HB 485 - FINAL VERSION
15jan98.....0188h
5/21/98 1786s
1998 SESSION
97-0976
03/10/02
HOUSE BILL 485
AN ACT relative to limited electrical energy producers.
SPONSORS: Rep. Below, Graf 13; Rep. J. Bradley, Carr 8
COMMITTEE: Science, Technology and Energy
AMENDED ANALYSIS
This bill provides for the buyout of public utility purchase obligations from limited electrical energy producers after competition is certified to exist. This bill also provides for net energy metering and agreements between eligible customer-generators and electric utilities. This bill also provides for additional selling authority by limited electrical energy producers and repeals the existing statute relative to buyout of existing rate orders.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
15jan98.....0188h
5/21/98 1786s
97-0976
03/10/02
STATE OF NEW HAMPSHIRE
In the Year of Our Lord One Thousand Nine Hundred and Ninety-Eight
AN ACT relative to limited electrical energy producers.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Limited Electrical Energy Producers Act; Declaration of Purpose. Amend RSA 362-A:1 to read as follows:
362-A:1 Declaration of Purpose. It is found to be in the public interest to provide for small scale and diversified sources of supplemental electrical power to lessen the state's dependence upon other sources which may, from time to time, be uncertain. It is also found to be in the public interest to encourage and support diversified electrical production that uses indigenous and renewable fuels and has beneficial impacts on the environment and public health. It is also found that these goals should be pursued in a competitive environment pursuant to the restructuring policy principles set forth in RSA 374-F:3. It is further found that net energy metering for eligible customer-generators may be one way to provide a reasonable opportunity for small customers to choose interconnected self generation, encourage private investment in renewable energy resources, stimulate in-state commercialization of innovative and beneficial new technology, enhance the future diversification of the state's energy resource mix, and reduce interconnection and administrative costs. However, due to uncertain cost and technical impacts to electric utilities and other ratepayers, the general court finds it appropriate to limit the availability of net energy metering to eligible customer-generators who are early adopters of small-scale renewable electric generating technologies.
2 New Paragraphs; Limited Electrical Energy Producers Act; Definitions; "Eligible Customer-Generator" Added. Amend RSA 362-A:1-a by inserting after paragraph II the following new paragraphs:
II-a. "Electricity suppliers" has the same meaning as in RSA 374-F:2, II.
II-b. "Eligible customer-generator" means an electric utility customer who owns and operates electrical generating facilities powered by solar, wind, and/or hydro energy with a total peak generating capacity of not more than 25 kilowatts that is located on the customer's premises, is interconnected and operates in parallel with the electric grid, and is intended primarily to offset part or all of the customer's own electricity requirements.
3 New Paragraph; Limited Electrical Energy Producers Act; Definitions; "Net Energy Metering" Added. Amend RSA 362-A:1-a by inserting after paragraph III the following new paragraph:
III-a. "Net energy metering" means measuring the difference between the electricity supplied over the electric distribution system and the electricity generated by an eligible customer-generator which is fed back into the electric distribution system over a billing period.
4 New Paragraph; Limited Electrical Energy Producers Act; Definitions; "Qualifying Facility" Added. Amend RSA 362-A:1-a by inserting after paragraph VII the following new paragraph:
VII-a. "Qualifying facility" means either or both of a qualifying small power production facility or qualifying cogeneration facility.
5 Limited Electrical Energy Producers Act; Purchase of Output by Private Sector; Additional Authority. Amend the introductory paragraph of RSA 362-A:2-a, I to read as follows:
I. A limited producer of electrical energy shall have the authority to sell its produced electrical energy to not more than 3 purchasers other than the franchise electric utility, unless additional authority to sell is otherwise allowed by statute or commission order. Such purchaser may be any individual, partnership, corporation, or association. The commission may authorize a limited producer, including eligible customer-generators, to sell electricity at retail, either directly or indirectly through an electricity supplier, within a limited geographic area where the purchasers of electricity from the limited producer shall not be charged a transmission tariff or rate for such sales if transmission facilities or capacity under federal jurisdiction are not used or needed for the transaction. The public utilities commission shall review and approve all contracts concerning a retail sale of electricity pursuant to this section. The public utilities commission shall not set the terms of such contracts but may disapprove any contract which in its judgment:
6 Limited Electrical Energy Producers Act; Purchase of Output by Public Utilities; New Purchases Not Required After Competition Certified. Amend RSA 362-A:3 to read as follows:
362-A:3 Purchase of Output of Limited Electrical Energy Producers by Public Utilities.
I. The entire output of electric energy of such limited electrical energy producers, if offered for sale to the electric utility, shall be purchased by the electric public utility which serves the franchise area in which the installations of such producers are located.
