Revision: June 15, 2020, 1:56 p.m.
HB 715-FN - VERSION ADOPTED BY BOTH BODIES
20Mar2019... 0742h
01/08/2020 2874s
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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AMENDED ANALYSIS
This bill requires the public utilities commission to investigate ways to enable energy storage projects to receive compensation for avoided transmission and distribution costs.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.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... 0742h
01/08/2020 2874s 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. 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. For 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.
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. “Front-of-the-meter storage” means any energy storage that is not behind-the-meter storage.
VII. "ISO-New England" means the Independent System Operator New England or any successor entity.
VIII. "Local network service" means the term as defined in ISO-New England's transmission, markets, and services tariff, section II.
IX. "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, including retail customers that buy behind-the-meter storage installed on their property.
X. "Peak demand" means the total combined annual coincident peak energy demand of all utility service territories in New Hampshire.
XI. "Regional network service" means the term as defined in ISO-New England's transmission, markets, and services tariff, section II.
XII. "Renewable energy source" means a Class I, Class II, or Class IV renewable energy source as defined in RSA 362-F:4.
XIII. "Utility" means any entity that distributes electricity to retail customers or owns part of the electrical transmission system in New Hampshire.
XIV. "Wholesale electricity markets" means any energy, capacity, or ancillary service market that ISO-New England operates.
374-H:2 Commission Investigation of Energy Storage.
I. Within 30 days of the effective date of this chapter, the commission shall initiate a proceeding to investigate ways to enable energy storage projects to receive compensation for avoided transmission and distribution costs, including but not limited to avoided regional and local network service charges, while also participating in wholesale energy markets. The commission shall investigate how this might be done for both utility-owned and non-utility-owned energy storage projects, as well as for both behind-the-meter storage and front-of-the-meter storage.
II. The commission’s investigative proceeding shall specifically consider the following:
(a) How public policy can best help establish accurate and efficient price signals for energy storage projects that value their ability to avoid transmission and distribution costs while simultaneously reducing wholesale electricity market prices.
(b) How to compensate energy storage projects that participate in wholesale electricity markets for avoided transmission and distribution costs in a manner that provides net savings to consumers.
(c) How best to encourage both utility and non-utility investments in energy storage projects.
(d) The costs and benefits of a potential bring your own device program; how such a program might be implemented; any statutory or regulatory changes that might be needed to create, facilitate, and implement such a program; and whether such a program should include all distributed energy resources or be limited to distributed energy storage projects.
(e) Any statutory changes the general court should implement, including but not limited to changes to or exceptions from RSA 374-F or RSA 374-G, to enable energy storage projects to receive appropriate compensation for avoided transmission and distribution costs while also participating in wholesale energy markets.
(f) Any other topic the commission reasonably believes it should consider in order to diligently conduct the proceeding.
III. The commission shall report its findings and recommendations to the standing committees of the house of representatives and senate with jurisdiction over energy and utility matters no later than 2 years after initiating the proceeding. The report shall identify ways any recommended statutory changes can minimize any potential conflict with the restructuring policy principles of RSA 374-F.
3 Effective Date. This act shall take effect 60 days after its passage.
19-0764
Amended 4/8/19
HB 715-FN- FISCAL NOTE
AS AMENDED BY THE HOUSE (AMENDMENT #2019-0742h)
AN ACT relative to electrical energy storage.
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 [ X ] Highway [ X ] Other - Various Government 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 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. The bill states that the Commission's regulations or orders shall "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.
AGENCIES CONTACTED:
Public Utilities Commission