Revision: Jan. 31, 2018, 3:01 p.m.
HB 559-FN - AS AMENDED BY THE HOUSE
9Jan2018... 2479h
2017 SESSION
17-0470
06/04
HOUSE BILL 559-FN
AN ACT relative to expenditures from the energy efficiency fund.
SPONSORS: Rep. Richardson, Coos 4; Rep. Shepardson, Ches. 10; Rep. Backus, Hills. 19; Sen. Feltes, Dist 15; Sen. Fuller Clark, Dist 21
COMMITTEE: Science, Technology and Energy
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This bill modifies the allocation of rebates to retail electric customers.
This bill also requires the public utilities commission to allocate certain funds to school districts for energy efficiency projects.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
9Jan2018... 2479h 17-0470
06/04
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Seventeen
AN ACT relative to expenditures from the energy efficiency fund.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Regional Greenhouse Gas Initiative; Energy Efficiency Fund and Use of Auction Proceeds. Amend RSA 125-O:23, II and III to read as follows:
II. All amounts [in excess of the threshold price of $1 for any allowance sale] shall be allocated to the commercial and industrial retail electric customers and the residential retail electric customers consistent with the kilowatt-hour delivery sales of electric distribution utilities as determined by the commission. All of the commercial and industrial retail electric customer allocations shall be rebated to all [retail electric ratepayers] commercial and industrial retail customers 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, excluding the amount used for commission and department administration under paragraph I, shall be allocated by the commission as follows:
(a) At least [15] 35 percent to the low-income core energy efficiency program.
(b) Beginning January 1, [2014] 2018, up to [$2,000,000] $5,000,000 annually to utility core programs for municipal, school district, and local government energy efficiency projects, including projects by local governments that have their own municipal utilities. Funding elements shall include, but not be limited to, funding for direct technical and project management assistance to identify and encourage comprehensive projects and incentives structured to assist municipal and local governments funding energy efficiency projects. In calendar years 2014, 2015, [and] 2016, 2017, and 2018, any unused funds allocated to municipal and local government projects under this paragraph remaining at the end of the year shall roll over and be added to the new calendar year program funds and continue to be made available exclusively for municipal and local government projects. Beginning in calendar year [2017] 2019, and all subsequent years, funds allocated to municipal and local government projects under this paragraph shall be offered first to municipal and local governments as described in this paragraph for no less than 4 full calendar months. If, at the end of this time, municipal and local governments have not submitted requests for eligible projects that will expend the funds allocated to municipal and local government projects under this paragraph within that program year, the funds shall [be offered on a first-come, first-serve basis to business and municipal customers who fund the system benefits charge] go to a fuel neutral residential core energy efficiency program.
2 Repeal. RSA 125-O:23, IV and V, relative to use of remaining proceeds received by the state from the sale of allowances is repealed.
3 Effective Date. This act shall take effect 60 days after its passage.
17-0470
Amended 1/31/18
HB 559-FN- FISCAL NOTE
AS AMENDED BY THE HOUSE (AMENDMENT #2017-2479h)
AN ACT relative to expenditures from the energy efficiency fund.
FISCAL IMPACT: [ X ] State [ X ] County [ X ] Local [ ] None
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STATE: | FY 2019 | FY 2020 | FY 2021 | FY 2022 |
Appropriation | $0 | $0 | $0 | $0 |
Revenue | Indeterminable | Indeterminable | Indeterminable | Indeterminable |
Expenditures | Indeterminable | Indeterminable | Indeterminable | Indeterminable |
Funding Source: | [ X ] General [ ] Education [ X ] Highway [ X ] Other - Energy Efficiency Fund | |||
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COUNTY: |
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Revenue | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase |
Expenditures | Indeterminable | Indeterminable | Indeterminable | Indeterminable |
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LOCAL: |
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Revenue | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase |
Expenditures | Indeterminable | Indeterminable | Indeterminable | Indeterminable |
METHODOLOGY:
This bill would repeal the $1 per allowance rebate threshold for auction proceeds deposited into the Energy Efficiency Fund. Commercial and retail electric ratepayers would receive a full rebate and rebates to residential customers would end. At least 35% of all remaining proceeds received from the sale of allowances, after administrative costs, would be allocated to the low-income core energy efficiency program. Up to $5,000,000 annually would be allocated to municipal, school district, and local government energy efficiency (EE) projects under the core programs. The remainder, if any, would go to a fuel-neutral residential core energy efficiency program. There would be no impact on revenue. Assuming an average allowance price of $4.30, estimated revenue would be $14 million in FY 2019. Under current law, revenue in excess of $1 per allowance sold is allocated by the Public Utilities Commission (PUC) for rebates to all electric ratepayers on a per-kilowatt hour basis. Under this bill, all commercial and industrial retail electric ratepayers, including state and local governmental units, would receive a rebate and the current commercial and industrial EE programs would no longer be supported with RGGI funds. Using the $14 million estimate and assuming commercial and industrial customers represent 60% of the total kilowatt-hour (kWh) delivery sales of electric distribution utilities and residential customers represent 40%, approximately $8.19 million would be rebated to commercial and industrial customers. Rebates are passed along to customers in the form of a reduction to the customer’s monthly electricity bill based upon usage.
The bill would end rebates to residential customers resulting in a minor increase in electricity costs which would ultimately be offset by lower local taxes resulting from municipal and school EE investments. Under this bill, an estimated $5.46 million would be allocated as follows:
Municipal, school district, and local government projects under the core energy efficiency programs would benefit from incentives, loans or spending on EE projects. These entities would also receive increased rebates and benefit in the long term from increased energy efficiency funding. State governmental entities would gain additional rate rebates which could reduce direct expenditures for electricity. State agencies would no longer be eligible for direct EE benefits since the bill focuses funding on low income residential, local governmental and residential customers. In FY 2017, the State consumed 102,452,945 kWh of electricity in state-owned and leased buildings and non-building fixtures. Assuming revenue of $14 million and no change in the electricity usage, state expenditures for electricity may be reduced by $27,000. Other direct and indirect benefits to the state over the next 4 fiscal years are indeterminable. The benefits to county and local governments are likely to increase over each of the next 4 fiscal years, but cannot be determined. The “NH Greenhouse Gas Emissions Reduction Fund Annual Evaluation (July 2011 – June 2012)” posted on the PUC website, indicates that each dollar invested in EE results in $4.95 in energy savings. It is not possible to know how funds will be distributed among various recipients for energy efficiency upgrades or how much of the lost rebates to residential customers will be offset by energy efficiency savings to those customers.
The New Hampshire Municipal Association states this bill increases to $5 million, from $2 million, the amount to be distributed annually to municipal energy efficiency projects from the sale of carbon allowances under the regional greenhouse gas initiative. The Association considered distributions to school districts to be local revenues and assumes the full amount allocated would be distributed and spent on municipal and school district energy efficiency projects each year. The bill would increase local revenues by $3 million per year, beginning in 2018. The funds would be spent on energy efficiency projects during the year to avoid being reallocated, so it is likely that municipalities and school districts would spend the additional $3 million annually. The Association indicates since investment in energy efficiency projects has been demonstrated to reduce energy costs, there would be long-term reductions in local expenditures by an indeterminable amount.
AGENCIES CONTACTED:
Public Utilities Commission, Department of Environmental Services and New Hampshire Municipal Association