Revision: May 11, 2011, midnight
HB 519-FN – AS AMENDED BY THE SENATE
23Feb2011… 0324h
23Feb2011… 0408h
05/11/11 1823s
2011 SESSION
09/10
HOUSE BILL 519-FN
AN ACT relative to New Hampshire’s regional greenhouse gas initiative cap and trade program for controlling carbon dioxide emissions.
SPONSORS: Rep. R. Barry, Hills 19; Rep. Kurk, Hills 7; Rep. Mirski, Graf 10; Rep. Manuse, Rock 5; Rep. L. Vita, Straf 3; Sen. Forsythe, Dist 4; Sen. De Blois, Dist 18; Sen. White, Dist 9
COMMITTEE: Science, Technology and Energy
This bill replaces the greenhouse gas emission reduction fund with the energy efficiency fund, lowers the rebate threshold for auction proceeds to $1, and allocates the remaining proceeds received by the state from the sale of allowances to core energy efficiency programs funds by system benefits charges. The bill also requires the legislative oversight committee on electric utility restructuring to monitor and report on certain core energy efficiency programs.
The bill contains a contingent repeal of New Hampshire’s regional greenhouse gas initiative cap and trade program if a New England state which has at least 10 percent of the total load of the 10 states participating in the initiative withdraw from participation in the initiative.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
23Feb2011… 0324h
23Feb2011… 0408h
05/11/11 1823s
11-0475
09/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eleven
AN ACT repealing New Hampshire’s regional greenhouse gas initiative cap and trade program for controlling carbon dioxide emissions.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Energy Consumption Reduction Goal; Reports; Reference Change. Amend RSA 21-I:14-c, III to read as follows:
III. Beginning in calendar year 2012, the commissioner shall submit an annual report to be made available to the public on or before December 1 compiling the annual reports submitted under paragraph II, with findings on the departments’ annual progress in complying with the energy consumption reduction goal established in paragraph I and problems which may prevent the departments from achieving this goal, to the [energy efficiency and sustainable energy board established under RSA 125-O:5-a, the] governor, the senate president, the speaker of the house of representatives, the chair of the senate energy[, environment and economic development] and natural resources committee and the chair of the house science, technology and energy committee.
2 Rulemaking; Energy Efficiency Fund and Use of Auction Proceeds. Amend RSA 125-O:8, II to read as follows:
II. The public utilities commission shall adopt rules, under RSA 541-A, to administer the [greenhouse gas emissions reduction] energy efficiency fund and auction proceeds received pursuant to RSA 125-O:23.
3 Carbon Dioxide Emissions Budget Trading Program; Auction Proceeds. Amend RSA 125-O:21, III to read as follows:
III. The department shall make available for sale at one or more auctions all of the budget allowances for a given year, except for those granted or reserved under RSA 125-O:22, VI, 125-O:24, and 125-O:25. The department may also make available for sale at one or more auctions a portion of future year budget allowances. Such auctions may be conducted in coordination with other states. Revenues from the sale of allowances shall be deposited in the [greenhouse gas emissions reduction] energy efficiency fund established under RSA 125-O:23.
4 Greenhouse Gas Emissions Reduction Fund Replaced With Energy Efficiency Fund and Use of Auction Proceeds. RSA 125-O:23 is repealed and reenacted to read as follows:
125-O:23 Energy Efficiency Fund and Use of Auction Proceeds.
I. There is hereby established an energy efficiency 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 programs supported by these funds shall be subject to audit by the commission as deemed necessary. A portion of the fund moneys shall be used to pay for commission and department costs to administer this subdivision, including contributions for the state's share of the costs of the RGGI regional organization. The commission shall transfer from the fund to the department such costs as may be budgeted and expended, or otherwise approved by the fiscal committee of the general court and the governor and council, for the department's cost of administering this subdivision.
II. All amounts in excess of the threshold price of $1 for any allowance sale shall be rebated to all default service electric ratepayers in the state on a per-kilowatt-hour basis, in a timely manner to be determined by the commission.
III. All remaining proceeds received by the state from the sale of allowances shall be allocated by the commission as an additional source of funding to electric distribution companies for core energy efficiency programs that are funded by SBC funds.
5 Review of New Hampshire RGGI Program. Amend RSA 125-O:27 to read as follows:
125-O:27 Review of the New Hampshire RGGI Program. At the time of the 2012 comprehensive review by the signatory states as required in the MOU, the commission and the department shall concurrently review New Hampshire specific elements of the RGGI program, in particular RSA 125-O:23[, IV] and RSA 125-O:25, and include the results of such review in the agencies’ annual report under RSA 125-O:21, VI.
