet web site. Within fourteen days of the filing of any evaluation report, the commissioner, members of the board or other interested persons may request in writing, and the commissioner shall conduct, a transcribed technical meeting to review the methodology, results and recommendations of any evaluation. Participants in any such transcribed technical meeting shall include the evaluation administrator, the evaluation contractor and the Office of Consumer Counsel at its discretion. On or before November 1, 2011, and annually thereafter, the board shall report to the joint standing committee of the General Assembly having cognizance of matters relating to energy, with the results and recommendations of completed program evaluations.

(5) Programs included in the plan developed under subdivision (1) of this subsection may include, but not be limited to: (A) Conservation and load management programs, including programs that benefit low-income individuals; (B) research, development and commercialization of products or processes which are more energy-efficient than those generally available; (C) development of markets for such products and processes; (D) support for energy use assessment, real-time monitoring systems, engineering studies and services related to new construction or major building renovation; (E) the design, manufacture, commercialization and purchase of energy-efficient appliances and heating, air conditioning and lighting devices; (F) program planning and evaluation; (G) indoor air quality programs relating to energy conservation; (H) joint fuel conservation initiatives programs targeted at reducing consumption of more than one fuel resource; (I) conservation of water resources; (J) public education regarding conservation; and (K) demand-side technology programs recommended by the Conservation and Load Management Plan. Support for such programs may be by direct funding, manufacturers' rebates, sale price and loan subsidies, leases and promotional and educational activities. The Energy Conservation Management Board shall periodically review contractors to determine whether they are qualified to conduct work related to such programs and to ensure that in making the selection of contractors to deliver programs, a fair and equitable process is followed. There shall be a rebuttable presumption that such contractors are deemed technically qualified if certified by the Building Performance Institute, Inc. or by an organization selected by the commissioner. The plan shall also provide for expenditures by the board for the retention of expert consultants and reasonable administrative costs provided such consultants shall not be employed by, or have any contractual relationship with, an electric distribution company or a gas company. Such costs shall not exceed five per cent of the total cost of the plan.

(e) Deleted by P.A. 11-80, S. 33.

(f) Not later than December 31, 2006, and not later than December thirty-first every five years thereafter, the Energy Conservation Management Board shall, after consulting with the Connecticut Green Bank, conduct an evaluation of the performance of the programs and activities specified in the plan approved by the commissioner pursuant to subsection (d) of this section and submit a report, in accordance with the provisions of section 11-4a, of the evaluation to the joint standing committee of the General Assembly having cognizance of matters relating to energy.

(g) Repealed by P.A. 06-186, S. 91.

(P.A. 98-28, S. 33, 117; P.A. 03-135, S. 9; June 30 Sp. Sess. P.A. 03-6, S. 49; Sept. 8 Sp. Sess. P.A. 03-1, S. 9; P.A. 04-129, S. 1; 04-236, S. 12, 13; 04-247, S. 3; P.A. 05-251, S. 89; June Sp. Sess. P.A. 05-1, S. 5; P.A. 06-186, S. 91; P.A. 07-152, S. 3; 07-242, S. 105; P.A. 10-179, S. 134; P.A. 11-61, S. 187; 11-80, S. 33; P.A. 13-5, S. 13; 13-298, S. 16; P.A. 14-94, S. 29; 14-134, S. 14, 130; P.A. 18-50, S. 9, 21, 32; P.A. 21-139, S. 1; P.A. 25-173, S. 46.)

*Note: Section 45 of public act 25-173 is special in nature and therefore has not been codified but remains in full force and effect according to its terms.

