Revision: Nov. 13, 2017, 12:38 p.m.
HB 1647 - AS INTRODUCED
HOUSE BILL 1647
SPONSORS: Rep. Oxenham, Sull. 1; Rep. Shepardson, Ches. 10; Rep. Higgins, Graf. 12; Rep. S. Harvey, Hills. 29; Sen. Fuller Clark, Dist 21
COMMITTEE: Science, Technology and Energy
This bill modifies provisions for the inclusion of energy systems in distributed energy resources and the recovery of investment costs for energy storage.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eighteen
Be it Enacted by the Senate and House of Representatives in General Court convened:
378:37 New Hampshire Energy Policy. The general court declares that it shall be the energy policy of this state to meet the energy needs of the citizens and businesses of the state at the lowest reasonable cost while providing for the reliability and diversity of energy sources; to maximize the use of cost effective energy storage as well as cost effective energy efficiency and other demand side resources; and to protect the safety and health of the citizens, the physical environment of the state, and the future supplies of resources, with consideration of the financial stability of the state's utilities.
III. Regulation and Unbundling of Services and Rates. When customer choice is introduced, services and rates should be unbundled to provide customers clear price information on the cost components of generation, transmission, distribution, and any other ancillary charges. Generation services should be subject to market competition and minimal economic regulation and at least functionally separated from transmission and distribution services which should remain regulated for the foreseeable future. However, distribution service companies should not be absolutely precluded from owning small scale distributed generation resources or energy storage as part of a strategy for minimizing transmission and distribution costs. Performance based or incentive regulation should be considered for transmission and distribution services. Upward revaluation of transmission and distribution assets is not a preferred mechanism as part of restructuring. Retail electricity suppliers who do not own transmission and distribution facilities, should, at a minimum, be registered with the commission.
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, 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 New Hampshire electric public utilities to invest in renewable and clean distributed energy resources at the lowest reasonable cost to taxpayers benefiting the transmission and distribution system under state regulatory oversight. Consequently, distributed energy resources, such as energy storage, that provide value to the transmission and/or distribution system should not be precluded from also earning revenue in ISO New England wholesale electricity markets, provided that any such revenue is used solely to reduce the net cost of such investments to ratepayers.
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 interconnected 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.
(c) “ISO New England” means ISO New England, Inc. or any other entity that subsequently assumes the role of administering wholesale electricity markets in New England.
(d) “Wholesale electricity markets” means any electricity market administered by ISO New England, including but not necessarily limited to markets for energy, capacity, and ancillary services.
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, except for energy storage located on or interconnected to the local electric distribution system.
I. The energy produced by electric generation equipment owned by the public utility, except for energy storage located on or interconnected to the local electric distribution system, shall be used as an offset to distribution system losses or the public utility company's own use;
II. Distributed electric generation, except for energy storage located on or interconnected to the local electric distribution system, 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] only be allowed to add [any] additional [non-renewable] energy storage and 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.
III. Authorized and prudently incurred investments, except for energy storage located on or interconnected to the local electric distribution system 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. The utility may recover all reasonable costs associated with the filing, whether or not the application is approved by the commission.
III-a. Only the value of transmission and distribution system benefits and avoided costs of authorized and prudently incurred energy storage 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 transmission and distribution functions of the investment. The utility shall retain whatever portion of the revenue the energy storage investment earns from participation in wholesale electricity markets that the commission finds is necessary to make such an investment financially viable. Any additional revenue beyond that level shall be used to offset the utility’s revenue requirement. The utility may recover all reasonable costs associated with the filing, whether or not the application is approved by the commission.