A New York company has sued Connecticut’s utility regulator, arguing that a 2025 law meant to lower electric bills has instead locked it out of the state’s renewable energy market, which could push costs higher for consumers.
Hartree Partners Limited Partnership, backed by Los Angeles-based global investment firm Oaktree Capital Management, filed the lawsuit in Hartford Superior Court after regulators decided to strip Class I certification from its four biomass power plants in Massachusetts and New Hampshire.
Biomass facilities, which generate electricity by burning plant-based materials such as wood waste, had qualified as Class I sources in Connecticut for decades.
Class I is the state’s highest-tier renewable energy designation, and the credits tied to those sources count toward Connecticut’s clean energy requirements. Generators earn one renewable energy credit, or REC, for each megawatt-hour of electricity produced.
Electric suppliers and utilities are legally required to purchase RECs in increasing amounts each year to comply with the state’s renewable energy standards.
Sources that qualify include solar, wind, fuel cells and — until April 8 — biomass.
Without Class I status, companies like Hartree that operate out-of-state biomass facilities cannot sell RECs in Connecticut.
The issue stems from Public Act 25-173, a high-profile energy affordability law signed by Gov. Ned Lamont last July.
Lawmakers promoted the bill as a way to save ratepayers at least $300 million over two years. But one provision — Section 36 — rewrote the definition of a Class I renewable source.
Under the new language, biomass plants qualify only if they had a contract to sell power directly to a Connecticut utility before Oct. 1, 2025.
Hartree argues the change unlawfully voids existing contracts and discriminates against out-of-state companies. The company also says the policy could backfire by tightening the supply of renewable credits and driving up prices.
Hartree sued the Public Utilities Regulatory Authority on Sept. 30, after the agency declined to issue a declaratory judgment clarifying whether its plants could continue selling RECs under existing agreements.
Based on PURA’s revocation order, 24 out-of-state biomass facilities, including those owned by Hartree, are set to lose their Class I certifications on April 8.
Before state lawmakers introduced the change, Hartree had signed contracts to deliver about 595,000 RECs through 2027 to major energy suppliers, according to the complaint.
Now, Hartree says it must either default on its existing contracts or buy replacement credits on the open market at higher prices.
Under the new law, nearly all biomass facilities are excluded from selling RECs in Connecticut except Plainfield Renewable Energy, a 37.5-megawatt wood-fired plant in the northeastern Connecticut town.
The facility, which has been operating since 2013, sells the majority of its electricity to an Eversource subsidiary under a long-term power purchase agreement.
Hartree argues the law violates the U.S. Constitution in two ways.
First, it cites the contracts clause, which bars states from interfering with existing agreements. Second, it points to the dormant commerce clause, which limits states from favoring in-state businesses over out-of-state competitors.
The lawsuit also challenges the law’s economic logic.
Connecticut already faces a shortage of Class I RECs. Regulators reported a gap of more than 565,000 credits for the 2023 compliance year, and the state’s clean energy targets continue to rise, the complaint states.
By shrinking the pool of eligible suppliers, Hartree argues the law could push up the cost of renewable energy credits — ultimately passing the cost on to ratepayers.
Hartree also warns of broader market effects. If long-term contracts can be undone by last-minute legislative changes, suppliers may be less willing to sign future deals, which would reduce price stability over time.
Regulators have pushed back, arguing the company should have anticipated the policy shift and that the state has the authority to reshape its clean energy program.
Both sides sought summary judgment. On March 13, a Hartford Superior Court judge denied those motions, finding the case raises unresolved legal questions that require a trial.
The court said Hartree showed its contracts may have been significantly impaired, but stopped short of ruling on whether the law serves a valid public purpose.
PURA declined to comment and an attorney representing Hartree did not respond to a request for comment.
