Revision: June 3, 2013, midnight
HB 306 – AS AMENDED BY THE SENATE
20Mar2013… 0802h
05/23/13 1626s
2013 SESSION
06/01
HOUSE BILL 306
AN ACT relative to New Hampshire’s regional greenhouse gas initiative.
SPONSORS: Rep. Rappaport, Coos 1
COMMITTEE: Science, Technology and Energy
This bill modifies New Hampshire’s regional greenhouse gas 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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
20Mar2013… 0802h
05/23/13 1626s
13-0663
06/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Thirteen
AN ACT relative to New Hampshire’s regional greenhouse gas initiative.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Multiple Pollutant Reduction Program; Rulemaking. Amend RSA 125-O:8, I(f) to read as follows:
(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, provided that the department may incorporate national or regional forestry protocols by reference that are referenced in the RGGI model rule.
2 Definitions; Compliance Period. Amend RSA 125-O:20, IV to read as follows:
IV. “Compliance period” means a 3 calendar year time period[, unless extended one calendar year by a stage-2 trigger event]. The first compliance period is from January 1, 2009 to December 31, 2011[, unless a stage-2 trigger event extends the first compliance period to December 31, 2012]. Each subsequent sequential 3 calendar year period is a separate compliance period [subject to a one-year extension if a stage-2 trigger event occurs during the compliance period. The compliance period shall never be longer than 4 calendar years].
3 New Paragraph; Definitions; FCPBA. Amend RSA 125-O:20 by inserting after paragraph VII the following new paragraph:
VII-a. “FCPBA” means “first compliance period banked allowances” which equals all of the 2009, 2010, and 2011 vintage RGGI allowances that are banked by any person, excluding any state participating in the RGGI program, as of January 1, 2014, multiplied by 8,620,460 and divided by the product of 165,184,246 times 7.
4 New Paragraph; Definitions; SCPBA. Amend RSA 125-O:20 by inserting after paragraph XV the following new paragraph:
XV-a. “SCPBA” means “second compliance period banked allowances” which equals all of the 2012 and 2013 vintage RGGI allowances that are banked by any person, excluding any state participating in the RGGI program, as of March 15, 2014, minus the total 2012 & 2013 CO2 emissions from all regional sources subject to RGGI, multiplied by 8,620,460 and divided by the product of 165,184,246 times 6.
5 Definitions; Regional Greenhouse Gas Initiative. Amend RSA 125-O:20, XII to read as follows:
XII. “Regional greenhouse gas initiative” or “RGGI” or “RGGI program” means the program to implement the memorandum of understanding (MOU) between signatory states, dated December 20, 2005, as amended [on August 8, 2006 and April 20, 2007], and the corresponding model rule as amended February 7, 2013, to establish a regional CO2 emissions budget and allowance trading program for emissions from fossil fuel-fired electricity generating units.
6 Carbon Dioxide Emissions Budget Trading Program. RSA 125-O:21, II is repealed and reenacted to read as follows:
II. The program shall include a statewide budget allowance total for each year calculated as follows:
2014 4,749,011 minus FCPBA
2015 4,630,286 minus FCPBA minus SCPBA
2016 4,514,529 minus FCPBA minus SCPBA
2017 4,401,665 minus FCPBA minus SCPBA
2018 4,291,624 minus FCPBA minus SCPBA
2019 4,184,333 minus FCPBA minus SCPBA
2020 4,079,725 minus FCPBA minus SCPBA
2021 and thereafter 4,079,725
7 Unsold Allowances for Cost Containment. Amend RSA 125-O:21, III-a to read as follows:
III-a. Budget allowances that are required to be made available for sale at auction under paragraph III, but remain unsold, shall not be retired by the department, and may be used for cost containment purposes under RSA 125-O:29.
8 Carbon Dioxide Emissions Budget Trading Program. Amend the introductory paragraph of RSA 125-O:21, VI to read as follows:
VI. The department and the commission shall report on an annual basis to the air pollution advisory committee under RSA 125-J:11 and the legislative oversight committee on electric utility restructuring under RSA 374-F:5, on the status of the implementation of RGGI in New Hampshire, with emphasis on the prices and availability of RGGI allowances to affected CO2 sources, consumer protection mechanisms, and the trends in electric rates for New Hampshire businesses and ratepayers. The report shall include but not be limited to:
9 Carbon Dioxide Emissions Budget Trading Program. Amend RSA 125-O:21, VI(h) to read as follows:
(h) The status of any proposed or adopted federal CO2 cap and trade program, the impact on New Hampshire’s RGGI program, and recommendations for any proposed legislation necessary to accommodate the federal program; and
(i) Effectiveness of allowance price control and consumer protection mechanisms, including, but not limited to, offsets, cost containment reserves, cost thresholds, and consumer rebates.
