Revision: May 25, 2018, 11:59 a.m.
SB 577 - VERSION ADOPTED BY BOTH BODIES
03/08/2018 0721s
03/08/2018 0884s
3May2018... 1677h
05/23/2018 2079EBA
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 reopen a proceeding to revise 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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.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
3May2018... 1677h
05/23/2018 2079EBA 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 energy infrastructure of the state of New Hampshire and important for the attainment of renewable energy portfolio standard goals of fuel diversity, capacity, and sustainability.
2 Public Utilities Commission; Proceedings; Authority to Amend Order. Notwithstanding any other provision of the law to the contrary, the public utilities commission shall reopen its Docket DE 10-195 and forthwith revise its Order No. 25,213 in the following manner:
I. Suspension of Operation of Cap. The public utilities commission shall amend its Order No. 25,213 (Docket DE 10-195) to suspend the operation of the cap on the cumulative reduction factor as set forth on page 97 of its Order for a period of 3 years from the date the operation of the cap would have otherwise taken effect.
II. During the proceedings the Burgess BioPower plant shall, upon request, make their cost and profitability records available to the public utilities commission, which records shall be exempt from public disclosure under RSA 91-A:5, IV.
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 July 1, 2018 at 12:01 a.m.
II. Section 4 of this act shall take effect 60 days after its passage.
III. The remainder of this act shall take effect July 1, 2018.
18-2889
Amended 5/15/18
SB 577- FISCAL NOTE
AS AMENDED BY THE HOUSE (AMENDMENT #2018-1677h)
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 deal with the Burgess BioPower plant in Berlin. In accordance with the bill, the PUC will reopen Docket DE 10-195 and revise Order No. 25,213 to suspend the $100 million cap on the cumulative reduction factor. Suspending the cap on the cumulative reduction factor for 3 years will increase rates as all over-market costs associated with the contract are recovered through the stranded cost reduction charge. Depending on market prices, the contract price in effect at the time and the operation of the Burgess BioPower facility, suspending the cap could result in $15 to $20 million per year in increased stranded costs to Eversource customers. If spread equally across all rate classes, the expected annual increase in stranded costs would add approximately 2.2 mills per kWh to rates; however, how much each customer class would pay is governed by the rate design of the 2015 Public Service Company of New Hampshire Restructuring and Rate Stabilization Agreement. The Agreement specifies that the largest class of Eversource customers will pay 5.75% of stranded costs, the GV class will pay 20%, the General Service class, Rate G, will pay 25%, the Residential class, Rate R, will pay 48.75% and the Outdoor Lighting class the remaining 0.50%. To the extent that the State, counties and local governments are Eversource ratepayers, they will experience an increase in rates. Using the rate design from the Agreement, the PUC estimates that effect of this bill on state, local and municipal customers will be an increase of approximately $5 per month to a Rate G customer account. The contract between PSNH and Burgess BioPower allows Burgess to sell up to 500,000 MWh per year to Eversource at energy prices determined by the contract. The PUC assumes that 500,000 MWh per year will be produced by Burgess and sold to Eversource and that the difference between the contract price for energy and the market price of that energy is $35 per MWh for each of the three years the cap in the cumulative reduction factor is suspended. The Rate G class makes up approximately 22% of retail sales so the 25% of increased stranded costs per year or $4,375,000, will result in a rate increase of $0.0025 per kWh. An average Rate G customer consumes approximately 1,900 kWh per month.
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 beginning 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