Bill Details - HB715 (2019)

HB 715-FN - AS INTRODUCED

 

 

2019 SESSION

19-0764

06/10

 

HOUSE BILL 715-FN

 

AN ACT relative to electrical energy storage.

 

SPONSORS: Rep. Oxenham, Sull. 1; Rep. Moffett, Merr. 9; Rep. Cushing, Rock. 21

 

COMMITTEE: Science, Technology and Energy

 

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ANALYSIS

 

This bill establishes target goals for energy storage capacity.  The bill also requires the public utilities commission to adopt rules to achieve the target goals.

 

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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

19-0764

06/10

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Nineteen

 

AN ACT relative to electrical energy storage.

 

Be it Enacted by the Senate and House of Representatives in General Court convened:

 

1  Findings; Public Utilities; Energy Storage.  Energy storage has the potential to increase the utilization of renewable energy in New Hampshire and improve the state’s fuel diversity portfolio, while reducing New Hampshire families’ and businesses’ over dependence on natural gas and minimizing their exposure to volatile natural gas prices.  Enabling greater use of renewable energy reduces air pollution, including both toxic chemicals and particulate matter, thereby lessening the electricity system’s negative impacts on both public health and environmental quality.  Innovative technologies like energy storage can also stimulate investment and employment in the state, thereby making a positive contribution to New Hampshire’s economy.  Energy storage also has the potential to significantly reduce New Hampshire’s effective peak demand for electricity.  Reducing peak electricity demand is in the public interest because such demand disproportionately drives New Hampshire families’ and businesses’ energy cost burden.  Electric system reliability requires the transmission and distribution system to be built out to meet peak demand, with the result that ratepayers must often pay for system expansions and upgrades that will lie idle the vast majority of the year.  Furthermore, the generation units that grid operators call on to meet peak demand are generally the most inefficient and thus the most expensive units.  Such generation units also tend to be the most polluting, and thus account for a disproportionate share of the electricity system’s negative public health and environmental impacts.  For all these reasons, the general court finds it is in the public interest to stimulate the deployment of energy storage in New Hampshire.

2  New Chapter; Energy Storage.  Amend RSA by inserting after chapter 374-G the following new chapter:

CHAPTER 374-H

ENERGY STORAGE

374-H:1  Definitions.  In this chapter:

I.  "Commission" means the public utilities commission.

II.  “Behind-the-meter storage” means an energy storage project that is installed on a retail electricity customer's premises and is electrically connected to the customer's side of the electric utility meter.

III.  “Bring your own device” means a program for encouraging non-utility owned, and especially retail-customer owned, behind-the-meter energy storage to provide the greatest value possible to the electricity system, particularly in terms of peak reduction and avoided transmission and distribution costs.  Such a program shall compensate participating behind-the-meter energy storage for the value it provides to the electricity system.

IV.  "Energy storage" means batteries, flywheels, compressed air energy systems, sensible heat storage or any other technology, system, or device capable of taking electricity and storing it as some form of energy the technology, system, or device can either convert back into electricity or use to displace an electrical load at a later time.  Such term shall include standalone technologies, systems, and devices, as well as those co-located with or incorporated into a renewable energy source.

V.  "Energy storage project" means an individual energy storage system or an aggregation of multiple energy storage systems.

VI.  "ISO-New England" means the Independent System Operator New England or any successor entity.

VII.  "Non-utility" means any entity that is not a utility that develops, builds, owns, operates, or assists in the operation of one or more energy storage projects.

VIII.  "Peak demand" means the total, combined annual coincident peak energy demand of all utility service territories in New Hampshire.

IX.  "Regional network service" means the term as defined in ISO-New England's transmission, markets and services tariff, section II.

X.  "Renewable energy source" means a Class I, Class II, or Class IV renewable energy source as defined in RSA 362-F:4.

XI.  "Utility" means any entity that distributes electricity to retail customers or owns part of the electrical transmission system in New Hampshire.

XII.  "Wholesale electricity markets" means any energy, capacity, or ancillary service market that ISO-New England operates.

374-H:2  Energy Storage Targets.

I.  The commission shall ensure sufficient energy storage capacity is deployed on the electricity system to reduce the peak demand by 2 percent when discharging coincidentally, by December 31, 2022.  The commission shall measure this reduction by using the 2018 peak demand as a baseline.  In order to achieve this target, the commission shall create programs and tariffs, or tariff riders, that enable energy storage to be compensated for services it provides.

