A final integrated resource plan from the Connecticut Department of Energy And Environmental Protection calls for state-run procurements to reduce winter price volatility

In the final IRP, the Department, to address natural gas constraints and electric market pricing impacts, "proposes to (1) utilize existing state authority under Public Act 13-303 to solicit Class I and/or large-scale hydropower that can offset some amount of natural gas demand, and (2) seek new authority from the legislature to run a competitive procurement open to a broad range of resources (including Liquefied Natural Gas (LNG) and gas pipeline capacity; transmission for large-scale hydropower or Class I renewables; and demand response, energy efficiency, and combined heat and power) that can cost-effectively resolve the gas infrastructure constraint, up to an amount that is proportional to Connecticut's share of regional electric demand."

The IRP notes that the Department has existing statutory authority to issue a solicitation for long-term power purchase agreements (PPAs) for up to 5% of the state's electricity demand under Section 7 of Public Act 13-303. This Section 7 solicitation must be open to bids from both large-scale hydropower and Class I resources as prescribed by statute. This equates to approximately 175 MW of large-scale hydropower at a 90% capacity factor, or 450 MW of wind at a 35% capacity factor. In addition, the Department has authority remaining under Section 6 of Public Act 13-303 to solicit long-term PPAs for up to approximately 125 GWh/year of Class I renewables. In total, the amounts DEEP can solicit utilizing existing statutory authority represents about 1,500 GWh/year.

"This amount is insufficient to fully resolve the region's gas infrastructure constraints, but could incrementally reduce the high winter energy prices caused by the constraints on gas fired generation during the winter peak hours; reduce greenhouse gas emissions; and provide a hedge against fuel price fluctuations in the energy markets," the IRP states

The IRP also forecasts that capacity costs, in the long-term will contribute 4.0¢/kWh to retail rates, compared to 2.2¢/kWh in 2017/18 and roughly half that in 2014.

"If conditions tighten in the future and subsequent auctions do not attract new capacity when needed, DEEP may pursue options within state authority to procure capacity resources to mitigate adverse reliability and economic consequences," the IRP provides.

The IRP also proposes that, if FERC is found to lack jurisdiction over demand response, Connecticut should revive and improve state programs that support demand response.

DEEP also recommends continuing to refine and extend programs to support in-state Class I renewable generation.

Link to the final IRP