Revision: April 8, 2019, 5:34 p.m.
HB 365 - AS AMENDED BY THE HOUSE
20Mar2019... 0973h
2019 SESSION
19-0090
06/08
HOUSE BILL 365
AN ACT relative to net energy metering limits for customer generators.
SPONSORS: Rep. Moffett, Merr. 9; Rep. Backus, Hills. 19; Rep. Suzanne Smith, Graf. 8; Rep. P. Schmidt, Straf. 19; Rep. Danielson, Hills. 7; Rep. Wolf, Merr. 5; Rep. McWilliams, Merr. 27; Rep. O'Connor, Rock. 6; Rep. Hennessey, Graf. 1; Sen. Bradley, Dist 3
COMMITTEE: Science, Technology and Energy
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ANALYSIS
This bill increases the electric generating capacity of customer generators who may participate in net energy metering and modifies the transition of tariffs applicable to certain customer-generators. The bill also clarifies the definition of eligible customer-generator for purposes of the utility property tax.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
20Mar2019... 0973h 19-0090
06/08
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Nineteen
AN ACT relative to net energy metering limits for customer generators.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Findings. The general court finds that:
I. New Hampshire’s electricity consumers, including municipalities, manufacturers, commercial businesses, and other large users, strongly support more competitive retail options to lower their energy costs.
II. These same consumers deserve the freedom to invest their own capital to become more self-sufficient and energy independent and less reliant on out-of-state electricity companies that control our high electricity rates.
III. ISO-New England, Inc., the independent, nonprofit regional transmission organization 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 increases and volatility, and contribute to increased air emissions, all of which would adversely impact New Hampshire's citizens, businesses, and economy.
IV. The current size limit of one megawatt on customer-generators that may participate in net energy metering is an unnecessary barrier that denies larger electricity users the same rights that smaller users already have to produce and use local renewable power that reduces their energy costs, increases supply, and insulates all New Hampshire ratepayers from electric price volatility and higher transmission costs.
V. The current size limit is also a barrier to significant investment in existing and new small renewable energy projects, which would help keep our energy dollars in-state, drive economic activity, support good-paying jobs, and increase state and local business and property tax revenues.
VI. The federal Public Utility Regulatory Policies Act (PURPA) as amended by the Energy Policy Act of 2005 calls upon states to consider the adoption and implementation of net metering policies. PURPA as amended states that electricity generated by an eligible on-site generating facility may be used to offset electric energy provided by the electric utility, and allows states to define an eligible facility. Furthermore, under ISO New England’s rules, a generating facility of less than 5 megawatts that is connected to the distribution grid is not required to register with ISO New England as a generator or participate in the wholesale energy markets; rather, if the generating facility elects not to register as a wholesale market participant or retires from such status, the customer generator is to be treated by ISO New England as a retail load reducer.
VII. It is therefore in the best interests of all citizens of New Hampshire that the size limit on customer-generators that may participate in net energy metering and serve as retail load reducers be increased from one megawatt to up to but not including 5 megawatts to increase customer supply choice, foster a more robust retail market for local renewable energy, help mitigate the cost of electric service in the state, reduce the price volatility of that service, and reduce the potential for disruptions in electricity supply due to inadequate wholesale generating capacity in the New England marketplace.
2 Definition; Customer-generator. Amend RSA 362-A:1-a, II-b to read as follows:
II-b. "Eligible customer-generator'' or "customer-generator'' means an electric utility customer who owns, operates, or purchases power from an electrical generating facility either powered by renewable energy or which employs a heat led combined heat and power system, with a [total peak generating] nameplate or maximum rated capacity of [up to and including one megawatt,] less than 5 megawatts and that is located behind a retail meter on the customer's premises, is interconnected and operates in parallel with the electric grid, and is used to offset the customer's own electricity requirements. Incremental generation added to an existing generation facility, that does not itself qualify for net metering, shall qualify if such incremental generation meets the qualifications of this paragraph and is metered separately from the non qualifying facility.
3 Net Energy Metering; Net Effects. Amend RSA 362-A:9, VII to read as follows:
VII.(a) A distribution utility may perform an annual calculation to determine the net effect this section had on its default service and distribution revenues and expenses in the prior calendar year. The method of performing the calculation and applying the results, as well as a reconciliation mechanism to collect or credit any such net effects with appropriate carrying charges and credits applied, shall be determined by the commission.
