Connecticut regulators plan to launch a request for proposals to obtain additional power from generation, demand-side reduction, conservation and energy efficiency projects in the state.

The new capacity is intended to reduce the impact of federally mandated congestion charges in Connecticut. The Department of Public Utility Control, which had given preliminary approval for the RFP, issued a final decision on Sept. 13. The RFP will be issued Sept. 15, the DPUC said.

Although a specific target has been set for the procurement process, the DPUC said it and other participants forecast Connecticut will need about 600 MW to 700 MW of new quick-start electric generating units or dispatchable demand response to meet electricity needs in 2007. In later years, the state will need more baseload generating capacity or conservation, ranging from 600 MW to 2,400 MW by 2021, to address growing load, the department said.

According to the DPUC, the request seeks bids from new resources or existing resources willing to make additions or refurbishments. Contracts stemming from the RFP will be for new capacity for up to 15-year terms.

"The objective of the RFP is to: 1) motivate the development of new supply and demand resources in the state in order to proactively hedge against rising electricity costs resulting from expected regional and state-wide shortages in electric generation capacity in the longer term, 2) reduce pollution from older, less efficient plants and 3) diversify the resources that Connecticut has to rely on to meet its electricity needs in the future," the DPUC said.

The department noted that winning bidders will sign a contract that consists of a "financial two-way contract" requiring that distribution companies true-up the supplier to their contract price if the market price in ISO New England Inc.'s forward capacity market is lower than the contract price. However, if the market price in the forward capacity market is higher than the contract price, the supplier would pay the distribution company the difference. Bidders will have an option for the contract to also settle against the locational forward reserve market and if the bidder chooses the energy hedge, the contract will settle against the day-ahead energy market, the DPUC said.

Final bids are due Dec. 13, with winning projects likely announced no later than spring of 2007. The department said proposals will be evaluated on a cost-benefit basis to ensure that the portfolio of projects chosen brings a positive anticipated net benefit to customers.

The DPUC noted that 15% of the total bid score will be based on policy priorities such as improving the quality of Connecticut's environment, reliability of the electricity delivery system and making effective use of existing generation, transmission and fuel supply infrastructure.

The RFP's Web site, www.Connecticut2006RFP.com, will come online at 12:01 a.m. Sept. 15, the DPUC said.