HB 302-FN – AS INTRODUCED

2011 SESSION

11-0825

09/10

HOUSE BILL 302-FN

AN ACT modifying the laws relative to renewable energy portfolios.

SPONSORS: Rep. R. Barry, Hills 19; Rep. Cataldo, Straf 3

COMMITTEE: Science, Technology and Energy

ANALYSIS

This bill modifies RSA 362-F, relative to renewable energy portfolios.

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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

11-0825

09/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Eleven

AN ACT modifying the laws relative to renewable energy portfolios.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Purpose. Amend RSA 362-F:1 to read as follows:

362-F:1 Purpose. Renewable energy generation technologies can provide fuel diversity to the state and New England generation supply through use of [local] renewable fuels and resources that serve to displace and thereby lower regional dependence on fossil fuels. This has the potential to lower and stabilize future energy costs by reducing exposure to rising and volatile fossil fuel prices. [The use of renewable energy technologies and fuels can also help to keep energy and investment dollars in the state to benefit our own economy. In addition, employing low emission forms of such technologies can reduce the amount of greenhouse gases, nitrogen oxides, and particulate matter emissions transported into New Hampshire and also generated in the state, thereby improving air quality and public health, and mitigating against the risks of climate change. It is therefore in the public interest to stimulate investment in low emission renewable energy generation technologies in New England and, in particular, New Hampshire, whether at new or existing facilities.]

2 Minimum Electric Renewable Portfolio Standards. Amend RSA 362-F:3 to read as follows:

362-F:3 Minimum Electric Renewable Portfolio Standards. For each year specified in the table below, each provider of electricity shall obtain and retire certificates sufficient in number and class type to meet or exceed the following percentages of total megawatt-hours of electricity supplied by the provider to its end-use customers that year, except to the extent that the provider makes payments to the renewable energy fund under RSA 362-F:10, II:

2008 2009 2010 2011 2012 2013 2014 2015 2025

Class I 0.0% 0.5% [1] 1.04% [2] 2.08% [3] 3.15% [4] 4.2% [5] 5.3% [6] 6.3% [16] 16.3% (*)

[Class II 0.0% 0.0% 0.04% 0.08% 0.15% 0.2% 0.3% 0.3% 0.3%]

Class III 3.5% 4.5% 5.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5%

Class IV 0.5% 1% 1% 1% 1% 1% 1% 1% 1%

Class I increases an additional one percent per year from 2015 through 2025. Classes [II] III-IV remain at the same percentages from 2015 through 2025 [except as provided in RSA 362-F:4, V-VI].

3 Electric Renewable Energy Classes. Amend RSA 362-F:4, I(h) to read as follows:

(h) [Class II sources to the extent that they are not otherwise used to satisfy the minimum portfolio standards of other classes] Solar energy.

4 New Subparagraph; Electric Renewable Energy Classes. Amend RSA 362-F:4, I by inserting after subparagraph (j) the following new subparagraph:

(k) Hydroelectric energy, provided the water pressure used in production was not artificially created using another source of energy.

5 Electric Renewable Energy Classes. Amend RSA 362-F:4, IV to read as follows:

IV.(a) Class IV (Existing [Small] Hydroelectric) shall include the production of electricity from hydroelectric energy, provided the facility began operation prior to January 1, 2006, [has a total nameplate capacity of 5 MWs or less as measured by the sum of the nameplate capacities of all the generators at the facility, has actually installed both upstream and downstream diadromous fish passages] and such installations have [been approved by the] received all applicable Federal Energy Regulatory Commission[, and when required, has documented] approvals and all applicable state water quality certification pursuant to section 401 of the Clean Water Act for hydroelectric projects.

(b)(1) [Notwithstanding subparagraph (a),] The commission shall re-certify as class IV renewable energy sources the facilities named in commission order numbers 24,940 and 24,952. These facilities are:

(A) The Canaan, Gorham, Hooksett, and Jackman hydroelectric facilities owned by Public Service Company of New Hampshire, which had been previously certified by the commission on September 23, 2008; and

(B) The North Gorham and Bar Mills projects owned by FPL Energy Maine Hydro, LLC which had been previously certified by the commission on October 30, 2008.

(2) These facilities shall not qualify or be certified as class IV renewable energy sources after March 23, 2009, unless they meet the requirements of subparagraph (a). Such facilities shall be eligible for class IV renewable energy certificates for all electricity generated between the effective date of each facility's original certification by the commission through March 23, 2009. Such certificates shall have the same validity as any other class IV certificate issued under RSA 362-F, and may be sold, exchanged, banked, and utilized accordingly.

6 New Paragraph; Renewable Energy Certificates; Methodology. Amend RSA 362-F:6 by inserting after paragraph II the following new paragraph:

II-a. The commission shall establish a methodology to estimate the total yearly production from customer-sited sources for which class I certificates are not issued, that are net metered under RSA 362-A:9, and whose installation was paid for, in whole or in part, with renewable energy fund moneys under RSA 362-F:10. For purposes of estimation, the commission shall use a capacity factor rating of 20 percent for each installation. Providers of electricity required to obtain and retire certificates under RSA 362-F:3 shall receive a yearly credit for such production. By February 31 of each year, the commission shall compute and make public a credit percentage that is equal to the estimated production for the prior calendar year divided by the total amount of electricity supplied by providers of electricity to end-use customers in the prior calendar year, with the result converted to a percentage. Each provider may then, at the time of its annual report filing under RSA 362-F:8, claim a class I certificate credit equal to the credit percentage times the total megawatt-hours of electricity supplied by the provider to its end-use customers the prior calendar year.