(b) For the purposes of accounting for any exports to the distribution grid by customer-generators, such exports shall be treated as offsets or reductions to retail load, within the same billing or rate time period, resulting in a reduction of the wholesale load obligation of each customer-generator's electricity supplier.
(c) A generator with a nameplate or maximum rated capacity of less than 5 megawatts that first became operational before July 1, 2019 and that has outstanding capacity commitments in the forward capacity market administered by ISO New England may elect to become a customer-generator, participate in net metering, and be treated as a retail load reducer provided that it undertakes the process of retiring from participation in wholesale energy markets administered by ISO New England by:
(1) Ceasing participation in such energy markets such as by receipt of payments for energy generation;
(2) Transferring to the customer-generator’s electricity supplier, which may be the electric distribution utility providing default energy service, any payments received or due from ISO New England that are attributable to fulfillment of the generator’s capacity commitment until such capacity commitments are fulfilled or otherwise retired; and
(3) Completing the process of retiring from wholesale energy and capacity markets administered by ISO New England once any such capacity commitments that were outstanding at the time the generator elected to become a customer-generator participating in net metering are fulfilled or otherwise retired.
(d) Any provisions of settlement agreements or orders that have been approved or issued by the commission that relate to a distribution utility’s treatment of the output from qualifying facilities or independent power producers shall not apply to the output from an eligible customer-generator participating in net metering.
4 Net Energy Metering; Transition of Tariffs. Amend RSA 362-A:9, XV to read as follows:
XV. Standard tariffs that are available to eligible customer-generators under this section shall terminate on December 31, 2040 and such customer-generators shall transition to tariffs that are in effect at that time. Alternative tariffs shall be applicable and have such grandfathering provisions as may be approved or adopted by the commission under this section. Customer generators with a nameplate or maximum rated capacity of more than one megawatt and less than 5 megawatts that are eligible for net metering before the commission adopts tariffs specifically for customer generators with a capacity of more than one megawatt shall:
(a) Be eligible to receive the export credit rate approved by the commission in Order No. 26,029 (DE 16-576) for one megawatt sized customer generators on default service, namely, the applicable default energy service rate.
(b) Be grandfathered under the terms of the currently-applicable tariff for customer-generators with a capacity of one megawatt if the customer generator's electrical generating facility first becomes operational on or after July 1, 2019.
(c) Transition to such new tariffs as are specifically approved by the commission for customer-generators with a nameplate or maximum rated capacity of more than one megawatt if the customer-generator's electrical generating facility first became operational before July 1, 2019.
5 Utility Property Tax; Definition of Eligible Customer-Generator; Exclusion Clarified. Amend RSA 83-F:1, V(d) to read as follows:
(d) The electrical generation, production, and supply equipment of an "eligible customer-generator" as defined in RSA 362-A:1-a, II-b, up to and including one megawatt;
6 Effective Date. This act shall take effect 60 days after its passage.
19-0090
Amended 4/3/19
HB 365- FISCAL NOTE
AS AMENDED BY THE HOUSE (AMENDMENT #2019-0973h)
AN ACT relative to net energy metering limits for customer generators.
FISCAL IMPACT: [ X ] State [ X ] County [ X ] Local [ ] None
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STATE: | FY 2020 | FY 2021 | FY 2022 | FY 2023 |
Appropriation | $0 | $0 | $0 | $0 |
Revenue | $0 | $0 | $0 | $0 |
Expenditures | Indeterminable | Indeterminable | Indeterminable | Indeterminable |
Funding Source: | [ X ] General [ ] Education [ ] 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 indicates there are approximately 74 MW of generating facilities in NH that could be eligible to net meter under this bill. Hydro-electric generation accounts for over 50 MW of that installed generation. The balance includes landfill gas, solar, and wood/biomass facilities. The PUC states it is difficult to estimate how much of the current generation would become customer-generators or how much new generation will be built. The bill's provision to treat exports by customer generators as offsets or reductions to load could mitigate some impacts of the customer-generators receiving default service pricing for their output which currently is about $40/MWh higher on average than the NH locational marginal price they currently are paid for their output. The increase in the payments for output for eligible customer-generators could range from $5 million to $10 million annually depending upon market prices and default service rates, however, some of the increased energy payments could also be offset by those projects now entitled to capacity payments which would be transferred to the electric distribution utility or to a competitive supplier.
Based on the uncertainty associated with the bill's impact on market behavior, the effect on electric rates and therefore on state, county and local government expenditures is indeterminate.
AGENCIES CONTACTED:
Public Utilities Commission