CHAPTER 373
SB 451 – FINAL VERSION
03/20/08 1072s
03/20/08 1101s
15May2008… 1727h
06/05/08 2158eba
2008 SESSION
06/03
SENATE BILL 451
AN ACT authorizing rate recovery for electric public utilities investments in distributed energy resources.
SPONSORS: Sen. Fuller Clark, Dist 24; Sen. Hassan, Dist 23; Sen. Sgambati, Dist 4; Sen. Cilley, Dist 6; Sen. Odell, Dist 8; Rep. Borden, Rock 18; Rep. J. Garrity, Rock 6; Rep. Harvey, Hills 21; Rep. Grote, Rock 18; Rep. G. Andersen, Graf 11
COMMITTEE: Energy, Environment and Economic Development
This bill:
I. Authorizes rate recovery for electric public utilities investments in distributed energy resources.
II. Exempts rural electric cooperatives from the requirements for public utilities commission authorization.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
03/20/08 1072s
03/20/08 1101s
15May2008… 1727h
06/05/08 2158eba
08-2847
06/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eight
AN ACT authorizing rate recovery for electric public utilities investments in distributed energy resources.
Be it Enacted by the Senate and House of Representatives in General Court convened:
373:1 New Chapter; Electric Utility Investment in Distributed Energy Resources. Amend RSA by inserting after chapter 374-F the following new chapter:
CHAPTER 374-G
ELECTRIC UTILITY INVESTMENT
IN DISTRIBUTED ENERGY RESOURCES
374-G:1 Purpose. Distributed energy resources can increase overall energy efficiency and provide energy diversity by eliminating, displacing, or better managing energy deliveries from the centralized bulk power grid, 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 by encouraging New Hampshire electric public utilities to invest in distributed energy resources including clean and renewable generation benefiting the transmission and distribution system under state regulatory oversight.
374-G:2 Definitions; Exclusions.
I. The following definitions shall apply in this chapter except as otherwise provided:
(a) “Commission” means the public utilities commission.
(b) “Distributed energy resources” means electric generation equipment, including clean and renewable generation, energy storage, energy efficiency, demand response, load reduction or control programs, and technologies or devices located on or inter-connected to the local electric distribution system for purposes including but not limited to reducing line losses, supporting voltage regulation, or peak load shaving, as part of a strategy for minimizing transmission and distribution costs as provided in RSA 374-F:3, III.
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 megawatts.
374-G:3 Electric Generation Equipment Funded by Public Utility; Requirements. Any electric generation equipment funded in part by a public utility under this chapter is subject to the following requirements:
I. The energy produced by electric generation equipment owned by the public utility shall be used as an offset to distribution system losses or the public utility company’s own use;
II. The energy produced by electric generation equipment utilizing a non-renewable fuel source that is owned by a customer, or sited on a customer’s property shall be used to displace the customer’s own use;
III. The energy produced by electric generation equipment utilizing a renewable fuel source that is owned by a customer, or sited on the consumer’s premises shall be used to displace the customers own use; however, if energy is occasionally generated in excess of the customer’s energy requirements, it may be credited to the customer’s account in a subsequent period.
IV. Any biomass-fueled generation shall meet the emission requirements to qualify as eligible biomass technology under RSA 362-F:2, VIII.
V. Any fossil-fuel fueled generation shall produce combined heat and power with a minimum energy efficiency of 60 percent, measured as usable thermal and electrical output in BTUs divided by fuel input in BTUs, shall be installed as an integrated combined heat and power application, and shall meet the following emission standards (in lbs/MW-H): NOx - 0.07; CO - 0.10; VOCs - 0.02. A credit to meet the emission standard may be applied at the rate of one MW-H for each 3.4 million BTUs of heat recovered.
VI. These requirements apply in addition to and do not preempt or replace any emission standards or permitting requirements applicable to a given generation facility under any other applicable state or federal law.
374-G:4 Investments in Distributed Energy Resources.
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 distributed energy resources, located on or inter-connected to the local electric distribution system.
II. Distributed electric generation owned by or receiving investments from an electric utility under this section shall be limited to a cumulative maximum in megawatts of 6 percent of the utility’s total distribution peak load in megawatts.
III. In addition, once the cumulative generation authorized under this chapter for a given public utility reaches 3 percent of the utility’s total distribution peak load in megawatts, then that utility shall not be allowed to add any additional non-renewable generation under this chapter, until the cumulative renewable generation installed pursuant to this chapter, as a percentage of total generation installed pursuant to this chapter, shall equal or exceed twice the sum of the then- applicable percentage requirements for class I and class II under RSA 362-F:3.
374-G:5 Rate Filing; Authorization.
I. A New Hampshire electric public utility may seek rate recovery for its investments in distributed energy resources from the commission 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 with specific reference to the factors listed in paragraph II, 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 it has made reasonable efforts to involve local businesses in its program.
(e) Evidence of compliance with any applicable emission limitations.
(f) A copy of any customer contracts or agreements to be executed as part of the program.
II. Prior to authorizing a utility’s recovery of investments made in distributed energy resources, the commission shall determine that the utility’s investment and its recovery in rates, as proposed, are in the public interest. Determination of the public interest under this section shall include but not be limited to consideration and balancing of the following factors:
(a) Whether the expected value of the economic benefits of the investment to the utility’s ratepayers over the life of the investment outweigh the economic costs to the utility’s ratepayers.
(b) The efficient and cost-effective realization of the purposes of the renewable portfolio standards of RSA 362-F and the restructuring policy principles of RSA 374-F:3.
(c) The costs and benefits to any participating customer or customers.
(d) The costs and benefits to the company’s default service customers.
(e) The energy security benefits of the investment to the state of New Hampshire.
(f) The environmental benefits of the investment to the state of New Hampshire.
(g) The economic development benefits and liabilities of the investment to the state of New Hampshire.
(h) The effect on the reliability, safety, and efficiency of electric service.
(i) The effect on competition within the region’s electricity markets and the state’s energy services market.
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, taxes, 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.
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 this deadline to 6 months at its discretion for any filing involving an investment in excess of $1,000,000. The commission may also extend the deadline at its discretion for failure of the applicant to respond to data requests on an expedited timeline.
374-G:6 Exemption; Rural Electric Cooperatives. The requirements for commission authorization for recovery of investments under RSA 374-G:5 shall not apply to rural electric cooperatives for which a certificate of deregulation is on file with the commission.
374-G:7 Exclusion. Any renewable generating equipment funded in part by a distribution utility under this chapter shall not be included in the calculation of the total rated generating capacity under RSA 362-A:9, I for purposes of limiting net energy metering.
373:2 Electric Utility Investment in Distributed Energy Resources; Report. The public utilities commission shall prepare a report reviewing and evaluating utility distributed energy resources investments proposed and implemented under RSA 374-G, to be filed on November 1, 2010, with the governor, the president of the senate, the speaker of the house of representatives, and the chairmen of the house science, technology, and energy committee and the senate energy, environment, and economic development committee. The report shall include any recommended changes to RSA 374-G, specifically including recommendations with respect to the definitions in 374-G:2, the limits in 374-G:4, II and the incentive provision in 374-G:5, IV.
373:3 Effective Date. This act shall take effect 60 days after its passage.
Approved: July 11, 2008
Effective Date: September 9, 2008