Revision: April 6, 2018, 2:44 p.m.
SB 577 - AS AMENDED BY THE SENATE
03/08/2018 0721s
03/08/2018 0884s
2018 SESSION
18-2889
10/06
SENATE BILL 577
SPONSORS: Sen. Bradley, Dist 3; Sen. Woodburn, Dist 1; Sen. Giuda, Dist 2; Sen. Avard, Dist 12; Rep. Theberge, Coos 3; Rep. Y. Thomas, Coos 3; Rep. Chandler, Carr. 1
COMMITTEE: Energy and Natural Resources
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AMENDED ANALYSIS
This bill:
I. Requires the public utilities commission to initiate a proceeding to consider changes to its order affecting the Burgess BioPower plant in Berlin.
II. Prohibits the import of certain liquid fuels and prohibits the sale of such fuels in 2019.
III. Changes the inclusion in electric renewable energy class I for methane gas.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
03/08/2018 0721s
03/08/2018 0884s 18-2889
10/06
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:
1 Findings. The general court finds that the continued operation of the Burgess BioPower plant in Berlin is important to the economy of the north country and the city of Berlin, as well as the forest products industry, and important for the attainment of renewable energy portfolio standard goals and the environment, and is therefore in the public interest.
2 Public Utilities Commission; Proceedings. Within 30 days after the effective date of this act, the public utilities commission shall initiate a proceeding in order to consider how it is in the public interest to revise its Order 25,213 (Docket DE 10-195). The commission shall consider whether it is in the public interest to increase the amount of the cap on the level of the cumulative reduction factor, or to make other adjustments or revisions to the order, so that the Burgess BioPower plant can continue to operate. When considering the best way to meet the public interest the commission shall consider the impact the potential closing of, or the reduced capacity at, Burgess BioPower could have upon jobs at the plant and in the forest products industry, property tax and other impacts on the city of Berlin, renewable energy resources in New Hampshire, the impact on Eversource ratepayers, and other such factors the commission deems appropriate.
3 Sulphur Limits; Import Prohibited. Amend RSA 125-C:10-d to read as follows:
125-C:10-d Sulfur Limits of Certain Liquid Fuels.
I. No person shall import into the state any of the following liquid fuels:
(a) No. 2 oil, also referred to as distillate oil, with a sulfur content greater than 0.0015 percent by weight;
(b) No. 4 oil with a sulfur content greater than 0.25 percent by weight; or
(c) Nos. 5 or 6 oil, also referred to as residual oil, with a sulfur content greater than 0.5 percent by weight.
II. Beginning on February 1, 2019 and continuing thereafter, no person shall sell, offer for sale, supply, distribute for sale or use, except for fuel remaining in storage for a device not requiring a permit pursuant to RSA 125-C:11, any of the following liquid fuels:
(a) No. 2 oil, also referred to as distillate oil, with a sulfur content greater than 0.0015 percent by weight;
(b) No. 4 oil with a sulfur content greater than 0.25 percent by weight; or
(c) Nos. 5 or 6 oil, also referred to as residual oil, with a sulfur content greater than 0.5 percent by weight.
[II] III. The commissioner may temporarily allow the use of non-conforming fuels with respect to paragraph [I] II if there is a demonstrated need to do so based on an acute shortage of supply.
4 Electric Renewable Energy Classes; Useful Thermal Energy. Amend RSA 362-F:4, I(e) to read as follows:
(e) Methane gas if the methane gas energy output is in the form of useful thermal energy provided that the unit began operation after January 1, 2013.
I. Section 3 of this act shall take effect 12:01 a.m. July 1, 2018.
II. Section 4 of this act shall take effect 60 days after its passage.
III. The remainder of this act shall take effect upon its passage.
18-2889
Amended 4/6/18
SB 577- FISCAL NOTE
AS AMENDED BY THE SENATE (AMENDMENTS #2018-0721s and #2018-0884s)
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 | $0 | $0 | $0 | $0 |
Expenditures | Indeterminable | Indeterminable | Indeterminable | Indeterminable |
Funding Source: | [ X ] General [ ] Education [ X ] Highway [ X ] Other - Various Governmental Funds | |||
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COUNTY: |
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Revenue | $0 | $0 | $0 | $0 |
Expenditures | Indeterminable | Indeterminable | Indeterminable | Indeterminable |
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LOCAL: |
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Revenue | $0 | $0 | $0 | $0 |
Expenditures | Indeterminable | Indeterminable | Indeterminable | Indeterminable |
METHODOLOGY:
The Public Utilities Commission (PUC) indicates sections 1 and 2 of the bill concerning the Burgess BioPower plant (Burgess) instruct the PUC to consider whether to raise the level of the cumulative reduction factor in the contract between Eversource and Burgess. If the cumulative reduction factor were higher it would allow Burgess to continue to charge Eversource for its output which would increase Eversource's costs related to the contract. Because the costs of the Burgess contract are paid by Eversource customers, if such an increase occurred it would increase costs to customers above the $100 million cap on the energy component of the current contract. To the extent that the state, county and local governments are Eversource ratepayers, increasing the cumulative reduction fund would increase their electricity bills as all over-market costs associated with the contract are recovered through the stranded cost reduction charge. Because it is not possible to know the outcome of a future PUC docket, such increases are speculative and therefore the impact on costs is indeterminable. If the PUC were to raise the cumulative reduction factor, it could potentially allow the Burgess plant to operate longer than under the current contract. Increased operation would likely increase plant value and potentially increase local tax revenues. Because such an increase in tax revenues is speculative, the effect on local revenues is indeterminable.
The PUC states section 4 of the bill clarifies that certain methane gas energy output may qualify as useful thermal energy and be eligible for renewable energy certificates under RSA 362-F. Eligible facilities using methane gas to produce useful thermal energy would create Class I Thermal renewable energy certificates (RECs), thereby increasing the supply of Class I Thermal renewable energy certificates. That increase in Class I Thermal REC supply would help New Hampshire meet its renewable portfolio standard goals and could put downward pressure on Class I Thermal REC prices. REC prices are included in electricity rates, and therefore impact the costs to state, county and local governmental units, to the extent they are electricity consumers. The amount of these cost impacts are indeterminable.
The Department of Environmental Services indicates section 3 of the bill prohibits the import of certain liquid fuels and prohibits the sale of such fuels in 2019. It is the Department’s understanding, based on information from fuel suppliers, there would be no significant price differential once low sulfur fuel was implemented throughout the northeast region, which will happen in July 2018.
AGENCIES CONTACTED:
Public Utilities Commission and Department of Environmental Services