II.  Within one year of the effective date of this paragraph, the commission shall initiate a proceeding to determine if a higher energy storage target than that set established in paragraph I would provide net benefits to ratepayers.  This proceeding shall consider:

(a)  Energy costs that energy storage projects might avoid, including but not limited to potential reductions in ISO-New England energy and capacity market clearing prices.

(b)  Transmission and distribution costs that energy storage projects might avoid, including but not limited to deferring or avoiding the need for new transmission or distribution infrastructure as well as reducing regional network service charges.

(c)  Any potential ability energy storage projects might have to reduce electricity price volatility.

(d)  Any potential grid reliability and resiliency benefits energy storage projects might provide.

(e)  Any environmental or renewable portfolio standard compliance costs energy storage might help avoid or reduce through such means as enabling more cost-effective renewable energy integration, reducing emissions from less efficient peaking power plants, and reduced cycling at thermal power plants.

(f)  The likely cost to ratepayers of a higher target.

(g)  Any other benefit the commission deems relevant.

III.  The commission shall complete the proceeding under paragraph II no later than December 31, 2022.

IV.  If the commission, following the proceeding under paragraph II, finds a higher target than the one specified in paragraph I would provide net benefits to ratepayers, it shall raise the target to up to 15 percent of peak demand.

(a)  The commission shall establish a compliance time line for the higher target to ensure that it is reached by December 31, 2030.  The compliance time line shall also require that energy storage projects reduce peak demand by at least an additional one percent per year above the paragraph I target following December 31, 2022, up to the full target.

(b)  Nothing in this paragraph shall affect the compliance time line paragraph I establishes for the initial target.

374-H:3  Target Implementation.

I.  Within one month of the effective date of this paragraph, the commission shall adopt rules relative to programs and tariffs or tariff riders, or both, that implement the provisions of this chapter.  The commission shall determine the amount of megawatts of power and megawatt-hours of energy storage capacity needed to reduce peak demand by 2 percent.  The commission shall complete this rulemaking proceeding no later than one year after the effective date of this paragraph.

II.  Subject to paragraph V, the commission's regulations shall ensure non-utilities develop and own at least 1/2 of the energy storage capacity RSA 374-H:2 requires, and excluding the pilot program considered in public utilities commission docket DE 17-189, that utilities shall not own behind-the-meter storage.

(a)  The commission's regulations shall create a preference for non-utility energy storage projects that avoid or reduce transmission and distribution costs.  Such avoided or reduced costs shall include, but are not limited to, deferring the need for new distribution and transmission infrastructure or reducing the utility's regional network service charges.

(b)  Notwithstanding any provision of RSA 374-F or RSA 374-G, the rules shall require a utility to compensate a non-utility for the value of all transmission or distribution costs the utility will likely avoid because of the energy storage project.  If the non-utility energy storage project avoids the need for a new distribution or transmission project the utility could have added to its rate base, the commission may allow the utility to include all or part of the value of the corresponding portion of its payment to the non-utility in its rate base.  However, the commission may allow this only if it finds doing so is just and reasonable.

(1)  The commission shall create a state-wide “bring your own device” peak reduction program for behind-the-meter energy storage projects.  As part of this program, the commission shall create special tariffs or other mechanisms, including but not limited to time-of-use rates that ensure utilities compensate such projects for their peak reduction value, as well as the value of all transmission or distribution costs the utility will likely avoid because of such projects.

(2)  The commission may also create such special tariffs, or other mechanisms, including but not limited to, time-of-use rates or time-based tariffs for front-of-the-meter, non-utility energy storage projects.  The amount and manner of compensation front-of-the-meter, non-utility energy storage projects receive may also be determined on a case-by-case basis.  The commission may also choose to create such special tariffs or other mechanisms for front-of-the-meter, non-utility energy storage projects below a certain size, and determine compensation on a case-by-case basis for projects above that size.

(c)  Notwithstanding any provision of RSA 374-F or RSA 374-G, if a non-utility energy storage project is not eligible to participate in wholesale electricity markets, the commission's regulations shall require a utility to compensate the non-utility for any energy costs the utility is likely to avoid because of the energy storage project.

III.  Notwithstanding any provision of RSA 374-F or RSA 374-G, the commission's regulations shall also provide that a utility may develop and own energy storage projects that reduce transmission or distribution costs, as long as it is not sited behind a customer meter beyond any pilot project already approved by the commission.

(a)  A utility may contractually sell the right to bid such utility-owned energy storage projects into wholesale electricity markets to a non-utility.  Any such contract shall provide that the non-utility shall retain any wholesale market revenue the energy storage project earns, and bear all risk of project underperformance in the wholesale market.

