Innovation

In 2007, the Connecticut State Legislature addressed a number of issues that had developed in the energy marketplace including the need for new peaking generation. The legislation directed electric distribution companies and allowed merchant generators to create long-term cost-of-service solutions to meet this critical Connecticut energy requirement.

Working with NRG Energy (NRG), a preeminent national developer and operator of power generation facilities, was a natural fit for UI. It matched generation expertise with UI’s focus on delivering value for customers. Both companies are respected industry leaders with a commitment to service and believe that their proposal is the most innovative energy action since electric restructuring arrived in Connecticut in 1998. If approved by the Department of Public Utility Control (DPUC), the UI and NRG team could have the new cost-of-service peaking generation capacity in operation by the summer of 2010. Beyond a statewide improvement in reliability, UI and NRG believe that the proposal brings with it a structure that may be used in other contexts with the ability to help stabilize prices for Connecticut ratepayers in the long term.

The UI and NRG proposal is clear and straightforward. The operating entity will be GenConn Energy LLC (GenConn), a 50/50 joint venture limited liability company of UI and NRG. Under contract to GenConn, UI will provide all of the regulatory and financial management associated with GenConn’s operation. Similarly, NRG will provide the facility and all operational services. The cost of building and operating the facility, including the process of offering its products into the wholesale market as well as how it gets paid, will be prescribed based on cost-of-service principles and approved by the DPUC.

Project awards are scheduled to be made by the DPUC by July 2008.