Revision: Jan. 24, 2017, 11:33 a.m.
SB 128 - AS INTRODUCED
2017 SESSION
17-0955
06/04
SENATE BILL 128
AN ACT relative to the policy goal of electric utility restructuring.
SPONSORS: Sen. Bradley, Dist 3; Sen. D'Allesandro, Dist 20; Sen. Soucy, Dist 18; Sen. Innis, Dist 24; Sen. Avard, Dist 12; Rep. Barry, Hills. 21; Rep. Hinch, Hills. 21; Rep. Vose, Rock. 9; Rep. Cali-Pitts, Rock. 30; Rep. Richardson, Coos 4
COMMITTEE: Energy and Natural Resources
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This bill modifies electric utility restructuring policy principles by permitting electric utilities to
pursue measures to mitigate the cost of electric service, reduce the price volatility of that service, and/or reduce the potential for disruptions in electricity supply, subject to the commission's determination that such measures are in the public interest.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
17-0955
06/04
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Seventeen
AN ACT relative to the policy goal of electric utility restructuring.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Findings. The general court finds that:
I. The provision of reliable and economic electricity is a necessary service upon which the economy and the welfare of this state rest.
II. Although retail competitive electricity supply has matured since the initial restructuring of the state's electric utilities, development of the wholesale market has been problematic, leading to price volatility and the potential for inadequate capacity supply.
III. ISO-New England, Inc., the independent, non-profit regional transmission organization (RTO), that oversees the operation of New England's bulk electric power system and transmission lines has stated that infrastructure constraints could pose a challenge to the reliable operation of the regional power grid, create price volatility, and contribute to air emission increases.
IV. The high cost of electric rates, their volatility, the potential for supply disruption, and increased air emissions has a particularly adverse impact on New Hampshire's citizens and its economy.
V. It is in the best interests of all citizens of New Hampshire that the public utilities commission be directed and granted authority to consider and implement measures that are expected to mitigate the cost of electric service in the state, reduce the price volatility of that service, and/or reduce the potential for disruptions in electricity supply due to inadequate wholesale generating capacity in the New England marketplace.
2 Electric Utility Restructuring; Purpose. Amend RSA 374-F:1, I to read as follows:
I. The most compelling reason to restructure the New Hampshire electric utility industry is to reduce costs for all consumers of electricity [by harnessing the power of competitive markets]. The overall public policy goal of restructuring is to [develop a more efficient industry structure and regulatory framework that results in a more productive economy by reducing costs to consumers while maintaining safe and reliable electric service] reduce the cost of electricity without negatively impacting the reliable supply and delivery thereof with minimum adverse impacts on the environment. Increased customer choice and the development of competitive markets for wholesale and retail electricity services are key elements in a restructured industry that will require unbundling of prices and services and at least functional separation of centralized generation services from transmission and distribution services.
3 Electric Utility Restructuring; Definitions RSA 374-F:2, I is repealed and reenacted to read as follows:
I. "Centralized generation services" means electric generating stations, except for such facilities that qualify as "distributed energy resources" as defined in RSA 374-G: 2, I(b).
II. "Commission" means the public utilities commission.
III. "Default service" means electricity supply that is available to retail customers who are otherwise without an electricity supplier.
IV. "Electricity suppliers" means suppliers of electricity generation services and includes actual electricity generators and brokers, aggregators, and pools that arrange for the supply of electricity generation to meet retail customer demand, which may be municipal or county entities.
V. "FERC" means the Federal Energy Regulatory Commission.
VI. "Stranded costs" means costs, liabilities, and investments, such as uneconomic assets, that electric utilities would reasonably expect to recover if the existing regulatory structure with retail rates for the bundled provision of electric service continued and that will not be recovered as a result of restructured industry regulation that allows retail choice of electricity suppliers, unless a specific mechanism for such cost recovery is provided. Stranded costs may only include costs of:
(a) Existing commitments or obligations incurred prior to the effective date of this chapter;
(b) Renegotiated commitments approved by the commission;
(c) New commitments approved by the commission;
(d) Costs approved for recovery by the commission in connection with the divestiture or retirement of Public Service Company of New Hampshire generation assets pursuant to RSA 369-B:3-a; and
(e) All costs incurred as a result of fulfilling employee protection obligations pursuant to RSA 369-B:3-b.
VII. "Transition service" means electricity supply that is available to existing retail customers prior to each customer's first choice of a competitive electricity supplier and to others, as deemed appropriate by the commission.
4 Electric Utility Restructuring; Restructuring Policy Principles; System Reliability. Amend RSA 374-F:3, I to read as follows:
I. System Reliability. Reliable electricity service must be maintained while ensuring public health, safety, and quality of life. Electric utilities may pursue measures that are expected to mitigate the cost of electric service in the state, reduce the price volatility of that service, and/or reduce the potential for disruptions in electricity supply due to inadequate wholesale generating capacity in the New England marketplace, subject to the commission's determination that such measures are in the public interest.
5 Electric Utility Restructuring; Restructuring Policy Principles; Regulation and Unbundling of Services and Rates. Amend RSA 374-F:3, III to read as follows:
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. Centralized 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 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.
6 Electric Utility Restructuring; Restructuring Policy Principles; Near Term Relief. Amend RSA 374-F:3, XI to read as follows:
XI. Near Term Rate Relief. The goal of restructuring is to create competitive markets that are expected to produce lower prices for all customers than would have been paid under the current regulatory system. Given New Hampshire's higher than average regional prices for electricity, utilities, in the near term, should work to reduce rates for all customers. To the greatest extent practicable, rates should approach competitive regional electric rates. The state should recognize when state policies impose costs that conflict with this principle and should take efforts to mitigate those costs. The unique New [Hampshire] England issues contributing to [the highest] high prices [in New England] should be addressed during the transition, wherever possible to mitigate such high prices, price volatility, and the potential for supply disruptions due to deficiencies in electric generating capacity.
7 Electric Utility Restructuring; Restructuring Policy Principles; Regionalism. Amend RSA 374-F:3, XIII to read as follows:
XIII. Regionalism. New England Power Pool (NEPOOL) should be reformed and efforts to enhance competition and to complement industry restructuring on a regional basis should be encouraged. New Hampshire should work with other New England and northeastern states to accomplish the goals of restructuring to address the high and volatile price of electricity, and to ensure an adequate supply of electric generating capacity. Working with other regional states, New Hampshire should assert maximum state authority over the entire electric industry restructuring process. While it is desirable to design and implement a restructured industry in concert with the other New England and northeastern states, New Hampshire should not unnecessarily delay its timetable. Any pool structure adopted for the restructured industry should not preclude bilateral contracts with pool and non-pool services and should not preclude ancillary pool services from being obtained from non-pool sources.
8 Effective Date. This act shall take effect 60 days after its passage.