Connecticut regulators reject Enron fuel cell proposal

By the OGJ Online Staff

HOUSTON, Sept. 13, 2001 – Connecticut state regulators Tuesday rejected a proposal by Enron Corp. and the Connecticut Resources Recovery Authority to spend $124 million from electric distribution companies’ conservation budgets on a fuel cell project.

In a preliminary decision, the Department of Public Utility Control concluded neither the cost nor the success of the project is certain, and Houston-based Enron testified it wasn’t interested in risking shareholders’ money on the venture. Instead, ratepayers would be asked to bear all the risk without reasonable guarantees from either the manufacturer or the project developer, commissioners said.

The Connecticut Resources Recovery Authority (CRRA) and Enron proposed receiving a total of $124 million over 5 years from the conservation and load management budgets of Connecticut Light & Power Co. and the United Illuminating Co.

The proposal was for 12 fuel cells capable of producing 26 Mw of electricity. Commissioners said they agreed with CRRA that fuel cells are a highly efficient and environmentally friendly method of producing electricity. Technology allows fuel cells to produce electricity using natural gas, methanol, ethanol, biogas, and other fuels containing hydrogen.

Additionally, the regulators noted CRRA did not present its project to the Energy Conservation Management Board, which is responsible for evaluation of projects for possible inclusion in the conservation and load management budgets.

Instead, the department recommended sponsors should seek funding from the Renewable Energy Investment Fund. The draft decision approved numerous conservation and load management programs for CL&P and UI. Each company has had programs, in various forms, in place for many years. Their budgets were set by the PUC on an annual basis and incorporated into the companies’ rates.

With restructuring, spending for these projects is listed as a line item. During 2000, the first year under electric restructuring, CL&P spent nearly $69 million and UI nearly $17 million on conservation and load management.

The panel of commissioners assigned to the project is expected to issue a final decision Sept.19.

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