6 Legislative Oversight Committee on Electric Utility Restructuring; Report. Amend 374-F:5, III to read as follows:
III. The committee shall provide an interim report on or before April 1, and an annual report on or before November 1 to the governor, the speaker of the house, the senate president, the state library, and the public utilities commission on the status of electric utility restructuring, including the status of core energy efficiency programs monitored under RSA 374-F:6.
7 New Paragraph; Legislative Oversight Committee on Electric Utility Restructuring; Duties. Amend 374-F:6 by inserting after paragraph IV the following new paragraph:
V. Monitoring core energy efficiency programs funded by proceeds from sale of allowances under the regional greenhouse gas initiative program pursuant to RSA 125-O:23, III.
8 Funding of Contracts. All contracts executed before December 31, 2010 and funded through the greenhouse gas emissions reduction fund shall remain funded through such fund or the energy efficiency fund according to the terms of those contracts. Any funds remaining in the greenhouse gas emissions reduction fund as of January 1, 2012 shall be transferred to the energy efficiency fund.
9 Fund Name Change. Amend RSA 6:12, I(b)(272) to read as follows:
(272) Moneys deposited in the [greenhouse gas emissions reduction] energy efficiency fund established in RSA 125-O:23.
10 Repeal. The following are repealed:
I. RSA 125-O:5-a, I(d), relative to recommendations made to the public utilities commission by the energy efficiency and sustainable energy board.
II. RSA 125-O:19, relative to statement of purpose and findings.
III. RSA 125-O:21, VI(g), relative to a report on the allocation and spending of the greenhouse gas emissions reduction fund.
11 Contingent Repeal. The following are repealed:
I. RSA 125-O:3, III(d), relative to carbon dioxide cap.
II. RSA 125-O:20 through 125-O:28, relative to the regional greenhouse gas initiative.
12 Powers and Duties of Commissioner; Reference Deletion Related to Contingency. Amend RSA 125-O:6, I to read as follows:
I. Develop a trading and banking program to provide appropriate compliance flexibility in meeting the emission caps established under RSA 125-O:3, III [and allowance requirements of RSA 125-O:21 and RSA 125-O:22], and to encourage earlier and greater emissions reductions and the development of new emission control technologies in order to maximize the cost-effectiveness with which the environmental benefits of this chapter are achieved.
13 Rulemaking Authority; Changes Related to Contingent Repeal. Amend RSA 125-O:8 to read as follows:
125-O:8 Rulemaking Authority.
[I.] The commissioner shall adopt rules under RSA 541-A, commencing no later than 180 days after the effective date of this section, relative to:
[(a)] I. The establishment of trading and banking programs as authorized by RSA 125-O:6, I.
[(b)] II. The establishment of a method for allocating allowances and other emissions reduction units or mechanisms as authorized by RSA 125-O:3, II and III.
[(c)] III. Emissions and allowance monitoring, tracking, recordkeeping, reporting, and other such actions as may be necessary to verify compliance with this chapter.
[(d) The method and requirements for auctioning budget allowances under RSA 125-O:21, which may use regional organizations.
(e) Defining eligible projects for early reduction allowances under RSA 125-O:21, IV, and establishing criteria to quantify and grant such allowances.
(f) Defining eligible projects for offset allowances under RSA 125-O:21, V, and establishing criteria to quantify and grant such allowances, including the accreditation of third-party verifiers.
(g) The forms and information required on applications for a temporary or operating permit required under RSA 125-O:22.
II. The public utilities commission shall adopt rules, under RSA 541-A, to administer the greenhouse gas emissions reduction fund pursuant to RSA 125-O:23.]
14 Compliance Dates; Reference Deletions Related to Contingent Repeal. Amend RSA 125-O:9 to read as follows:
125-O:9 Compliance Dates. The owner or operator of each affected source shall comply with the provisions of this chapter, excluding the subdivision on mercury emissions, RSA 125-O:11 through 125-O:18, [and the subdivision for CO2 emissions, RSA 125-O:19 through RSA 125-O:28,] by December 31, 2006.
15 Non-Severability; Reference Deletions Related to Contingent Repeal. Amend RSA 125-O:10 to read as follows:
125-O:10 Non-Severability. No provision of [RSA 125-O:1 through RSA 125-O:18 of] this chapter shall be implemented in a manner inconsistent with the integrated, multi-pollutant strategy [or RSA 125-O:1 through RSA 125-O:18] of this chapter, and to this end, the provisions of [RSA 125-O:1 through RSA 125-O:18 of] this chapter are not severable.
