(a) Commencing on January 1, 2012, and within one hundred eighty days, each electric distribution company shall solicit and file with the Public Utilities Regulatory Authority for its approval one or more fifteen-year power purchase contracts with owners or developers of generation projects that are less than two megawatts in size, located on the customer side of the revenue meter, serve the distribution system of the electric distribution company, and use Class I technologies that have no emissions of no more than 0.07 pounds per megawatt-hour of nitrogen oxides, 0.10 pounds per megawatt-hour of carbon monoxide, 0.02 pounds per megawatt-hour of volatile organic compounds, and one grain per one hundred standard cubic feet. The authority may give a preference to contracts for technologies manufactured, researched or developed in the state.

(b) Solicitations conducted by the electric distribution company shall be for the purchase of renewable energy credits produced by eligible customer-sited generating projects over the duration of the contract.

(c) (1) The aggregate procurement of renewable energy credits by electric distribution companies pursuant to this section shall (A) be up to four million dollars in year one, and (B) increase by up to an additional four million dollars per year in years two and three. After year three, the authority shall review the contracts entered into pursuant to this section and if the cost of the technologies eligible for such contracts have been reduced, the authority shall seek to enter new contracts for the total of five years.

(2) If the authority determines that the cost of such technologies have been reduced, the authority shall seek to enter new contracts for a total of five years. The aggregate procurement of renewable energy credits pursuant to this subdivision shall (A) increase by an additional four million dollars per year in years four and five, (B) be twenty million dollars per year in years six through fifteen, and (C) decline by four million dollars per year in years sixteen through twenty.

(3) If the authority determines that such costs have not been reduced, the aggregate procurement of renewable energy credits pursuant to subdivision (1) of this subsection shall (A) be twelve million dollars per year in years four through fifteen, and (B) decline by four million dollars per year in years sixteen through eighteen.

(4) Any money not allocated in any given year may roll into the next year’s available funds. The production of a megawatt hour of electricity from a Class I renewable energy source first placed in service on or after July 1, 2011, shall create one renewable energy credit. A renewable energy credit shall have an effective life covering the year in which the credit was created and the following calendar year. The obligation to purchase renewable energy credits shall be apportioned to electric distribution companies based on their respective distribution system loads at the commencement of the procurement period, as determined by the authority. An electric distribution company shall not be required to enter into a contract that provides a payment of more than two hundred dollars per megawatt hour over the term of the contract.

(d) Notwithstanding subdivision (1) of subsection (h) of § 16-244c, an electric distribution company may retire the renewable energy credits it procures through long-term contracting to satisfy its obligation pursuant to § 16-245a.

(e) Nothing in this section shall preclude the resale or other disposition of energy or associated renewable energy credits purchased by the electric distribution company, provided the distribution company shall net the cost of payments made to projects under the contracts against the proceeds of the sale of energy or renewable energy credits and the difference shall be credited or charged to distribution customers through a reconciling component of electric rates as determined by the authority that is nonbypassable when switching electric suppliers.