History: P.A. 98-28 effective July 1, 1998; P.A. 03-135 amended Subsec. (d) to divide existing provisions into Subdivs. (1) to (3) and make conforming changes, to add provision re review of each program and acceptance or rejection by the Energy Conservation Management Board in Subdiv. (1), to add provision re cost-effectiveness testing in Subdiv. (2), and to add “real-time monitoring systems” in Subdiv. (3), effective July 1, 2003; June 30 Sp. Sess. P.A. 03-6 amended Subsec. (a) to provide for a plan to avoid disbursements from the Energy Conservation and Load Management Fund to the General Fund in the implementation of the budget for the biennium ending June 30, 2005, effective August 20, 2003; Sept. 8 Sp. Sess. P.A. 03-1, S. 9 re disbursements to the General Fund for the biennium ending June 30, 2005, was added editorially by the Revisors as Subsec. (e), effective September 10, 2003; P.A. 04-129 amended Subsec. (d)(3) to redesignate existing Subpara. (G) as Subpara. (H) and to add new Subpara. (G) re indoor air quality programs; P.A. 04-236 amended Subsecs. (a) and (d)(2) to make technical changes, effective June 8, 2004; P.A. 04-247 amended Subsec. (d)(2) to change reporting date from January 31, 2001, and annually thereafter until January 31, 2006, to March 1, 2005, and March 1, 2006, effective July 1, 2004; P.A. 05-251, S. 89 added provisions, designated by the Revisors as Subsec. (g), re monthly disbursements to General Fund from August 1, 2006, to July 31, 2007, effective June 30, 2005; June Sp. Sess. P.A. 05-1 made technical changes in Subsecs. (a), (c) and (d), amended Subsec. (c) to add new Subdivs. (10) and (11) re a representative of a municipal electric energy cooperative and two representatives selected by gas companies and to add provisions re voting on unrelated matters, amended Subsec. (d)(1) to require plan to be consistent with the comprehensive energy plan, to require examination of opportunities for joint programs, and to require preference for projects that maximize reduction of federally mandated congestion charges, added new Subsec. (d)(2) establishing a joint committee of the Energy Conservation Management Board and the Renewable Energy Investments Advisory Committee, renumbering former Subsec. (d)(2) as new Subsec. (d)(3), amended Subsec. (d)(3) to add language re system benefits, to change the deadline for providing report, to require report to contain information on cooperation with municipal electric energy cooperatives, to allow disproportionate allocations from the funds, to require consultation with the Renewable Energy Investments Advisory Committee, and to require the report to describe collaboration with the Renewable Energy Investment Fund, renumbering former Subsec. (d)(3) as new Subsec. (d)(4), amended Subsec. (d)(4) to add language re programs to benefit low-income individuals and joint fuel conservation initiatives, and to revise language re expenditures for consultants and administrative costs, and added Subsec. (f) re evaluation of the performance of programs, effective July 21, 2005; P.A. 06-186 repealed P.A. 05-251, S. 89, previously designated by the Revisors as Subsec. (g), re monthly disbursements to General Fund from August 1, 2006, to July 31, 2007, effective July 1, 2006; P.A. 07-152 amended Subsec. (d)(1) to require Department of Public Utility Control to review comprehensive plan and amended Subsecs. (d) and (f) to change Renewable Energy Investments Advisory Committee to Renewable Energy Investments Board; P.A. 07-242 amended Subsec. (d)(1) to delete provision re comprehensive energy plan approved pursuant to Sec. 16a-7a, amended Subsec. (d)(3) to add “Such testing shall include an analysis of the effects of investments on increasing the state's load factor” and added Subsec. (d)(4)(J) re demand-side technology programs, effective July 1, 2007; P.A. 10-179 amended Subsec. (a) by adding Subdiv. (3) re financing order for economic recovery revenue bonds and use of funds raised thereby, effective May 7, 2010; P.A. 11-61 repealed Subsec. (a)(3) re financing order for economic recovery revenue bonds, effective June 21, 2011; P.A. 11-80 amended Subsecs. (a) and (b) by changing “Department of Public Utility Control” to “Public Utilities Regulatory Authority” and “department” to “authority”, amended Subsec. (c) by changing “Department of Public Utility Control” to “Commissioner of Energy and Environmental Protection”, by deleting former Subdiv. (4) re Department of Environmental