5.1

CT

United Illuminating (UI)

Electric

DER; CC

As part of the NWS Process approved by CT PURA, the intent of this shared savings mechanism is to incentivize electric distribution companies (EDCs) (which includes Eversource & United Illuminating) to identify and propose NWS that are more cost-effective than the EDC's investment bid. EDCs are eligible to keep 25% of the projected ratepayer financial net benefits, amortized over the average life of the NWS asset contract(s).

Reasonably projected ratepayer financial net benefits associated with NWS projects approved through the CT PURA NWS Process when compared to the EDC investment bids.

N/A

Upside

Shared net benefits/shared savings

If EDCs are successful in identifying NWS through the NWS Process, they are entitled to earn 25% of the savings amortized over the life of the NWS project (though the CT PURA is open to consider methodologies other than amortization to allocate shared savings between the customers and EDCs if the utilities, PURA Process Monitor, and/or stakeholders carry their burden of showing that another methodology more accurately reflects when savings will be realized for customers or provides greater net value to customers. Costs and benefits are to be calculated using the current BCA framework elements as recognized by the Department of Energy and Environmental Protection (DEEP), PURA, and the Connecticut Green Bank. The latest description of Conservation and Load Management (C&LM) Plan benefit-cost screening is contained in Chapter Three of the 2021 Plan Update. Among the benefits that are recognized for purposes of the primary utility cost test are: Electric energy savings and energy demand-reduction induced price effects (DRIPE); Electric wholesale generation capacity and capacity DRIPE; Avoided T&D costs in Connecticut based on 2017 studies from Eversource and UI; Avoided regional transmission costs from the ISO-NE Pooled Transmission Facilities tariff; and A monetized benefit estimate for reliability.

2025

N.D.

Inactive (Performance Period Upcoming)

In approving this incentive, CT PURA acknowledged that the substitution of electric distribution company ("EDC"), or utility, investments, which earn a rate of return, for contracts with competitive NWS resources, which are treated as an expense and do not earn a rate of return, runs contrary to the existing utility business model under current cost-of-service ratemaking practices. As such, PURA found it appropriate to create a mechanism to compensate EDCs for fairly engaging with the NWS Process and a direct method to encourage the EDCs to find solutions that save ratepayers money. Savings are to be recovered through the non-bypassable federally mandated congestion charge (NBFMCC) on an interim basis until those expenses are incorporated into base rates.