Revision: Dec. 12, 2017, 1:24 p.m.
SB 365 - AS INTRODUCED
2018 SESSION
18-2720
10/08
SENATE BILL 365
AN ACT relative to default service energy diversity and rate relief.
SPONSORS: Sen. Innis, Dist 24; Sen. Avard, Dist 12; Sen. Bradley, Dist 3; Sen. Fuller Clark, Dist 21; Sen. Sanborn, Dist 9; Sen. Giuda, Dist 2; Sen. Ward, Dist 8; Sen. Kahn, Dist 10; Sen. Feltes, Dist 15; Rep. Shepardson, Ches. 10; Rep. Backus, Hills. 19
COMMITTEE: Energy and Natural Resources
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ANALYSIS
This bill provides for the solicitation of renewable electricity generation supply as part of the periodic solicitation of default energy service by the state’s electric distribution companies.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
18-2720
10/08
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eighteen
AN ACT relative to default service energy diversity and rate relief.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Chapter; Default Service Energy Diversity and Rate Relief. Amend RSA by inserting after chapter 362-G the following new chapter:
CHAPTER 362-H
DEFAULT SERVICE ENERGY DIVERSITY AND RATE RELIEF
362-H:1 Purpose. New Hampshire and New England electricity supply is heavily dependent on electricity generated by the combustion of natural gas, which given the vagaries of weather and weather-induced delivery constraints can be a price-volatile source of electricity. This volatile pricing can adversely affect electricity consumers in the state because the state’s electric distribution companies procure their supply of default energy service in the regional electricity marketplace and the resulting default energy service prices are subject to volatility due to the effect of natural gas generation on that supply. The state’s renewable electricity generators are also adversely affected by the region’s reliance on natural gas generation and the resulting price volatility because their electrical sales occur in the regional market where natural gas generation sets the price. Times of low natural gas pricing can force the closure of these facilities and the loss of jobs and other statewide economic benefits resulting from these facilities. Closure of renewable generation can leave the state and region even more dependent on electricity from natural gas-fired generation. Incorporating the use of renewable generation in the default energy procurement process at a discount from default energy rates can increase the certainty of diversity in the generation mix, reduce the state’s dependence on natural gas-generated electricity, provide electricity cost savings to default service customers, and insure the continuation of the jobs and economic benefits obtained from renewable generation in the state. It is therefore in the public interest to provide for the solicitation of renewable electricity generation supply as part of the periodic solicitation of default energy service by the state’s electric distribution companies.
362-H:2 Definitions. In this chapter:
I. “Adjusted energy rate-firm” means 95 percent of the default energy rate after being adjusted by reduction of the rate component for compliance with the renewable energy portfolio standards law, RSA 362-F.
II. “Adjusted energy rate-non-firm” means 90 percent of the default energy rate after being adjusted by reduction of the rate component for compliance with the renewable energy portfolio standards law, RSA 362-F.
III. "Biomass'' means plant-derived fuel including clean and untreated wood such as brush, stumps, lumber ends and trimmings, wood pallets, bark, wood chips or pellets, shavings, sawdust and slash, agricultural crops, biogas, or liquid biofuels, but shall exclude any materials derived in whole or in part from construction and demolition debris.
IV. “Commission” means the public utilities commission.
V. “Default energy rate” means the default service energy rates applicable to residential class customers, approved by the commission from time to time, and which are available to retail electric customers who are otherwise without an electricity supplier.
VI. “Default service” means electricity supply that is available to retail customers who are otherwise without an electricity supplier as defined in RSA 374-F:2, I-a.
VII.(a) “Eligible facility” means any facility which produces electricity by the use, as a primary energy source, of biomass, municipal solid waste, wind, solar, or hydroelectric resources or any combination thereof; provided that: (1) the facility’s power production capacity is not greater than 25 megawatts, excluding station service needs, (2) the facility is interconnected with an electric distribution or transmission system located in New Hampshire, and (3) the facility began operation prior to January 1, 2006, or if the facility ceased operation and then later returned to service after that date, then prior to January 1, 2006 the facility operated for at least 5 years.
(b) "Eligible facility" shall not include: (1) any energy output engaged in net energy metering under RSA 362-A or any similar law, (2) any facility, while selling its electrical output at long-term rates established before January 1, 2007 by orders of the commission under RSA 362-A:4, and (3) any hydroelectric facility that is the subject of divestiture in commission docket DE 17-124.
VIII. “Firm energy” means the amount of energy, measured in megawatt-hours or kilowatt- hours, to be delivered without interruption by or on behalf of the eligible facility pursuant to the schedule submitted to the electric distribution company by the eligible facility.
IX. “Hub” means the Massachusetts hub node used to establish a reference price for electric energy purchases and the transfer of day-ahead adjusted load obligations and real-time adjusted load obligations as defined by the Independent System Operator-New England.
X. “Non-firm energy” means the amount of energy, measured in megawatt-hours or kilowatt- hours, to be delivered by or on behalf of the eligible facility, which may vary or be interrupted depending on the operation of the eligible facility.
XI. “Primary energy source'' means a fuel or fuels, or energy resource either singly or in combination, that comprises at least 90 percent of the total energy input into a generating unit. A fuel or energy source other than the primary fuel or energy source may be used only for start-up, maintenance, or other required internal needs of the facility.
362-H:3 Default Service Short-Term Purchased Power Agreements. Each electric distribution company that is subject to the commission’s approval regarding procurement of default service shall offer to purchase the net energy output of any eligible facility located in its service territory as part of the distribution company’s procurement of default service in accordance with the following:
I. Prior to each solicitation of its default service supply, each such electric distribution company shall solicit proposals, in one solicitation or multiple solicitations, from eligible facilities. As a result of such solicitations the commission may direct the electric distribution companies to enter into power purchase agreements for energy, and capacity, or any combination thereof, for periods coterminous with the period of time used in the default service supply solicitation. Any such agreement shall be subject to review and approval by the commission in the same proceeding in which it undertakes the review and approval of the electric distribution company’s periodic default service solicitation and resulting rates. The commission shall issue a decision on such agreements at the same time it issues a decision on the default service solicitation and resulting rates.
II. The electric distribution company’s solicitation to eligible facilities shall inform eligible facilities of the opportunity to submit a legally binding request to sell an amount of firm or non-firm energy and capacity output to the electric distribution company for use as part of its default service. Sales of firm energy shall be priced at the adjusted energy rate-firm and non-firm energy shall be priced at the adjusted energy rate-non-firm, each such rate based on the default service rates approved by the commission in the applicable default service supply solicitation and resulting rates proceeding. The proposal shall state the term, the date for submission of responses, require submission of a schedule of hourly net output amount during the term, and a statement of whether the schedule deliveries are firm or non-firm energy, and such other information as needed for the eligible facility to submit and the electric distribution company to evaluate the proposal.
III. The output of the eligible facility shall be delivered to the electric distribution company at the eligible facility’s interconnection point. The eligible facility must commit to first fulfill scheduled deliveries from the eligible facility’s net output and shall not replace its output with that of another unit; except other generation sources may be used for additional deliveries, if any, needed to fulfill an eligible facility’s firm energy scheduled delivery obligation in the event of an outage or other variance from the schedule. Such additional deliveries shall be delivered to the Hub.
IV. The costs incurred pursuant to purchases under this section shall be recovered by the electric distribution company in the same manner as recovery of default service charges. Such costs may include reasonable costs incurred by electric distribution companies pursuant to this section.
2 Effective Date. This act shall take effect 60 days after its passage.