Protection, by redesignating existing Subdivs. (5) to (12) as Subdivs. (4) to (11), by making representatives of gas and electric companies nonvoting members, rather than nonvoting on issues re gas and electricity conservation, respectively, and by designating commissioner as chairperson of board, amended Subsec. (d) by changing “Department of Public Utility Control” to “Department of Energy and Environmental Protection”, changing “Renewable Energy Investments Board” to “board of directors of the Clean Energy Finance and Investment Authority” and changing “Renewable Energy Investment Fund” to “Clean Energy Fund”, by adding requirement that plan include steps to achieve weatherization goal in Subdiv. (1), by deleting requirement that cost-effectiveness testing use information from real-time monitoring systems, adding requirement that program cost-effectiveness incorporate results of Subdiv. (4) evaluation process and making technical changes in Subdiv. (3), by adding new Subdiv. (4) re program evaluation, measurement and verification, and by redesignating existing Subdiv. (4) as Subdiv. (5) and amending same by replacing reference to procurement plan with reference to integrated resources plan and adding provision re board to periodically review contractors, deleted former Subsec. (e) re disbursements from July, 2003, to July, 2005, and amended Subsec. (f) by changing “Renewable Energy Investments Board” to “Clean Energy Finance and Investment Authority”, effective July 1, 2011; P.A. 13-5 amended Subsec. (d)(2) to make a technical change, effective May 8, 2013; P.A. 13-298 amended Subsec. (c) to add provision re Commissioner of Energy and Environmental Protection, Consumer Counsel and Attorney General or their designees as board members, to delete former Subdivs. (2), (3) and (10), to add new Subdiv. (7) re state-wide farm association, to redesignate existing Subdivs. (4) to (8) as Subdivs. (2) to (6), existing Subdiv. (9) as Subdiv. (8) and existing Subdiv. (11) as Subdiv. (9), to add provision re board to include 2 representatives selected by gas companies, to replace provision re commissioner to serve as chairperson of board with provision re members of board to elect a chairperson, and to add provision re failure of vote, substantially revised Subsec. (d)(1) to (3) re submitting, approving, financing and reviewing combined electric and gas Conservation and Load Management Plan and related programs, amended Subsec. (d)(4) to replace department with commissioner, amended Subsec. (d)(5) to add new Subpara. (I) re water resources conservation and to redesignate existing Subparas. (I) and (J) as Subparas. (J) and (K), to add provisions re review of contractors by Energy Conservation Management Board and consultants employed by gas companies and to replace “revenue collected from the assessment” with “cost of the plan”, and made technical and conforming changes, effective July 8, 2013; pursuant to P.A. 14-94, “Clean Energy Finance and Investment Authority” was changed editorially by the Revisors to “Connecticut Green Bank”, effective June 6, 2014; P.A. 14-134 amended Subsec. (a)(1) by deleting provision re amortization of costs incurred prior to July 1, 1997, and repealed Subsec. (a)(2), effective June 6, 2014; P.A. 18-50 repealed Subsec. (a)(1) and Subsec. (b), amended Subsec. (d)(1) by adding “demand management” re plan, deleting provision re application for reimbursement, adding provision re denial of services based on customer heating fuel, deleting provision re budget exceeding revenue, replacing “budget” with “plan”, replacing provision re mechanism of not more than 3 mills with “mechanisms”, adding provision re conservation adjustment mechanism of not more than 6 mills per kilowatt hour of electricity, adding provision re reduction of energy consumption annually for calendar years commencing on and after January 1, 2020 to 2025, and making conforming changes, and amended Subsec. (d)(3) by replacing “to the Energy Conservation and Load Management Funds” with “pursuant to this section”, effective January 1, 2020; P.A. 21-139 amended Subsec. (c) by adding Subdiv. (10) re low-income residential customers and Subdiv. 11 re municipalities, effective July 1, 2021; P.A. 25-173 amended Subsec. (d)(1) to add provision re exceeding the equivalent of 4 and six-tenth cents per 100 cubic feet to fund net costs of any agreement approved pursuant to the electric active demand and gas demand response pilot program and make a technical change.