16 Compliance. The repeal of the regional greenhouse gas initiative program under section 11 of this act shall not affect each affected CO2 source’s obligation to satisfy the program’s requirements for the compliance period ending December 31 of the prior year, including those contained in adopted rules. All means of enforcement shall remain in place for these requirements, including the provisions of RSA 125-O:7 and any permit issued or modified by the department of environmental services in accordance with RSA 125-O:22, IV.
17 Contingency. If a New England state which has at least 10 percent of the total load of the 10 states participating in the regional greenhouse gas initiative ends its participation in the initiative sections 11-15 of this act shall take effect upon the date that the commissioner of the department of environmental services certifies to the secretary of state and the director of the office of legislative services that such state has terminated its participation in the initiative.
18 Effective Date.
I. Sections 1-9 and 16-17 of this act shall take effect January 1, 2012.
II. The remainder of this act shall take effect as provided in section 17 of this act.
LBAO
11-0475
Amended 03/04/11
HB 519 FISCAL NOTE
AN ACT relative to New Hampshire’s regional greenhouse gas initiative cap and trade program for controlling carbon dioxide emissions.
FISCAL IMPACT:
The Public Utilities Commission and Department of Environmental Services state this bill, as amended by the House (Amendments #2011-0324h and #2011-0408h), will decrease state restricted revenues and expenditures by approximately $6,155,424 in FY 2012 and by $16,292,669 in FY 2013 and each year thereafter, and will decrease state expenditures by approximately $10,500 in FY 2012 and $21,000 in FY 2013 and each year thereafter. This bill may decrease county and local revenues and expenditures in FY 2012 and each year thereafter.
METHODOLOGY:
The Public Utilities Commission and Department of Environmental Services state this bill repeals the Greenhouse Gas Emissions Reduction Fund (GHGERF) and the Regional Greenhouse Gas Initiative (RGGI) cap and trade program for controlling carbon dioxide emissions. The Commission and the Department state GHGERF is funded by the sale of NH RGGI allowances and is distributed as grants to fund energy efficiency projects for citizens, nonprofits, businesses, and governmental entities. The Commission states RGGI allowances have been trading at or close to the auction floor price for the last two quarters, with some allowances going unsold. The Commission and Department assume only 75 percent of allowances will sell in FY 2012; therefore, if RGGI is repealed state restricted revenues to the GHGERF would be reduced by approximately $6,155,424 in FY 2012 (4,342,451 New Hampshire allowances for FY 2012 * 75 percent = 3,256,838 * $1.89 floor price of allowances). State restricted expenditures of GHGERF grants for energy efficiency projects would also be reduced by $6,155,424. In FY 2013 through FY 2015 the Commission and Department assume all allowances would sell at the auction floor price; therefore, if RGGI is repealed state restricted revenues to the GHGERF would be reduced by approximately $16,292,669 in FY 2013 and each year thereafter (8,620,460 New Hampshire allowances for FY 2013 through FY 2015* $1.89 floor price of allowances). Additionally, the Commission states this bill requires all monies in the GHGERF as of July 1, 2011 (estimated by the Commission to be $4,502,243) and any subsequent monies deposited into the fund be allocated by the Commission to electric distribution companies for CORE energy efficiency programs. To the extent state, county, and local entities would apply for and receive GHGERF grants for energy efficiency projects, state, county, and local restricted revenues will be reduced by an indeterminable amount in FY 2012 and each year thereafter.
The Commission and Department assume RGGI will stay in effect throughout the other New England states where generators would continue to purchase RGGI allowances and incorporate that cost into their dispatch bids on the wholesale market. PSNH is the only utility in New Hampshire with a generation facility required to purchase RGGI allowances. If RGGI were repealed the direct cost for PSNH to purchase these allowances will be reduced. Assuming the Department prevails in an appeal currently pending before the Air Resources Board, PSNH has indicated its compliance obligation will be 4 million tons. At $1.89 per allowance, this will be $7,560,000 per year (4,000,000 * $1.89), or $0.0014 per kilowatt hour of default service load in calendar year 2012 and each year thereafter ($7,560,000/ 5,400,000,000 kilowatt hours). The Commission and Department estimate state expenditures may decrease by approximately $10,500 in FY 2012 and $21,000 in FY 2013 through FY 2015 (number of default service kilowatt hours purchased by the state annually = 15,000,000 * $0.0014), based on information from the Department of Administrative Services. Additionally, to the extent county and local governments are default PSNH customers, county and local expenditures may decrease in FY 2012 and each year thereafter. Because the Commission and Department do not know the kilowatt hours of default PSNH service purchased by county and local governments, the exact fiscal impact cannot be determined at this time.