(b)  The utility shall use all compensation a non-utility pays the utility for the contractual right under subparagraph (a) to reduce retail electricity rates.

(c)  A utility may not give a contractual right under subparagraph (a) to a non-utility that is an affiliate of the utility.

IV.  If the commission finds that non-utilities are capable of developing more than 1/2 of the energy storage capacity required to meet a target under RSA 374-H:2, the commission shall give a preference to such non-utility energy storage projects over utility energy storage projects.

V.  If the commission finds that a non-utility cannot develop enough energy storage projects to meet its share of a target under RSA 374-H:2, the commission shall allow such utility to develop and own whatever additional number of energy storage projects are needed to meet such target.  Under these circumstances, the commission may allow utilities to develop and own behind-the-meter storage projects if it finds such projects necessary.

VI.  Nothing in this section shall give a utility the right to bid any energy storage project it owns into wholesale electricity markets itself, or to otherwise directly participate in wholesale electricity markets.

3  Effective Date.  This act shall take effect 60 days after its passage.

 

LBAO

19-0764

Revised 2/15/19

 

HB 715-FN- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to electrical energy storage.

 

FISCAL IMPACT:      [ X ] State              [ X ] County               [ X ] Local              [    ] None

 

 

 

Estimated Increase / (Decrease)

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            [ X ] Highway           [ X ] Other - Various Government Funds

 

 

 

 

 

COUNTY:

 

 

 

 

   Revenue

$0

$0

$0

$0

   Expenditures

Indeterminable

Indeterminable

Indeterminable

Indeterminable

 

 

 

 

 

LOCAL:

 

 

 

 

   Revenue

$0

$0

$0

$0

   Expenditures

Indeterminable

Indeterminable

Indeterminable

Indeterminable

 

METHODOLOGY:

The Public Utilities Commission states the effect of this bill on electric rates is indeterminate. The fiscal impact will depend upon the peak reduction targets, the amount of storage needed to meet those targets and how effectively the installed storage reduces peak loads and meets other potential storage benefits, such as avoiding or deferring transmission and distribution system upgrades.  Proposed RSA 374-H:3 II(b) states that the Commission's rules must "require a utility to compensate a non-utility for the value of all the transmission and distribution cost the utility will likely avoid because of the energy storage project.  If the non-utility energy storage project avoids the need for a new distribution or transmission project the utility could have added to its rate base, the commission may allow the utility to include all or part of the value of the corresponding portion of its payment to the non-utility in its rate base." That provision has the potential to negate any ratepayer savings and, depending on whether and how much the Commission would allow the utility to recover through its rates, could result in added costs to ratepayers, including state, county, and local governments. The potential added costs would include the full amount paid to the non-utility associated with the avoided transmission and distribution costs plus additional amounts recovered by the utility for an avoided project that it never had to construct.

 

The bill also requires the development of time-of-use rates, which will require both PUC staff and utility resources; however, the PUC has not estimated a cost for that work. The bill also will require a system to notify customers of required energy storage system discharge times.  In addition, some costs will be incurred in connection with the need to communicate with the storage devices.  These additional costs are not known at this time.

 

AGENCIES CONTACTED:

Public Utilities Commission

 

Docket

Date Status
Jan. 3, 2019 Introduced 01/03/2019 and referred to Science, Technology and Energy HJ 3 P. 27
Feb. 13, 2019 Public Hearing: 02/13/2019 02:30 pm LOB 304
March 6, 2019 Full Committee Work Session: 03/06/2019 10:00 am LOB 304
March 6, 2019 ==RECESSED== Executive Session: 03/06/2019 10:30 am LOB 304
March 13, 2019 Full Committee Work Session: 03/13/2019 09:00 am LOB 304
March 13, 2019 ==CONTINUED== Executive Session: 03/13/2019 10:00 am LOB 304
March 19, 2019 Majority Committee Report: Ought to Pass with Amendment # 2019-0742h for 03/19/2019 (Vote 10-8; RC) HC 16 P. 35
Majority Committee Report: Ought to Pass with Amendment # 2019-0742h (Vote 10-8; RC)
Minority Committee Report: Inexpedient to Legislate

Action Dates

Date Body Type
Feb. 13, 2019 House Hearing
March 6, 2019 House Exec Session
March 13, 2019 House Exec Session
March 13, 2019 House Exec Session
House Floor Vote
March 19, 2019 House Floor Vote

Bill Text Revisions

HB715 Revision: 5049 Date: Feb. 19, 2019, 9:47 a.m.