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Sec. 16-256l. Monthly subscriber fee for deposit into the firefighters cancer relief account. Notice. Exemption. (a) As used in this section, “provider” means a telephone or telecommunications company providing local telephone service, provider of commercial mobile radio service, as defined in 47 CFR Section 20.3, as amended from time to time, and voice over Internet protocol service provider, as defined in section 28-30b.

(b) On and after January 1, 2027, each provider shall assess against each subscriber a fee in an amount equal to five cents per month per access line. Each fee assessed under this subsection shall be remitted to the office of the State Treasurer for deposit into the firefighters cancer relief account established pursuant to section 7-313h, not later than the fifteenth day of each month. No part of any fee assessed under this subsection shall be subject to a refund.

(c) Not later than November 1, 2026, the provider shall provide written notice to each subscriber disclosing the amount and frequency of such fee.

(d) The fee described in subsection (b) of this section shall not apply to any prepaid wireless telecommunications service, as defined in section 28-30b.

(P.A. 25-168, S. 407; Nov. Sp. Sess. P.A. 25-3, S. 11.)

History: P.A. 25-168 effective June 30, 2025; Nov. Sp. Sess. P.A. 25-3 amended Subsec. (b) to replace “January 1, 2026” with “January 1, 2027” and delete provision re subscriber opting out of fee, amended Subsec. (c) to replace provision re 60 days before provider assesses fee with “November 1, 2026”, replace “such subscriber” with “each subscriber”, delete former Subdiv. (1) designator and delete former Subdivs. (2) to (5) re subscriber opting out of fee, assessment of fee if subscriber does not opt out, process to opt out and date when fee will be assessed, respectively, and made technical changes, effective November 18, 2025.

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Sec. 16-262d. Termination of residential utility service on account of nonpayment. Notice. Nontermination in event of illness during pendency of customer complaint or investigation. Amortization agreement. Appeal. Notice re credit rating information. (a) No electric distribution, gas, telephone or water company, no electric supplier and no municipal utility furnishing electric, gas or water service may terminate such service to a residential dwelling on account of nonpayment of a delinquent account unless such company, electric supplier or municipal utility first gives notice of such delinquency and impending termination by first class mail addressed to the customer to which such service is billed, not less than thirteen calendar days prior to the proposed termination, except that if an electric distribution or gas company, electric supplier or municipal utility furnishing electric or gas service has issued a notice under this subsection but has not terminated service prior to issuing a new bill to the customer, such company, electric supplier or municipal utility may terminate such service only after mailing the customer an additional notice of the impending termination, addressed to the customer to which such service is billed either (1) by first class mail at least thirteen calendar days prior to the proposed termination, or (2) by certified mail, not less than seven calendar days prior to the proposed termination. In the event that multiple dates of proposed termination are provided to a customer, no such company, electric supplier or municipal utility shall terminate service before the latest of such dates. For purposes of this subsection, the thirteen-day periods and seven-day period shall commence on the date such notice is mailed. If such company, electric supplier or municipal utility does not terminate service within one hundred twenty days after mailing the initial notice of termination, such company, electric supplier or municipal utility shall give the customer a new notice not less than thirteen days prior to termination. Every termination notice issued by a public service company, electric supplier or municipal utility shall contain or be accompanied by an explanation of the rights of the customer provided in subsection (c) of this section.

(b) No such company, electric supplier or municipal utility shall effect termination of service for nonpayment during such time as any resident of a dwelling to which such service is furnished is seriously ill, if the fact of such serious illness is certified to such company, electric supplier or municipal utility by a registered physician, a physician assistant or an advanced practice registered nurse within such period of time after the mailing of a termination notice pursuant to subsection (a) of this section as the Public Utilities Regulatory Authority may by regulation establish, provided the customer agrees to amortize the unpaid balance of his account over a reasonable period of time and keeps current his account for utility service as charges accrue in each subsequent billing period.

(c) No such company, electric supplier or municipal utility shall effect termination of service to a residential dwelling for nonpayment during the pendency of any complaint, investigation, hearing or appeal, initiated by a customer within such period of time after the mailing of a termination notice pursuant to subsection (a) of this section as the Public Utilities Regulatory Authority may by regulation establish; provided, any telephone company during the pendency of any complaint, investigation, hearing or appeal may terminate telephone service if the amount of charges accruing and outstanding subsequent to the initiation of any complaint, investigation, hearing or appeal exceeds on a monthly basis the average monthly bill for the previous three months or if the customer fails to keep current such telephone account for all undisputed charges or fails to comply with any amortization agreement as hereafter provided.

