High Upgrade Costs Threaten Solar Project in Windham

Francisco Uranga

WINDHAM — The developer of a solar project at a former Windham landfill is threatening to scrap the project after discovering that required substation upgrades would cost 13 times more than the project itself.

Verogy CEO William Herchel told CT Examiner that the company predicted a $2 million investment in the project. But Eversource, the electric company serving Windham, determined that substation upgrades would cost $26 million.

“Eversource understood that it would effectively stop or shutter the potential for that deal to come to fruition,” he said. “This is the largest cost I’ve ever seen for a distribution-level project.”

The problem lies in Connecticut rules that require developers to pay the full upgrade cost to enable interconnection. Developers, utilities, regulators and consumer advocates have warned that this model could stall the expansion of distributed solar generation in the state, considered key to achieving a zero-carbon grid by 2040. 

Rule changes are still being debated, with parties divided on how to share the costs between generators and ratepayers.

Verogy’s project in Windham — selected in February 2024 as part of the state’s Non-Residential Energy Solutions, which provides tariffs to compensate solar generators — is a relatively small one, meant to supply the town hall and other municipal facilities. The project boasts a $161.74 per megawatt-hour price tag — 50% more than Eversource’s standard service supply rate for small businesses. The costs would be transferred to all Eversource ratepayers through the public benefits component of the bill.

Herchel said Verogy would most likely withdraw its application and wait either until the rules were changed or someone else paid for the upgrade. 

Alternatively, the utility can choose to invest the money and pass the cost to ratepayers through a PURA-approved rate case. But Herchel said this process can take years, encouraging delays and slowing necessary upgrades for solar expansion.

“If that were to be the solution, then no distributed generation is being put on the grid,” he said. “Windham is not going to be a beneficiary of this individual project in the timeframe that they want and 100% of the upgrade costs pertaining to that substation will be borne by the ratepayers, which is not an ideal outcome.”

Andrew Belden, Eversource vice president of solar programs, told CT Examiner that the infrastructure limits were a consequence of the rapid increase in solar projects connecting to the distribution grid. 

Connecticut has expanded its solar capacity over the past decade. Last December, the state produced almost 1.3 gigawatts of power from more than 100,000 small solar farms, according to data from ISO-New England. It is equivalent to about 65% of the Millstone plant’s nuclear energy output.

New cost-sharing mechanism

In mid-January, PURA published a draft decision proposing a third option for sharing infrastructure upgrade costs, called the group study process. 

This model lets solar generators like Verogy share costs. Each pays a fee based on kilowatt capacity, covering part of the expense. Future generators and utility customers would cover the rest through rate cases.

Not all stakeholders were supportive of the proposal.

Eversource and United Illuminating criticized the proposal in a joint comment to PURA, arguing that it left utilities as the “bank” for financing grid improvements, forcing them to wait years to be reimbursed for investments “compelled by the state’s policy goals.” The utilities requested a special annual mechanism to recover the costs without going through the rate case process.

Rate cases have been a source of tension between utilities and regulators since Marissa Gillett became PURA chair in 2019. Utility companies say her changes hurt their credit ratings, while supporters say she’s just holding them accountable. The companies also said that uncertainty about when and how much they would recover in costs discourages investments to expand solar infrastructure in the state. 

Verogy has asked for a $500 per kilowatt cap on interconnection fees to provide cost certainty for developers and promote solar energy expansion — the same limit Massachusetts adopted when facing a similar issue.

“The reason they’re able to impose that cap is that they were looking forward, beyond just a group of projects that are submitted today, and understand that there will be more to come in and pay over time,” Herchel said, noting the growing demand for heat pumps and electric vehicle chargers.

In May 2024, PURA proposed limiting ratepayers’ share of infrastructure upgrade costs to 25%, with generators covering the rest. In August, it also proposed an annual cost-recovery mechanism that charges ratepayers for upgrade costs each year, instead of relying on rate cases, which are reviewed every four years.

This year’s draft decision removed both proposals.

Consumer Counsel Claire Coleman told CT Examiner she considered the draft decision a good proposal, despite the elimination of the cap on how much ratepayers could be charged for infrastructure upgrades. 

“We have suggested various protections for customers to make sure that they are not incurring any more risk or cost than we can directly attribute to the benefits they’re receiving,” she said. “Some consumer protections we advocated for along the way have been adopted.”

Thomas Wiehl, legal and regulatory director of the Office of Consumer Counsel, said the agency opposed the special annual cost recovery mechanism because of the risk of unfairly charging ratepayers for infrastructure upgrades. 

Wiehl said the infrastructure upgrade cost could be recovered in a rate case just like other capital investments. The Office of Consumer Counsel also recommended creating a new rate class for solar generators to allocate costs to them on an ongoing basis.

“We have a process to do this in a rate case,” Wiehl said. “We recommend using the tools that we have.”

PURA postponed its decision until Feb. 19.

Osten backing economic study of area served by Mohegan-Pequot Bridge

Brian Hallenbeck

State Sen. Cathy Osten, D-Sprague, has said she will continue to advocate for a bill calling for an economic study of the area surrounding the Mohegan-Pequot Bridge despite the public-hearing testimony of two state commissioners who suggested last week that a pending transportation study should come first.

Daniel O'Keefe and Garrett Eucalitto, commissioners of the Departments of Economic and Community Development and Transportation, respectively, told the legislature’s Transportation Committee that the DOT is embarking on a “transportation corridor study” in the same geographic region described in Senate Bill 1081.

