SB 117-FN-LOCAL - AS AMENDED BY THE SENATE
03/12/2015 0728s
2015 SESSION
15-0881
06/09
SENATE BILL 117-FN-LOCAL
AN ACT relative to energy security and diversity.
SPONSORS: Sen. Soucy, Dist 18; Sen. Feltes, Dist 15; Rep. Murotake, Hills 32; Rep. Backus, Hills 19
COMMITTEE: Energy and Natural Resources
AMENDED ANALYSIS
This bill:
I. Creates an exemption from assessed value, for property tax purposes, for property with a geothermal energy system.
II. Modifies the requirements for electric public utilities that are filing for rate recovery.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
03/12/2015 0728s
15-0881
06/09
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Fifteen
AN ACT relative to energy security and diversity.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Public Utilities Commission; Investigation of Net-Metered Resources. The commission shall initiate a proceeding by July 30th, 2015 to:
I. Investigate the costs and benefits of renewable resources, net-metered pursuant to RSA 362-A:9, including but not limited to the following variables: utility service territory, participants, non-participants, resource type, and participant compensation rate to New Hampshire; and
II. Investigate the implementation of standard offer contracts, or feed-in tariffs, for customer-sited resources, net-metered pursuant to RSA 362-A:9, in New Hampshire.
2 New Subdivision; Geothermal Energy Systems Exemption. Amend RSA 72 by inserting after section 72 the following new subdivision:
Geothermal Energy Systems Exemption
72:72-a Definition of Geothermal Energy Systems. In this subdivision “geothermal energy system” means a system which produces useful thermal energy from geothermal energy to heat or cool the interior of a building or to heat water for use in a building.
72:72-b Exemption for Geothermal Energy Systems. Each city and town may adopt under RSA 72:27-a an exemption from the assessed value, for property tax purposes, for persons owning real property that is equipped with a geothermal energy system as defined in RSA 72:72-a.
72:72-c Application for Exemption. Applications for exemptions under RSA 72:72-b shall be governed by the provisions of RSA 72:33, 72:34, and 72:34-a.
3 Electric Utility Investment in Distributed Energy Resources; Purpose. Amend RSA 374-G:1 to read as follows:
374-G:1 Purpose. Distributed energy resources can increase overall energy efficiency and provide energy security and diversity by eliminating, displacing, or better managing traditional fossil fuel energy deliveries from the centralized bulk power grid, and decrease the need to buy peak power from the regional wholesale market, in keeping with the objectives of RSA 362-F:1. It is therefore in the public interest to stimulate investment in distributed energy resources in New Hampshire in diverse ways, including [by encouraging] allowing New Hampshire electric public utilities to invest in prudent renewable and clean distributed energy resources at the lowest reasonable cost to taxpayers benefiting the transmission and distribution system under state regulatory oversight.
4 Electric Utility Investment in Distributed Energy Resources; Definition; Distributed Energy Resources. Amend RSA 374-G:2, II to read as follows:
II. “Distributed energy resources” in this chapter shall exclude electric generation equipment interconnected with the local electric distribution system at a single point or through a customer’s own electrical wiring that is in excess of [5] 6 megawatts.
5 Investments in Distributed Energy Resources. Amend RSA 374-G:4, I to read as follows:
I. Notwithstanding any other provision of law to the contrary, as provided in RSA 374-G:5, a New Hampshire electric public utility may invest in or own, in part or in its entirety, distributed energy resources, located on or inter-connected to the local electric distribution system.
6 Rate Filing; Authorization. RSA 374-G:5 is repealed and reenacted to read as follows:
I. A New Hampshire electric public utility may seek approval from the commission for rate recovery of its portion of the ownership of or investments in distributed energy resources by making an appropriate rate filing. At a minimum, such filing shall include the following:
(a) A detailed description and economic evaluation of the proposed investment.
(b) A discussion of the costs, benefits, and risks of the proposal, including an analysis of the costs, benefits, and rate implications to the participating customers, to the company’s default service customers, and to the utility’s distribution customers.
(c) A description of any equipment or installation specifications, solicitations, and procurements it has or intends to implement.