(d) Any customer who has initiated a complaint or investigation under subsection (c) of this section shall be given an opportunity for review of such complaint or investigation by a review officer of the company, electric supplier or municipal utility other than a member of such company's, electric supplier's or municipal utility's credit authority, provided the Public Utilities Regulatory Authority may waive this requirement for any company, electric supplier or municipal utility employing fewer than twenty-five full-time employees, which review shall include consideration of whether the customer should be permitted to amortize the unpaid balance of his account over a reasonable period of time. No termination shall be effected for any customer complying with any such amortization agreement, provided such customer also keeps current such account for utility service as charges accrue in each subsequent billing period.

(e) Any customer whose complaint or request for an investigation has resulted in a determination by a company, electric supplier or municipal utility which is adverse to such customer may appeal such determination to the Public Utilities Regulatory Authority or a hearing officer appointed by the authority.

(f) If, following the receipt of a termination notice or the entering into of an amortization agreement, the customer makes a payment or payments amounting to twenty per cent of the balance due, the public service company or electric supplier shall not terminate service without giving notice to the customer, in accordance with the provisions of this section, of the conditions the customer must meet to avoid termination, but such subsequent notice shall not entitle such customer to further investigation, review or appeal by the company, electric supplier, municipal utility or authority.

(g) No electric distribution, gas or water company, gas registrant or municipal utility furnishing electric, gas or water service shall submit to a credit rating agency, as defined in section 36a-695, any information about a residential customer's nonpayment for electric, gas or water service unless the customer is more than one hundred twenty days delinquent in paying for such service. In no event shall such a company, gas registrant or municipal utility submit to a credit rating agency any information about a residential customer's nonpayment for such service if the customer has initiated a complaint, investigation, hearing or appeal with regard to such service under subsection (c) of this section that is pending before the authority. If such a company, gas registrant or municipal utility intends to submit to a credit rating agency information about a customer's nonpayment for service, it shall, at least thirty days before submitting such information, send the customer by first class mail notification that includes the statement, “AS AUTHORIZED BY LAW, FOR RESIDENTIAL ACCOUNTS, WE SUPPLY PAYMENT INFORMATION TO CREDIT RATING AGENCIES. IF YOUR ACCOUNT IS MORE THAN ONE HUNDRED TWENTY DAYS DELINQUENT, THE DELINQUENCY REPORT COULD HARM YOUR CREDIT RATING”.

(h) No telephone company or certified telecommunications provider shall submit to a credit rating agency, as defined in section 36a-695, any information about a residential customer's nonpayment for telephone or telecommunications service, unless the customer is more than sixty days delinquent in paying for such service. In no event shall a telephone company or certified telecommunications provider submit to a credit rating agency any information about a residential customer's nonpayment for such service if the customer has initiated a complaint, investigation, hearing or appeal with regard to such service under subsection (c) of this section that is pending before the authority. If a telephone company or certified telecommunications provider intends to submit to a credit rating agency information about a customer's nonpayment for service, it shall, at least thirty days before submitting such information, send the customer, by first class mail, notification that includes the statement, “AS AUTHORIZED BY LAW, FOR RESIDENTIAL ACCOUNTS, WE SUPPLY PAYMENT INFORMATION TO CREDIT RATING OR DEBT COLLECTION AGENCIES. IF YOUR ACCOUNT IS MORE THAN SIXTY DAYS DELINQUENT, THE DELINQUENCY REPORT COULD HARM YOUR CREDIT RATING”.

(P.A. 75-486, S. 1, 69; 75-625, S. 1, 8; P.A. 77-20; 77-614, S. 162, 610; P.A. 80-482, S. 116, 348; P.A. 96-141; P.A. 97-11; P.A. 98-28, S. 39, 117; 98-254; P.A. 00-41; P.A. 11-80, S. 1; P.A. 12-197, S. 32; P.A. 14-134, S. 101; P.A. 18-116, S. 1; P.A. 21-196, S. 17; P.A. 25-173, S. 5.)