“DECD would encourage the committee to await the results of that (DOT) study to inform decision making around the Mohegan-Pequot Bridge capacity,” O’Keefe wrote in testimony filed in connection with the Feb. 10 public hearing.

“I’m not willing to stop the bill from moving forward,” Osten, a Transportation Committee member, said Monday. “They’re hiring consultants to look at economics and traffic projects. My intent is to still have that bill come out of committee to make sure it (an economic study) happens. ... Let’s make sure it happens.”

The bill's 10 co-sponsors include Osten and eight other members of the southeastern Connecticut delegation.

It would require O'Keefe and Eucalitto to jointly conduct or commission an economic study of areas in Montville and Preston to determine whether the capacity of the Mohegan-Pequot Bridge adequately serves them. The proposed study would assess whether the bridge “permits the convenient, safe and expeditious flow of traffic” to the areas and the extent to which the bridge’s capacity will be affected by developments on the Mashantucket Pequot reservation and elsewhere.

Great Wolf Lodge at Mashantucket, a $300 million indoor waterpark resort set to open in May adjacent to Foxwoods Resort Casino and the Mohegan Tribe’s proposed Preston Riverwalk project are among those developments, as is an expansion of the Preston incinerator site.

“The area is a true asset, and it is imperative that we ensure that our infrastructure is sufficiently up to the task of dealing with the various projects and developments in the area,” Osten said in her public hearing testimony.

Senate Bill 1081 also seeks an evaluation of the impact on the Mohegan-Pequot Bridge of oversized loads that could be prohibited from traversing the Gold Star Memorial Bridge between Groton and New London. Traffic could be similarly diverted in the event of a public safety incident that caused the DOT to shut down the Gold Star, according to the bill.

Meanwhile, the DOT is planning to undertake a $32.8 million renovation of the Mohegan-Pequot Bridge. Local officials and residents have expressed opinions about the plan, with some saying the improvements to the bridge should include widening it from two to four lanes.

Such an undertaking would be six to seven times costlier than repairs, according to estimates.

Danbury streetscape project gets boost with a $4 million state grant: 'An incredible win'

Michael Gagne

DANBURY — City leaders’ ongoing plans to improve downtown’s walkability, appearance and economic viability received a recent boost with a $4 million state grant. 

The new funds will support the $17 million Streetscape Renaissance Project, which calls for redesigned sidewalks and roadway improvements as well as other enhancements like landscape improvements in areas like the intersection of Main, West and Liberty streets. In addition to new sidewalks, the city could see landscape improvements like new tree plantings to replace aging trees whose root systems are lifting and damaging sidewalks.

The new funding towards the effort comes from the state’s Local Transportation Capital Improvement Program, or LOTCIP. Such funds support municipal projects including streetscapes, sidewalks, pedestrian bridges, and traffic improvements. Danbury received its share through the Western Connecticut Council of Governments and the state Department of Transportation.

Mayor Roberto Alves hailed the new grant as “an incredible win for Danbury.” The grant comes as leaders pursue similar funds to complete the project.

“We are going to get it done in pieces. We are not going to take this from our general fund. That’s why we are partnering with WestCOG. It’s an incredible win for Danbury,” Alves said. 

Leaders are pursuing other state funds to ensure the streetscape project is fully funded. The city has a pending application seeking Connecticut Community Investment Fund monies.

“We are chasing money specifically designed for streetscapes,” Alves said.

City leaders hope the proposed improvements will yield long-term benefits.

A recent news release said that upgrades to downtown sidewalks, as well as lighting and roadway improvements, are ways that Danbury leaders “can better show investors, developers, current property owners and residents that we’re invested in our community.”

Alves said the city is now in the process of identifying trees to be removed and replaced with younger trees. 

The pursuit of new funding to continue the streetscape project dovetails with other efforts to transform downtown, like overhauling its downtown regulations. The Zoning Commission recently voted to support new regulations that doubles the downtown zone, and reduces height and parking restrictions.

Meanwhile, the city has also signed off on a downtown sewer capacity study. Alves said the capacity has gotten to a point where stormwater infiltration needs to be studied and where the system has stress points.

Alves said his administration will pursue grant funds to complete the study, just like it is with the sidewalk project.

Alves painted a vision to create a “vibrant, walkable Main Street,” informed largely by his ongoing conversations with downtown business owners, downtown leaders and with residents and patrons. 

The mayor said he wants to see more activity downtown. However, a complaint his administration has heard repeatedly from constituents is that downtown is lacking in amenities like parking.

Alves said his administration arrived at a simple solution toward that particular issue: improving signage directing downtown visitors to parking.

“We knew there was an opportunity there, with two parking garages,” Alves said. “We said, ‘Let’s work on signage.’ And we did that.”

Downtown is seeing some incremental growth and increased activity.

Alves cited Danbury Ice Arena’s new Spice City FC indoor soccer team as an example of a new attraction that could help downtown increase its viability. The team has gotten off to a promising start as a new family attraction. His hope is that the patrons coming downtown to see that team play as well as the Danbury Hat Tricks hockey team translate to more customers patronizing downtown businesses. Another upcoming attraction slated for downtown is the Danbury Diesel arena football team.

Alves is also hopeful that Ives Bank’s new downtown headquarters, now under construction, will draw in pedestrian traffic. 

“There will be foot traffic. We want to see restaurant traffic,” Alves said.