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Connecticut energy commissioner sued over $1B Maine wind contract

A New York solar company has sued Department of Energy & Environmental Protection Commissioner Daniel Esty over what it argues was an invalid process that led to the awarding of more than $1 billion worth of wholesale renewable energy contracts in September.

Allco Finance Ltd. was one of a number of companies that submitted proposals to state regulators this year hoping to win a contract to build a renewable energy installation. The company’s proposals for solar facilities in Lebanon, Harwington, Bozrah and Waterbury were ultimately not selected.

Esty ultimately awarded contracts to a 250 megawatt wind farm in Maine and a 20 megawatt solar center in Lisbon. Esty said he picked those because, among other reasons, the combined cost of the electricity from those installations was less an eight cents per kilowatt hour, a expense lowered by the size of the wind farm.

Allco argued in its complaint to U.S. District Court in New Haven that Esty violated the U.S. Constitution and the federal Public Utility Regulatory Policies Act (PURPA) in establishing a fixed price for wholesale electricity. That right belongs exclusively to the Federal Energy Regulatory Commission, the company said in its lawsuit.

The company argued that a 250-megawatt wind farm in Maine called Number Nine Wind Farm, which was awarded a contract, doesn’t qualify under PURPA the program because it’s too large. PURPA was designed to encourage development of 80-megawatt and under projects, the suit said.

Allco also argued that a 20-megawatt solar farm in Lisbon called Fusion Solar Center, which also won a contract, does not qualify because state regulators didn’t evaluate the pricing to determine if it reflected the utilities’ avoided costs, which Allco said also violates PURPA.

Dwayne Gardner, a spokesman for DEEP, said in an email that the agency couldn’t comment on pending litigation, but said the agency believes the lawsuit has no 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. 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,” Gardner wrote in an email.