History: P.A. 75-486 allowed replacement of public utilities commission with public utilities control authority where appearing in P.A. 75-625; P.A. 77-20 required 13 days' notice of termination rather than 7 days' notice and made period begin on date notice mailed; P.A. 77-614 replaced authority with division of public utility control within the department of business regulation, effective January 1, 1979; P.A. 80-482 made division of public utility control an independent department and deleted reference to abolished department of business regulation; P.A. 96-141 amended Subsec. (a) to add provision re 7 days' notice and to require utilities to include an explanation of customers' rights with notice of termination; P.A. 97-11 amended Subsec. (a) to add Subdiv. designators, adding Subdiv. (1) re 13-day notice by first class mail, and designating as Subdiv. (2) existing language re 7-day notice by certified mail and restated provision re termination when multiple notices of proposed termination are provided to customer; P.A. 98-28 added electric suppliers and electric distribution companies and made technical changes, effective July 1, 1998; P.A. 98-254 added new Subsec. (g) re provision of information concerning residential customers to credit rating agencies; P.A. 00-41 amended Subsec. (g) by making provisions apply to electric distribution companies, certified telecommunications providers and gas registrants and by adding provisions re credit rating notification to customers; 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; P.A. 12-197 amended Subsec. (b) by adding provision allowing certification by an advanced practice registered nurse; P.A. 14-134 amended Subsec. (a) by deleting references to electric company, effective June 6, 2014; P.A. 18-116 amended Subsec. (g) by deleting references to telephone, telecommunications and certified telecommunications providers, replacing references to sixty days with one hundred twenty days, and added Subsec. (h) re information submitted by telephone companies and certified telecommunications providers to credit rating agencies; P.A. 21-196 amended Subsec. (b) by adding reference to physician assistant; P.A. 25-173 amended Subsec. (h) to include reference to debt collection agencies in customer notification, and made technical corrections throughout.

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Sec. 16-262bb. Water quality and treatment surcharge. (a) As used in this section:

(1) “Authority” means the Public Utilities Regulatory Authority;

(2) “Eligible project” means a water company project, whether completed in a single year or a multiyear project, that (A) the authority determines is a major addition, upgrade, improvement or replacement of a critical element of water infrastructure necessary to meet state or federal drinking water regulations adopted or amended after December 16, 2021, (B) has not been authorized by the authority for inclusion in a water company's rate base, and (C) is not subject to the provisions of section 16-262w;

(3) “Perfluoroalkyl and polyfluoroalkyl substances” or “PFAS” has the same meaning as provided in section 22a-255h; and

(4) “Water company” has the same meaning as provided in section 16-1.

(b) Upon the filing of a request for approval by a water company pursuant to subsection (c) of this section, the authority may authorize such water company to recover expenses incurred to date for any water company project determined to be an eligible project. Notwithstanding the provisions of section 16-19, the water company may charge such costs as a water quality and treatment surcharge in addition to such water company's existing authorized rates and charges at the time of filing such request with the authority.

(c) (1) Any water company seeking to impose a water quality and treatment surcharge pursuant to this section shall file a request for approval of such surcharge with the authority containing a water quality and treatment assessment report. Such report shall identify any proposed eligible project planned for completion by the water company not later than five years from the date of such filing that meets the requirements for an eligible project and adheres to the criteria set forth in subdivision (2) of this subsection.

(2) Criteria for any such project shall include, but not be limited to, (A) compliance with applicable state or federal drinking water quality standards or other standards met by such project; (B) the nature and extent of water treatment required to meet such water quality standards; and (C) water source development, system consolidation, treatment or other acceptable means necessary to comply with action levels determined by the Commissioner of Public Health or applicable state or federal water quality standards for PFAS, lead or other contaminants.

