Bill Text - SB418 (2010)

Establishing requirements for electric distribution company solicitation of proposals from renewable energy developers.


Revision: Jan. 12, 2010, midnight

SB 418 – AS INTRODUCED

2010 SESSION

10-2788

09/01

SENATE BILL 418

AN ACT establishing requirements for electric distribution company solicitation of proposals from renewable energy developers.

SPONSORS: Sen. Fuller Clark, Dist 24; Sen. Odell, Dist 8; Sen. Janeway, Dist 7; Rep. S. Harvey, Hills 21; Rep. Borden, Rock 18

COMMITTEE: Energy, Environment and Economic Development

ANALYSIS

This bill establishes requirements for electric distribution company solicitation of proposals from renewable energy developers.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

10-2788

09/01

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Ten

AN ACT establishing requirements for electric distribution company solicitation of proposals from renewable energy developers.

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

1 New Section; Solicitation of Proposals From Renewable Energy Developers. Amend RSA 374 by inserting after section 57 the following new section:

374:57-a Electric Distribution Company Solicitation Requirement; Renewable Energy.

I. Commencing on July 1, 2010, and continuing for a period of 5 years thereafter, each electric distribution company shall be required twice in that 5-year period to solicit proposals from renewable energy developers and, provided reasonable proposals have been received, enter into cost-effective long-term contracts to facilitate the financing of renewable energy generation within the jurisdictional boundaries of New Hampshire, including state waters or in adjacent federal waters. Distribution companies may also voluntarily solicit additional proposals over the 5-year period. The timetable and method for solicitation and execution of such contracts shall be proposed by the distribution company and shall be subject to review and approval by the public utilities commission. This long-term contracting obligation shall be separate and distinct from the electric distribution company’s obligation to meet applicable annual renewable portfolio standards, hereinafter referred to as “RPS,” requirements, set forth in RSA 362-F.

II. For purposes of this section, a long-term contract is defined as a contract with a term of 10 to 15 years. In developing the provisions of proposed long-term contracts, the distribution company shall consider multiple contracting methods, including long-term contracts for renewable energy certificates, hereinafter referred to as “RECs,” for energy, and for a combination of both RECs and energy. The electric distribution company shall select a reasonable method of soliciting proposals from renewable energy developers, which may include public solicitations, individual negotiations, or other methods. The distribution company may decline to consider contract proposals having terms and conditions that it determines would require the contract obligation to place an unreasonable burden on the distribution company’s balance sheet. All proposed contracts shall be subject to the review and approval of the public utilities commission.

III.(a) The public utilities commission shall adopt rules pursuant to RSA 541-A that are necessary for the implementation of this section and consistent with its provisions. The rules shall:

(1) Allow renewable energy developers to submit proposals for long-term contracts conforming to the contracting methods specified in paragraph II;

(2) Require that contracts executed by the distribution company under such proposals are filed with, and approved by, the public utilities commission before they become effective;

(3) Provide for an annual remuneration for the contracting distribution company equal to 4 percent of the annual payments under the contract to compensate the company for accepting the financial obligation of the long-term contract, such provision to be acted upon by the public utilities commission at the time of contract approval; and

(4) Require that the renewable energy generating source to be used by a developer under the proposal meet the following criteria:

(A) Have a commercial operation date, as verified by the public utilities commission, on or after January 1, 2008;

(B) Be qualified by the public utilities commission as eligible to participate in the RPS program established under RSA 362-F, and to sell RECs under the program; and

(C) Be determined by the public utilities commission to:

(i) provide enhanced electricity reliability within the state;

(ii) contribute to moderating system peak load requirements;

(iii) be cost effective to New Hampshire electric ratepayers over the term of the contract; and

(iv) where feasible, create additional employment in New Hampshire.

(b) The public utilities commission shall take into consideration both the potential costs and benefits of such contracts, and shall approve a contract only upon a finding that it is a cost-effective mechanism for procuring renewable energy on a long-term basis.

IV. Distribution companies shall not be obligated to enter into long-term contracts under this section that would, in the aggregate, exceed 3 percent of the total energy demand from all distribution customers in the service territory of the distribution company. As long as the electric distribution company has entered into long-term contracts in compliance with this section, it shall not be required by rule or order to enter into contracts with terms of more than 3 years in meeting its applicable annual RPS requirements set forth in RSA 362-F, unless the public utilities commission finds such contracts are in the best interest of customers; provided, however, that the electric distribution company may execute such contracts voluntarily, subject to the public utilities commission’s approval.

V. An electric distribution company may elect to use any energy purchased under such contracts for resale to its customers, and may elect to retain RECs for the purpose of meeting the applicable annual RPS requirements set forth in RSA 362-F. If the energy and RECs are not so used, such companies shall sell such purchased energy into the wholesale spot market and shall sell such purchased RECs through a competitive bid process. Notwithstanding the foregoing, the public utilities commission shall conduct periodic reviews to determine the impact on the energy and REC markets of the disposition of energy and RECs hereunder, and may issue reports recommending legislative changes if it determines that actions are being taken that will adversely affect the energy and REC markets.

VI. If the distribution company sells the purchased energy into the wholesale spot market and auctions the RECs as described in paragraph V, the distribution company shall net the cost of payments made to projects under the long-term contracts against the proceeds obtained from the sale of energy and RECs, and the difference shall be credited or charged to all distribution customers through a uniform fully reconciling annual factor in distribution rates, subject to review and approval of the public utilities commission. The reconciliation process shall be designed so that the distribution company recovers all costs incurred under such contracts.

VII. If the RPS requirements of RSA 362-F should ever terminate, the obligation to continue periodic solicitations to enter into long-term contracts shall cease, but contracts already executed and approved by the public utilities commission shall remain in full force and effect.

VIII. On or before July 1, 2010 , and annually until the long-term contracting requirements expire, the public utilities commission shall assess whether the long-term contracting requirements set forth in this section reasonably support the renewable energy goals of the state as set forth in RSA 362-F, and whether the alternative compliance rate established under that chapter should be adjusted accordingly.

IX. The provisions of this section shall not limit consideration of other contracts for RECs or power submitted by a distribution company for review and approval by the public utilities commission.

X. If any provision of this section is subject to a judicial challenge, the public utilities commission may suspend the applicability of the challenged provision during the pendency of the judicial action until final resolution of the challenge and any appeals, and shall issue such orders and take such other actions as are necessary to ensure that the provisions that are not challenged are implemented expeditiously to achieve the public purposes of this section.

2 Effective Date. This act shall take effect June 30, 2010.