Published September 20. 2013 12:00PM Updated September 21. 2013 12:11AM
Forecasting cheaper and more reliable power for state residents, Gov. Dannel P. Malloy announced Friday the approval of two clean-energy projects, including a solar center in Sprague and Lisbon on property largely owned by Fusion Paperboard Co.
The projects, which also include a wind farm in Maine, are expected to supply more than 3 percent of the state's energy needs when they are fully functional.
"The selection of these two projects is a major milestone in implementing our comprehensive energy strategy," Malloy said in a statement. "This announcement is truly a historic moment in Connecticut's energy history."
It's also a big disappointment for business people and local officials who had hitched their hopes on any one the 47 projects that were under consideration for state backing. The proposals that failed to win approval included NRG Energy's bid for a $100 million biomass project in Montville that could have brought up to 200 permanent jobs to the region.
"I'm disappointed that the NRG proposal did not make it through the first round," Montville Mayor Ronald K. McDaniel said in a phone interview after the decision.
McDaniel said he was glad that eastern Connecticut was able to secure one of the two projects, but questioned the wisdom of sending a large percentage of the renewable-energy generation out of state.
"I would have liked to have seen the projects be more locally oriented," he said.
A representative for the company planning the Fusion project did not return a call seeking more information about the economic impact of its proposal. State officials said local economic impact was not taken into consideration in the state's approval of the two proposals.
But state Sen. Cathy Osten, D-Sprague, applauded the state's move to support a massive solar installation in eastern Connecticut.
"It's great that Connecticut is investing more and more in green technology," Osten said in a statement. "When this is done, I look forward to having one of the largest solar installations east of the Mississippi River right here in Lisbon and Sprague."
Other projects that failed to make the grade locally included three separate solar initiatives proposed in Bozrah, Lebanon and Franklin by New York-based Allco Finance. Solar projects proposed in Canterbury by Con Edison Development of Valhalla, N.Y., and in East Haddam by Nautilus Solar Energy of Summit, N.J., also did not win state backing.
The major power distributors, Connecticut Light & Power and United Illuminating, have contracted to buy the energy that will be generated. The two projects that gained traction offered an average price of under 8 cents a kilowatt hour, said Department of Energy and Environmental Protection spokesman Dennis Schain in an email. This compares with an average price for all proposals of 12.8 cents a kilowatt hour, with a high of over 20 cents, he said.
Virginia-based HelioSage Energy will develop the Fusion Solar Center on a 145-acre site spanning Sprague and Lisbon using a 20-megawatt-per-hour solar photovoltaic system. Dan Esty, commissioner of DEEP, said the center represents one of the biggest solar projects undertaken in the eastern United States.
But its energy output is less than one-tenth what the state will receive from the 250-megawatt-per-hour Number Nine Wind Farm in Aroostook County, Maine, run by EDP Renewables North America LLC. The wind farm, not replicable on the same scale anywhere in Connecticut, offers state consumers extremely low prices, Esty said.
DEEP officials would not release energy-price numbers for each of the projects Friday, but promised to do so in the near future. They also would not say whether the winning proposals represented the top two rated projects, promising to be more transparent when the plans are submitted to the state Public Utilities Regulatory Authority for final approval.
"The pricing offered by these projects demonstrates that Connecticut's new approach to clean energy can spark innovation and competition among various technologies and drive down costs," Esty said in a statement.
Both of the projects should be up and running by 2016. The Maine wind farm would offer renewable energy at a relatively fixed price for 15 years, while the in-state solar farm has signed a 20-year agreement at a flat rate.
The prices were some of the lowest ever obtained in the region for solar and wind power, according to Schain. The cost was very close to prices paid for conventional fossil fuels, he said.
Given the flat rates and long term of the contracts announced Friday, renewable energy could be saving Connecticut consumers money in the long run if the cost of fossil fuels continues to rise, officials said.
"The prices exceeded our expectations," Esty said in a teleconference.
Connecticut is under a federal mandate to reduce its dependence on fossil fuels. By 2020, the state must find resources to serve at least 20 percent of its electrical needs through alternative energy.
Officials said the next step in making the state less dependent on fossil fuels would be a request for proposals issued this fall seeking biomass projects. Mayor McDaniel said this could be a chance to resurrect the NRG proposal in Montville, which had called for converting the natural gas and oil-burning plant to use clean wood as its main fuel source.
NRG has said in the past that energy generation using natural gas is in a down cycle and that it might have to close the Montville plant if it can't convert operations to a new model.
The state legislature passed a law in June, and DEEP put out a request for proposal in July, seeking bids on renewable-energy projects. A decision on the winning bids was based 80 percent on price, 15 percent on reliability and 5 percent on viability, officials said.
"We estimate savings of more than $200 million for our ratepayers over the life of the long-term contracts ... compared to the rate impacts that would have resulted by having the electric distribution companies purchase the clean energy ... on the open, spot market," Schain said in an email.