II. No purchases and related transactions involving qualifying facilities shall take place under RSA 362-A:3 or RSA 362-A:4 in any location where retail electric competition is certified to exist pursuant to RSA 38:36, unless such purchase or related transaction is pursuant to:
(a) Commission orders or agreements providing for qualifying facility power sales existing prior to such certification;
(b) Negotiated qualifying facility power purchase contracts existing prior to such certification; or
(c) Commission orders or agreements resulting from the renegotiation of orders, agreements, or contracts referenced in subparagraphs (a) and (b).
7 Limited Electrical Energy Producers Act; Payment by Public Utilities for Purchase of Output; Payments After Competition Certified. Amend RSA 362-A:4 to read as follows:
362-A:4 Payment by Public Utilities for Purchase of Output. Public utilities purchasing electrical energy in accordance with the provisions of this chapter shall pay rates per kilowatt hour to be set from time to time by the commission. Such rates shall be based on the purchasing utility's avoided costs. The commission may set long term rates which shall, at the option of the qualifying small power producer or qualifying cogenerator, be based on the purchasing utility's avoided costs either calculated for the time of delivery or calculated for a specified term at the time the qualifying small power producer or qualifying cogenerator agrees to be obligated to deliver for the specified term. Nothing in this section shall limit the authority of any electric utility or any qualifying small power producer or qualifying cogenerator to agree to a rate for any purchase which differs from the rate or terms or conditions which would otherwise be required by the commission. No payments or rates shall be required by this section in locations where retail electric competition is certified to exist pursuant to RSA 38:36, unless such payments or rates are pursuant to an arrangement authorized by RSA 362-A:3.
8 Limited Electrical Energy Producers Act; Consideration by the Commission; Existing Order or Agreement. Amend RSA 362-A:4-c to read as follows:
362-A:4-c Consideration by the Commission.
I. The commission shall independently and expeditiously consider any mutually acceptable agreement for the buydown, buyout, or renegotiation of any existing commission order providing for qualifying facility power sales or power purchase agreement regardless of the status of any other such pending renegotiations.
II. The commission shall not approve any buyout of a listed facility prior to July 1, 2000. The commission shall not approve any buyout of a listed facility until competition is certified to exist in at least 70 percent of the state pursuant to RSA 38:36.
III. The commission shall not approve any renegotiation which places restrictions on selling the output of the qualifying facility in a competitive generation market pursuant to RSA 374-F.
IV. The commission shall not approve any renegotiation of a commission order providing for power sales from a listed facility if, for any calendar year prior to 2006, that renegotiation would reduce the total number of kilowatt hours being purchased annually at predetermined prices from all listed facilities to less than 80 percent of the base listed-facility kilowatt hours for that calendar year.
V. In this section:
(a) "Base listed-facility kilowatt hours for that calendar year" means the total number of kilowatt hours which would have been purchased during the calendar year from all listed facilities if the renegotiated rate orders for all such listed facilities pending before the commission as of January 1, 1998 had been approved.
(b) "Buyout" means any modification of any existing commission order providing for power sales from a listed facility that (i) changes the termination date of that order to an earlier date, unless the modified termination date is not earlier than the termination date in the renegotiated buydown for that listed facility which was pending before the commission as of January 1, 1998, or (ii) eliminates predetermined prices for any of the output of the facility covered by the rate order.
(c) "Listed facility" means any of the 5 wood-fired qualifying facilities having rate orders which, as of January 1, 1998, provide the right to sell at least 10 megawatts of capacity and associated energy to Public Service Company of New Hampshire.
9 New Subparagraph; Limited Electrical Energy Producers Act; Payment Obligations; Commission Considerations; Electric Rates Added. Amend RSA 362-A:8, II(b) by inserting after subparagraph (4) the following new subparagraph:
(5) The impact on electric rates.
10 New Section; Limited Electrical Energy Producers Act; Net Energy Metering. Amend RSA 362-A by inserting after section 8 the following new section:
362-A:9 Net Energy Metering.
I. A standard contract or tariff providing for net energy metering shall be developed and made available to eligible customer-generators by each electric distribution utility within 6 months of the start of retail choice of electric suppliers. Such tariffs or contracts shall be available on a first-come, first-served basis within each electric utility service area under the jurisdiction of the commission until such time as the total rated generating capacity owned and operated by eligible customer-generators totals 0.05 percent of the annual peak energy demand distributed by each such utility as determined by the commission from time to time.
II. Net energy metering shall be accomplished using a single meter capable of registering the flow of electricity in two directions. However, an additional meter or meters to monitor the flow of electricity in each direction may be installed, provided that it is not at the expense of the customer-generator unless requested by the customer-generator, and provided that such metering shall be used only to provide the information necessary to accurately bill the customer-generator pursuant to the provisions of this section, or for research purposes. If an additional meter or meters are installed, the net energy metering calculation shall yield the same result as when a single meter is used. The net energy metering calculation shall be made by taking the difference between the electricity supplied over the electric distribution system and the electricity generated by the eligible customer-generator and fed back into the electric distribution system over the billing period.