7 Renewable Energy Fund. Amend RSA 362-F:10 to read as follows:

362-F:10 Renewable Energy Fund.

I. There is hereby established a renewable energy fund. This nonlapsing, special fund shall be continually appropriated to the commission to be expended in accordance with this section. The state treasurer shall invest the moneys deposited therein as provided by law. Income received on investments made by the state treasurer shall also be credited to the fund. All payments to be made under this section shall be deposited in the fund. The moneys paid into the fund under paragraph II of this section[, excluding class II moneys,] shall be used by the commission to support thermal and electrical renewable energy initiatives. [Class II moneys shall only be used to support solar energy technologies in New Hampshire.] All initiatives supported out of these funds shall be subject to audit [by the commission] as deemed necessary by the house science, technology and energy committee. All fund moneys [including those from class II] may be used to administer this chapter, but all new employee positions shall be approved by the fiscal committee of the general court.

II. In lieu of meeting the portfolio requirements of RSA 362-F:3 for a given year if, and to the extent sufficient certificates are not otherwise available at a price below the amounts specified in this paragraph, an electricity provider may, at the time of report submission for that year under RSA 362-F:8, make payment to the commission at the following rates for each megawatt-hour not met for a given class obligation through the acquisition of certificates:

(a) Class I--$57.12.

(b) [Class II--$150.

(c)] Class III--$28.

[(d)] (c) Class IV--$28.

III. Beginning in 2008, the commission shall adjust these rates by January 31 of each year using the Consumer Price Index as published by the Bureau of Labor Statistics of the United States Department of Labor.

IV. [The commission shall make an annual report by October 1 of each year, beginning in 2009, to the legislative oversight committee on electric utility restructuring under RSA 374-F:5 detailing how the renewable energy fund is being used and any recommended changes to such use. The report shall also include information on the total peak generating capacity that is net energy metered under RSA 362-A:9 within the franchise area of each electric distribution utility, and the percentage this represents of the amount that is allowed to be net metered within each franchise area.

V. The public utilities commission shall make and administer a one-time incentive payment of $3 per watt of nominal generation capacity up to a maximum payment of $6,000, or 50 percent of system costs, whichever is less, per facility to any residential owner of a small renewable generation facility, that would qualify as a Class I or Class II source of electricity, has a total peak generation capacity of less than 5 kilowatts, begins operation on or after July 1, 2008, and is located on or at the owner's residence.

VI. Such payments shall be allocated from the renewable energy fund established in paragraph I, as determined by the commission to the extent funding is available up to a maximum aggregate payment of 40 percent of the fund over each 2-year period commencing July 1, 2010.

VII. The commission shall, after notice and hearing, by order or rule establish an application process for the incentive payment program established under paragraph V. The application process shall include verification of costs for parts and labor, certification that the equipment used meets the applicable safety standards of the American National Standards Institute (ANSI) or Underwriters Laboratory (UL) or similar safety rating agency, and that the facility meets local zoning regulations, and receives any required inspections.

VIII. The commission may, after notice and hearing, by order or rule, establish additional incentive or rebate programs and competitive grant opportunities for renewable thermal and electric energy projects sited in New Hampshire.

IX. For good cause the commission may, after notice and hearing, by order or rule, modify the program, including reducing the incentive level, created under RSA 362-F:10, V.

X. Consistent with RSA 362-F:10, VI,] The commission shall, over each 2-year period commencing July 1, 2010, reasonably balance overall amounts expended from the fund, net of administrative expenditures, between residential and nonresidential sectors. Funds from the renewable energy fund awarded to renewable projects in the residential sector shall be in approximate proportion to the amount of electricity sold at retail to that sector in New Hampshire, and the remaining funds from the renewable energy fund shall be awarded to projects in the nonresidential sector which include commercial and industrial sited renewable energy projects, existing generators, and developers of new commercial-scale renewable generation in New Hampshire.

[XI.] V. The commission shall issue requests for proposals that provide renewable projects in the nonresidential sector, which include commercial and industrial sited renewable energy projects, existing generators, and developers of new commercial-scale renewable generation in New Hampshire, with opportunities to receive funds from the renewable energy fund established under RSA 362-F:10. The requests for proposals shall provide such opportunities to those renewable energy projects that are not eligible to participate in incentive and rebate programs developed by the commission [under RSA 362-F:10, V and RSA 362-F:10, VIII]. The commission shall issue a request for proposals no later than March 1, 2011 and annually thereafter, and select winning projects in a timely manner, with the approval of the house science, technology and energy committee.

8 Repeal. The following are repealed:

I. RSA 362-F:2, IX(b), relative to the definition of end-use customer.

II. RSA 362-F:4, II, relative to class II renewable energy.

III. RSA 362-F:4, V-VI, relative to modifications to renewable portfolio standard requirements.

IV. RSA 362-F:5, relative to commission review and report.

V. RSA 362-F:6, IV(b), relative to additional requirements for renewable energy certificates.

VI. RSA 362-F:9, II(e), relative to public interest factors for purchased power agreements.

VII. RSA 362-F:13, VII, relative to rulemaking to otherwise discharge responsibilities delegated under this chapter.

9 Effective Date. This act shall take effect 60 days after its passage.

LBAO

11-0825

Revised 01/27/11

HB 302 FISCAL NOTE

AN ACT modifying the laws relative to renewable energy portfolios.

FISCAL IMPACT:

METHODOLOGY: