Revision: Dec. 3, 2019, 9:05 a.m.
HB 1429-FN - AS INTRODUCED
2020 SESSION
20-2307
10/06
HOUSE BILL 1429-FN
AN ACT relative to integrated distribution plans of energy utilities.
SPONSORS: Rep. McGhee, Hills. 40
COMMITTEE: Science, Technology and Energy
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ANALYSIS
This bill revises the requirements for, and the submission and evaluation of, integrated distribution plans established by energy utilities under the state's energy policy.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
20-2307
10/06
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty
AN ACT relative to integrated distribution plans of energy utilities.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Paragraph; Public Utilities; Office of the Consumer Advocate. Amend RSA 363:28 by inserting after paragraph III the following new paragraph:
III-a. The consumer advocate shall contract with an independent professional engineer, who shall provide assistance to the consumer advocate and other stakeholders with respect to participating in the integrated distribution planning process established pursuant to RSA 378:38, including but not limited to the assessment of alternatives to traditional utility investments in electric distribution equipment and pipelines.
2 New Hampshire Energy Policy; Integrated Distribution Plans; Submission of Plans by Utilities. Amend RSA 378:38 to read as follows:
378:38 Submission of Plans to the Commission.
I. Pursuant to the policy established under RSA 378:37, each electric and natural gas utility, under RSA 362:2, shall file [a least cost] an integrated [resource] distribution plan with the commission within[ 2 years of the commission's final order regarding the utility's prior plan, and in all cases within 5] 3 years of the filing date of the utility's prior plan. The purpose of an integrated distribution plan shall be to set forth the utility's strategy during the ensuing 3 years for advancing the policy established under RSA 378:37 by making capital investments at the lowest possible present-value life cycle cost. [Each such plan shall include, but not be limited to, the following, as applicable:
I. A forecast of future demand for the utility's service area.
II. An assessment of demand-side energy management programs, including conservation, efficiency, and load management programs.
III. An assessment of supply options including owned capacity, market procurements, renewable energy, and distributed energy resources.
IV. An assessment of distribution and transmission requirements, including an assessment of the benefits and costs of "smart grid" technologies, and the institution or extension of electric utility programs designed to ensure a more reliable and resilient grid to prevent or minimize power outages, including but not limited to, infrastructure automation and technologies.
V. An assessment of plan integration and impact on state compliance with the Clean Air Act of 1990, as amended, and other environmental laws that may impact a utility's assets or customers.
VI. An assessment of the plan's long- and short-term environmental, economic, and energy price and supply impact on the state.
VII. An assessment of plan integration and consistency with the state energy strategy under RSA 4-E:1.]
II. To develop an integrated distribution plan, a utility shall, through an open and transparent process conducted with the participation of interested stakeholders:
(a) Determine priority outcomes with respect to improving the performance of the system by which the utility provides retail service to its customers;
(b) Determine metrics and targets for assessing the achievement of such priority outcomes;
(c) Make public a set of distribution planning inputs, which for an electric utility shall include but not be limited to circuit-specific load forecasts and hosting capacity analysis and which for a natural gas utility shall consist of demand forecasts;
(d) Identify potential distribution projects, based on an assessment of grid needs in light of the priority outcomes, metrics and targets, and distribution planning inputs;
(e) Evaluate the potential distribution projects and potential non-capital alternatives to such projects, based on criteria approved by the commission, including the use of risk-informed decision-making support for initiatives whose benefits are difficult to quantify; and
(f) Select capital projects and determine capital budgets.
III. A natural gas utility shall include in its integrated distribution plan an assessment of alternatives to natural gas and alternatives to pipelines, including but not limited to opportunities for natural gas customers to reduce their natural gas consumption via energy efficiency or reliance on other sources of energy.
IV. Each utility shall file its initial integrated distribution plan on a rolling schedule determined by the commission, provided that all utilities have been directed to file an initial plan by July 1, 2022.
V. For purposes of this section:
(a) "Hosting capacity analysis" means the assessment on a circuit-by-circuit basis of a utility's ability to integrate distributed generation and 2-way power flows.
(b) "Risk-informed decision making support" means a process by which priority threats to the distribution system are identified, potential risk control measures and their costs are determined, the value of any such risk reduction is assessed, and control measures are prioritized according to their risk reduction value.
(c) "Stakeholders" means the office of the consumer advocate established pursuant to RSA 363:38, duly authorized representatives of other utility customers, non-regulated businesses that provide or intend to provide services to customers that rely on the electricity grid or natural gas pipeline network, and others with an interest in distribution planning as determined by the commission.
3 Integrated Distribution Plans; Commission Evaluation of Plans. Amend RSA 378:39 to read as follows:
378:39 Commission Evaluation of Plans.
I. The commission shall review integrated [least-cost resource] distribution plans in order to evaluate the consistency of each utility's plan with this subdivision, in an adjudicative proceeding. In deciding whether or not to approve the utility's plan, the commission shall consider potential environmental, economic, and health-related impacts of each proposed [option] project identified in the plan. [The commission is encouraged to consult with appropriate state and federal agencies, alternative and renewable fuel industries, and other organizations in evaluating such impacts.] The commission's approval of a utility's plan shall not be deemed a pre-approval of any actions taken or proposed by the utility in implementing the plan. Where the commission determines the options have equivalent financial costs, equivalent reliability, and equivalent environmental, economic, and health-related impacts, the following order of energy policy priorities shall guide the commission's evaluation:
[I.] (a) Energy efficiency and other demand-side management resources;
[II.] (b) Renewable energy sources;
[III.] (c) All other energy sources.
II. Nothing in this section, nor any provision of RSA 378:38, shall preclude the commission from approving shareholder incentive mechanisms intended to encourage the successful development and implementation by a utility of its integrated distribution plan, provided that the resulting rates are just and reasonable.
4 Repeal. RSA 378:38-a, relative to waiver by commission, is repealed.
5 Effective Date. This act shall take effect 60 days after its passage.
20-2307
11/13/19
HB 1429-FN- FISCAL NOTE
AS INTRODUCED
AN ACT relative to integrated distribution plans of energy utilities.
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 | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase |
Expenditures | $0 | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase |
Funding Source: | [ ] General [ ] Education [ ] Highway [ X ] Other - Utility Assessments | |||
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COUNTY: |
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Revenue | $0 | $0 | $0 | $0 |
Expenditures | $0 | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase |
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LOCAL: |
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Revenue | $0 | $0 | $0 | $0 |
Expenditures | $0 | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase |
METHODOLOGY:
This bill revises the requirements for, and submission and evaluation of, integrated distribution plans established by energy utilities under the State's energy policy. The Public Utilities Commission (PUC) indicates the bill amends RSA 363:28, RSA 378:38 and 378:39 and repeals RSA 378:39. It directs the Office of the Consumer Advocate to hire a professional engineer to assist that office and other stakeholders participating in the development of utilities' integrated distribution plan (IDPs) in regard to assessing alternatives to traditional utility investments in electric utility distribution assets and, for natural gas utilities, investments in pipeline infrastructure.
Each electric and natural gas utility will file an IDP with the commission no later than five years from the filing date of the utility's last filed plan. The guiding principle of the IDP will be distribution investments that are made at the lowest possible present-value life cycle cost. The Commission would no longer be able to waive provisions of these planning statutes. The fiscal impact is the hiring of a professional engineer to assist the Office of the Consumer Advocate and other stakeholders in the review and assessment of the utility IDPs. The State of Maine recently passed a similar bill and that bill uses $800,000 as a placeholder for the services of the professional engineer. That estimate seems reasonable for the work that will be required in New Hampshire.
The PUC does not believe it will need to hire additional staff at this time to meet the requirements of the bill as it concerns electric utility IDPs. That could change depending on staffing and workload during the period and the commission does expect it would hire a consultant(s) to review each of the natural gas IDPs. The Commission's Gas and Water Division does not have the staff or expertise to assess alternatives to natural gas and alternatives for pipelines from other energy sources, or the potential rate impact if natural gas utilities are required to meet customer energy demands with non-gas energy sources. The use of non-gas energy sources to meet existing natural gas demand would likely result in escalating natural rates due to declining sales and under-utilized natural gas facilities. In the near term, natural gas rates will not be affected and there will be no fiscal impact.
Consultants costs for review and assessment of the natural gas IDPs is estimated to be $400,000, which would be billed to the gas utilities and collected through gas rates over several years. To summarize, the total costs to comply with this bill would be approximately $1.2 million per year though it could be higher if experts were needed in the review and assessment of the electric utility IDPs. It is unclear how those costs will be assessed. This worksheet assumes that the costs would be charged to New Hampshire ratepayers based on which utility IDP the consultants were working on. If passed through rates, the state as an electric utility customer, would pick up its portion of the cost, approximately one percent of the cost or $8,000 on annual consulting costs of $800,000 per year. There would be a similar effect to the State on the natural gas side.
It is assumed this bill will not be implemented until FY 2021.
AGENCIES CONTACTED:
Public Utilities Commission