(d) A showing that the utility has used a competitive bidding process to reasonably minimize costs of the project to ratepayers and to maximize private investment in the project.
(e) A showing that it has made reasonable efforts to involve local businesses in its program.
(f) Evidence of compliance with any applicable emission limitations.
(g) A copy of any customer contracts or agreements to be executed as part of the program.
II. The commission shall approve the public utility’s rate recovery of its portion of the ownership or investment in a distributed energy resource if the commission finds such ownership or investment is in the public interest. There shall be a rebuttable presumption that ownership of or investment in a distributed renewable energy or energy efficiency, demand-reducing, or storage resource is in the public interest. In determining whether ownership or investment is in the public interest, the commission shall find that such ownership or investment:
(a) Using the societal test, will result in an economic benefit to the state and its residents.
(b) Efficiently and cost-effectively realizes the purposes of the renewable portfolio standards of RSA 362-F and the restructuring policy principles of RSA 374-F:3.
(c) Promotes the energy security, environmental, and economic development benefits of the investment to the state of New Hampshire.
(d) Is consistent with the state energy strategy.
III. Authorized and prudently incurred investments shall be recovered under this section in a utility’s base distribution rates as a component of rate base, and cost recovery shall include the recovery of depreciation, a return on investment, financing, taxes, internal and external costs prudently incurred related to the development of the resource and the regulatory approval process, and other operating and maintenance expenses directly associated with the investment, net of any offsetting revenues received by the utility directly attributable to the investment including revenues from projects authorized by RSA 374-G. The utility may recover all reasonable costs associated with the filing, whether or not the application is approved by the commission. Recovery of such project costs could occur outside of a rate case.
IV. The commission may add an incentive to the return on equity component as it deems appropriate to encourage investments in distributed energy resources.
V. The commission shall approve, disapprove, or approve with conditions a utility rate filing under this section within 90 days of its filing. The commission may extend by order this deadline to 6 months at its discretion for any filing involving an investment in excess of $1,000,000.
7 Effective Date. This act shall take effect 60 days after its passage.
LBAO
15-0881
01/28/15
SB 117-FN-LOCAL - FISCAL NOTE
AN ACT relative to energy security and diversity.
FISCAL IMPACT:
The Public Utilities Commission states this bill, as introduced, will have an indeterminable fiscal impact on state, county and local revenue and expenditures in FY 2015 and each year thereafter.
METHODOLOGY:
The Public Utilities Commission states this bill modifies the formula for determining when tariffs providing for net energy metering are available to customer generators and provides credits for group hosts for surplus electric generation. The Commission states amending RSA 362-A:9 will allow tariffs for net metering to be available on a first come, first served basis until the total rated generating capacity of eligible customer generators equals six percent of the peak electric demand for New Hampshire as recorded for the ISO-NE in 2013. This will likely more than double the current generation capacity available for net metering. By increasing the capacity available for net metering, more customer generators can install, operate or purchase power from renewable energy electric generating facilities. Additionally, the customer generator’s electricity costs will decrease. A group host and group members can receive credits on their electric bill based on production allocations given to the utility. If necessary, on an annual basis, if the host’s surplus generation is greater than the group’s total usage, then the utility shall calculate a payment adjustment. The excess generation above the total group’s usage will only be compensated at the utility’s avoided cost or its default service rate.
The Commission states amending RSA 374-G:3 by allowing the public utilities to invest in, own in part or in entirety non-renewable and renewable electric generation equipment, the public utility would displace the customer’s own use and excess generation is credited to the customer or customer group. Renewable generation may be sold to a customer or customer group as part of a third party financing mechanism. Without the financial arrangements and generation quantity, the Commission is not able to determine the fiscal impact on state, county and local entities as ratepayers.
The Commission states amending RSA 374-G:5 to require an utility to show it has used competitive bidding to reasonably minimize the costs of a project to its customers will have an indeterminable fiscal impact on state, county and local entities as ratepayers.
Lastly, amending RSA 72:62 to include a definition of source that is the same as renewable energy source would impose stricter guidelines for property tax exemptions. This would negatively impact the renewable market by reducing the exemptions allowed at the municipal level. The local level tax revenue may increase but the amount is indeterminable.