CCEF - Renewable Energy Projects in Pre-Development Program

March 22, 2007

Summary

The Connecticut Clean Energy Fund's (CCEF) Renewable Energy Projects in Pre-Development Program offers financing to encourage the development of renewable-energy projects in Connecticut or for renewable power production for the larger ISO New England wholesale electricity market. Activities supported may include site control, environmental assessments, facility design, grid interconnection analysis, development of commercial documents, and public outreach and education. Project developers that have performed preliminary feasibility studies at a specifically identified site may apply for as much as $250,000 for projects up to 5 megawatts (MW), as much as $500,000 for projects greater than 5 MW. Eligible renewable-energy resources include wind, solar, fuel cells, wave or tidal power, ocean thermal, low emission advanced biomass conversion technologies, and landfill gas resources. Program funding generally will take the form of unsecured loans with reasonable interest rates. The CCEF will consider alternative investment mechanisms, however, as appropriate to the project type and structure. All projects require a minimum cost share of 25% by the applicant, their partners and/or third-party finance sources. Project developers must agree to the following conditions:

• To sell at least 50% of all renewable-energy credits (RECs) attributable to the energy generated by the project for a 10-year period from the in-service date of the facility to the Connecticut market, or to participate in a long-term contract under CCEF's Project 100 Initiative (see description below) if qualified.
• To deliver more than 50% of the nameplate rated capacity and energy produced to the wholesale electricity market.

The Pre-Development Program seeks to reduce financial risk during the early stages to create a pipeline of Class I renewable-energy projects that could qualify for long-term power purchase contracts under CCEF's Project 100 Initiative. This initiative supports legislation enacted in June 2003 (P.A. 03-135) requiring the state's electric-distribution companies to enter into minimum 10-year contracts for at least 100 MW of Class I renewable capacity. Pricing under these contracts will include a premium of up to 5.5¢ per kWh. These long-term power purchase contracts must be filed with the Connecticut Department of Public Utilities by July 1, 2007, and must arise from projects that receive funding from the CCEF, among other criteria. Applications for the Pre-Development Program are accepting on a rolling basis.