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Solar Company Sues State Over Renewable Energy Contracts

by Christine Stuart | Dec 26, 2013 9:51am
(3) Comments | Commenting has expired
Posted to: Courts, Energy, Environment, Legal

Doug Hardy file photo

DEEP Commissioner Daniel C. Esty and Iron Mountain Director of Corporate Responsibility and Sustainability Samantha Joseph prepare to cut the ribbon on an unrelated 902-panel solar array in Windsor on Oct. 2, 2013

A solar company is suing Department of Energy and Environmental Protection in federal court for the way in which it awarded renewable energy purchase agreements.

Allco Finance Limited filed a lawsuit against the DEEP and its Commissioner Daniel C. Esty last week alleging the contracts for renewable power it signed with a 250 megawatt wind project in Maine and a 20 megawatt solar project in Connecticut violated the Federal Power Act and the Supremacy clause of the U.S. Constitution.

The two projects will provide 3.5 percent of Connecticut’s total energy load. That will get the state one-fifth of the way to its renewable energy goal of 20 percent by 2020.

Allco Finance Limited wanted to build solar farms in Bozrah, Lebanon, Franklin, and Harwinton and was one of a few dozen companies that submitted proposals considered by the state under newly passed legislation that outlines the state’s renewable energy goals. The legislation allowed Esty to direct the utility companies to enter into agreements with generators to purchase power from renewable sources.

Allco planned to generate up to 80 megawatts of power at five facilities in Connecticut. It already operates solar farms in Indiana and would look to lease or purchase land in southeastern Connecticut for this project. The price offered by Allco “was less than the price offered by the Fusion Solar Project,” the complaint says.

According to a Sept. 20 press release, the projects were scored and ranked in three categories, with the most significant being price.

Allco claims in its lawsuit that no determination was made by the state that the wholesale prices in the purchase agreement were “equal to the Connecticut Utilities’ avoided costs.” It claims that under the Federal Power Act only the Federal Energy Regulatory Commission has the right to regulate wholesale power prices.

Allco claims that the contract “intrudes on FERC’s exclusive jurisdiction to regulate wholesale transactions for capacity and energy. The order sets the price at which Connecticut Utilities would purchase energy from Number Nine Wind Project and the Fusion Solar Project. “

The lawsuit further argues that the Number Nine Wind Project in Maine is not a qualifying facility because it is 250 megawatts, which is in excess of the 80 megawatt permit size for a qualifying facility.

It says the public will be harmed because the awarding of the contract undermines “Congress’ choice to encourage small power production facilities.”

The Attorney General’s office, which is defending the state in the lawsuit declined comment.

“We will review this complaint and respond at the appropriate time in court,” Jaclyn Falkowski, a spokesman for the attorney general’s office, said.

A spokesman for the Department of Energy and Environmental Protection said they also won’t comment on pending litigation “other than to say we do not believe the lawsuit has any legal merit.”

“DEEP worked closely with the Attorney General’s Office, the Office of Consumer Counsel, and outside legal resources to ensure the process was conducted to the full letter of the law,” Dwayne Gardner, a DEEP spokesman, said. “We believe this procurement will meet the state’s goal of bringing cheaper, cleaner, and more reliable energy to the residents and businesses of Connecticut.”

Allco is seeking injunctive relief barring implementation of the purchase agreements.

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(3) Comments

posted by: Not that Michael Brown | December 26, 2013  12:42pm

Is the Allco Finance Limited a reformed version of Allco Finance Group, an Australian company that went bankrupt in 2008?

posted by: ocoandasoc | December 26, 2013  2:03pm

I don’t know how this lawsuit will wind up. But I do know that this whole renewable energy purchase deal was a sham. For example… Did you know that of the 250 megawatts this Connecticut taxpayer funded wind project will generate not a single watt will actually power anything in Connecticut?  Or that the 20 megawatts the taxpayer-subsidized solar project will hopefully output will – under the most optimistic of predictions –produce power at a cost three times higher than what the State will receive back when they sell the power to the grid? It’s all smoke and mirrors, folks, so some politicians can say they have met a meaningless renewable energy goal when they campaign for reelection.

posted by: StanMuzyk | December 26, 2013  5:12pm

Our federal government already lost billions of dollars in financing a losing solar energy project in California—that never got off the ground.