10 Compliance; Permit Required. Amend RSA 125-O:22, I and II to read as follows:
I. Each affected CO2 source shall obtain and retire a quantity of RGGI allowances equivalent to its CO2 emissions from fossil-fuel fired generation for each compliance period. Such retirement shall be done in stages. At the end of both the first and second year of the compliance period, RGGI allowances equal to ½ of the affected source’s CO2 emissions during each respective year shall be retired. At the end of the third year of the compliance period, the balance of the total allowances due shall be retired. The retirement of allowances at the end of the first and second year shall not apply to the compliance period ending December 31, 2014.
II. An affected CO2 source may use offset allowances for up to 3.3 percent of its compliance obligation[, except that in a given compliance period:
(a) If a stage-one trigger event occurs, an affected CO2 source may use offset allowances for up to 5 percent of its compliance obligation; and
(b) If a stage-2 trigger event occurs, the compliance period shall be extended to 4 years and an affected CO2 source may use offset allowances for up to 10 percent of its compliance obligation, including offset allowances or credits permanently retired from eligible international trading programs, as approved by the department].
11 Threshold Price Rebate. Amend RSA 125-O:23, II to read as follows:
II. All amounts in excess of the threshold price of $1 for any allowance sale shall be rebated to all [default service] retail electric ratepayers in the state on a per-kilowatt-hour basis, in a timely manner to be determined by the commission.
12 Auction of Budget Allowances. Amend RSA 125-O:26, II to read as follows:
II. Shall include the sale of allowances for current [and future] years and may include the sale of allowances for future years to promote transparency and price stability in a manner to be determined by the department in coordination with the regional organization;
13 Review of the 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] 2016 comprehensive review by the [signatory states as required in the MOU] participating states, the commission and the department shall concurrently review New Hampshire specific elements of the RGGI program, [in particular RSA 125-O:23 and RSA 125-O:25,] and include the results of such review and any recommendations for revisions to the New Hampshire regional greenhouse gas initiative program under RSA 125-O:19-29, resulting from this review in the agencies’ annual report under RSA 125-O:21, VI.
14 New Section; Allowances Used for Cost Containment. Amend RSA 125-O by inserting after section 28 the following new section:
125-O:29 Cost Containment Allowances in Addition to the Budget.
I. For the purposes of cost containment, the department shall make available for sale at one or more auctions up to 260,935 allowances for 2014 or, for any year thereafter, up to 521,869 allowances, that shall be in addition to the budget allowance total for the given year under RSA 125-O:21, II, if:
(a) The CO2 allowance auction price equals or exceeds $4 in 2014;
(b) The CO2 allowance auction price equals or exceeds $6 in 2015;
(c) The CO2 allowance auction price equals or exceeds $8 in 2016;
(d) The CO2 allowance auction price equals or exceeds $10 in 2017;
(e) The CO2 allowance auction price equals or exceeds $10.25 in 2018;
(f) The CO2 allowance auction price equals or exceeds $10.51 in 2019;
(g) The CO2 allowance auction price equals or exceeds $10.77 in 2020; or
(h) In any year thereafter, the CO2 allowance auction price equals or exceeds 1.025 multiplied by the auction price at which cost containment allowances were required to be made available in the previous calendar year rounded to the nearest whole cent, until further legislative action.
II. The allowances sold pursuant to paragraph I shall be replenished, such that the full 521,869 allowances, if needed, are available the following calendar year.
15 Repeal. RSA 125-O:20, V, VIII, XVI, and XVII relative to regional greenhouse gas initiative definitions, are repealed.
16 Effective Date. This act shall take effect January 1, 2014.
LBAO
13-0663
Amended 05/29/13
HB 306 FISCAL NOTE
AN ACT relative to New Hampshire’s regional greenhouse gas initiative.
FISCAL IMPACT:
The Public Utilities Commission and the Department of Environmental Services state this bill, as amended by the Senate (Amendment #2013-1626s), will increase state restricted revenues and expenditures by $2,500,000 in FY 2014, $8,600,000 in FY 2015, $14,500,000 in FY 2016 and $19,000,000 in FY 2017. There will be no fiscal impact on county and local revenues or expenditures.
METHODOLOGY:
The Public Utilities Commission and the Department of Environmental Services state this bill reduces the annual statewide budget allowance for carbon dioxide emissions. The Commission and Department state under current law, allowance prices have been below $2 and would be expected to remain at or below $2 for the foreseeable future. Based on computer modeling projections, the Commission and Department estimate the proposed legislation would increase the allowance prices to $3.60 in 2014, $5.14 in 2015, $6.57 in 2016, $8.00 in 2017. The Commission and the Department estimate this increase in allowance prices would increase state restricted revenues by approximately $2,500,000 in FY 2014, $8,600,000 in FY 2015, $14,500,000 in FY 2016, and $19,000,000 in FY 2017.
Whereas the proposed legislation specifies all amounts received in excess of the $1 threshold price per allowance be rebated to retail electric ratepayers, the Commission and Department state the entirety of the increased restricted revenues would be designated for this purpose and therefore state restricted expenditures would increase by an amount equal to the increase in restricted revenue.