(d) The authority shall approve a water company's request for approval filed pursuant to subsection (c) of this section and such company's water quality and treatment assessment report upon a determination that such company has demonstrated (1) the infrastructure projects considered for renewal or replacement are eligible projects; (2) the projects considered for addition, upgrade, improvement or replacement provide public health benefits by improving water quality for customers; and (3) the projects adhere to the criteria specified in subsection (c) of this section for determining priority for eligible projects. The authority may hold a hearing to solicit input on a water company's water quality and treatment assessment report, provided the authority's decision on the assessment is made not later than one hundred eighty days after the company files the water quality and treatment assessment report with the authority.

(e) (1) Such water quality and treatment surcharge shall be calculated as a percentage based on the actual cost of an eligible project as authorized by the authority multiplied by the applicable rate of return as approved in the water company's most recent general rate case proceeding, plus associated income tax, depreciation and property tax expenses related to eligible projects and any reconciliation adjustment calculated pursuant to subsection (h) of this section as a percentage of the retail water revenues approved in the water company's most recent general rate case proceeding pursuant to section 16-19 or 16-19a.

(2) Any such water company may apply the water quality and treatment surcharge approved by the authority for an eligible project as a charge on customer bills at intervals of not less than twelve months, commencing on either January first, April first, July first or October first in any year.

(f) (1) No proposed water quality and treatment surcharge shall become effective unless the authority has approved (A) the water quality and treatment assessment report concerning such proposed surcharge pursuant to subsection (d) of this section, and (B) the amount of such surcharge in an administrative proceeding. The administrative proceeding shall be completed and a decision shall be rendered by the authority not later than sixty days after a water company files an application to approve such surcharge.

(2) In connection with such administrative proceeding, the water company shall provide the authority with an updated water quality and treatment assessment report along with its filing for a water quality and treatment surcharge that details any significant changes in the extent of capital spending on water quality projects planned to be completed within the ten years following the date of such filing. The water company shall also provide a detailed capital spending plan to the authority for each such eligible project for the three years following the date of such filing.

(3) The authority shall receive and consider comments of interested persons and members of the public at the administrative proceeding, which shall not be considered a contested case for purposes of chapter 54, this section or any provision of the regulations of Connecticut state agencies. Any approval or denial of the authority pursuant to this subsection shall not be deemed an order, authorization or decision of the authority for purposes of section 16-35.

(g) The amount of any such water quality and treatment surcharge charged between general rate case filings shall not exceed fifteen per cent of the water company's annual retail water revenues approved in its most recent rate filing, and shall not exceed seven and one-half per cent of such revenues for any twelve-month period. The amount of the adjustment for any eligible project shall be included in new base rates and the surcharge shall be reset to zero as of the effective date of new base rates approved pursuant to section 16-19 or 16-19a. If, after any adjustments pursuant to section 16-262y are made, the company exceeds the allowable rate of return for the rolling twelve-month period ending with the two most recent consecutive financial quarters, the authority shall allocate any excessive return in accordance with any earnings sharing mechanism applicable to the company's base rate revenues.

(h) On or before February twenty-eighth of each year, any such water company shall submit to the authority an annual reconciliation report for any water quality and treatment surcharge applied to customer rates through December thirty-first of the previous calendar year. Such reconciliation report shall identify the costs incurred on any eligible project, demonstrate that the water quality and treatment surcharge is limited to eligible projects and include any other information required by the authority. In addition, the reconciliation report shall compare the water quality and treatment surcharge revenues actually collected to the applicable authorized water quality and treatment revenue requirement. If, upon completion of the review of the annual reconciliation report the authority determines that such water company overcollected or undercollected a water quality and treatment surcharge, the difference between the revenues actually collected and the applicable authorized water quality and treatment surcharge revenue requirement shall be recovered or refunded, as appropriate, as a reconciliation adjustment over a one-year period commencing on April first. Any such water company shall refund its customers with carrying costs calculated at the water company's authorized overall rate of return, as determined in its most recent general rate proceeding, for any such overcollection. No such water company shall recover any carrying costs for any undercollection.

(i) Each water company shall notify customers through a bill insert or other direct communication when a water quality and treatment surcharge is first applied. Such water quality and treatment surcharge shall appear as a separate item on customer bills.

(P.A. 25-142, S. 1.)

History: P.A. 25-142 effective July 1, 2025.

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