III. Each net energy metering contract or tariff offered by an electric distribution utility shall be identical, with respect to rates, rate structure, and periodic charges, to the contract or tariff to which the same customer would be assigned if such customer was not an eligible customer-generator. Electricity suppliers may voluntarily determine the terms, conditions, and prices under which they will agree to provide generation supply to and purchase net generation output from eligible customer-generators; however, electricity suppliers who provide default service or transition service to such a customer shall only bill for the net energy supplied as calculated in accordance with this section.
IV. The following rules shall apply to net energy measurement:
(a) The net energy produced or consumed on a monthly basis shall be measured in accordance with normal metering practices.
(b) Where the electricity supplied to the customer-generator over the electric distribution system exceeds the electricity generated by the customer-generator during the billing period, the customer-generator shall be billed based on the net energy supplied for distribution services and other charges in accordance with this section and standard applicable rates.
(c) Where the electricity generated by the customer-generator exceeds the electricity supplied by the electric grid, the customer-generator shall be credited during the next billing period for the excess kilowatt hours generated in accordance with this section.
V. The commission shall adopt rules, pursuant to RSA 541-A, to establish reasonable interconnection requirements for safety, reliability, and power quality as it determines the public interest requires.
VI. The commission, by order, may waive any of the limitations set forth in this chapter for targeted net energy metering arrangements that are part of a utility strategy to minimize distribution costs.
11 Report by Commission on Net Energy Metering. Within 6 months after the limit on the availability of net energy metering set forth in RSA 362-A:9, I, as inserted by section 10 of this act, is reached in one or more electric utility service areas, the commission shall submit a report to the legislative oversight committee on electric utility restructuring, the house science, technology and energy committee, and the senate executive departments and administration committee. The report shall concern the results and effects of net energy metering arrangements to date, including a summary of information available from participating utilities, electricity suppliers, and eligible customer-generators, and may recommend continuing or modifying the limits set forth in RSA 362:9, I and RSA 362-A:1-a, II-b.
12 Intent of Repeal of RSA 362-A:4-b. The repeal of RSA 362-A:4-b is intended to allow for mutually acceptable buyouts. However, the prospect of possible buyouts of existing commission orders providing for qualifying facility power sales as an alternative to the negotiated agreements for buydowns pending before the commission on or before the effective date of this act, or subsequent modifications of those negotiated agreements, shall not be considered by the commission as a factor in its determination of whether Northeast Utilities has used its "best efforts" to renegotiate existing commission orders providing for qualifying facility power sales pursuant to its obligations under the rate agreement referenced in RSA 362-C.
13 Legislative Intent of Limits on Renegotiations of Wood-Fired Qualifying Facility Orders. The limits on renegotiations of wood-fired qualifying facility orders in RSA 362-A:4-c, as amended by this act, are intended to preserve an outlet for low-grade wood. If other markets are developed for low-grade wood, the legislature should reexamine these limits.
14 Legislative Findings Relative to Approval of Pending Renegotiated Arrangements. The legislature finds that, with respect to the renegotiated arrangements for the remaining 6 wood-to-energy plants that were pending before the public utilities commission as of January 1, 1998:
I. Significant net savings to customers will occur if these arrangements are promptly approved by the commission.
II. Timely action is essential because significant losses of these savings will occur if approval is further delayed.
III. It is in the public interest to clarify the recoverability of payments made pursuant to these arrangements by stating that payments made pursuant to these arrangements shall be as recoverable from customers as payments made pursuant to the rate orders that they replace or modify. Nothing in this section is intended to provide any greater opportunity for cost recovery than is available under applicable regulation or law on the effective date of this act.
15 Repeal. RSA 362-A:4-b, relative to buyout of existing rate orders, is repealed.
16 Effective Date. This act shall take effect 60 days after its passage.
LBAO
97-0976
2/3/98
HB 485 FISCAL NOTE
AN ACT relative to limited electrical energy producers.
FISCAL IMPACT:
The Public Utilities Commission (PUC) stated this bill, as amended by the House, may have an indeterminable impact on state and local revenue and state, county and local expenditures. There will be no fiscal impact on county revenue.
METHODOLOGY:
The PUC has stated there is insufficient information to calculate impacts. The largest potential impacts would result from buy downs or buyouts. Specific information related to the buy downs or buyouts is necessary to estimate the fiscal impact. To the extent that the Business Profits Tax and the Business Enterprise Tax revenue are affected, state revenue could decrease, as well as local property tax revenue. In addition, to the extent that state, county and local governments are taxpayers, they may see a change in their utility costs.