HB 219-FN - AS AMENDED BY THE HOUSE
13Mar2025... 0678h
2025 SESSION
25-0262
06/09
HOUSE BILL 219-FN
AN ACT relative to changes to the minimum electric renewable portfolio standards.
SPONSORS: Rep. Harrington, Straf. 18; Rep. Bernardy, Rock. 36; Rep. Notter, Hills. 12; Rep. Summers, Rock. 20; Rep. Vose, Rock. 5
COMMITTEE: Science, Technology and Energy
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AMENDED ANALYSIS
This bill makes changes to the minimum electric renewable portfolio standards.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
13Mar2025... 0678h 25-0262
06/09
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Five
AN ACT relative to changes to the minimum electric renewable portfolio standards.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Electric Renewable Energy Classes. Amend RSA 362-F:4, I(a) to read as follows:
(a) Wind energy, except that mandated by government procurements.
2 Electric Renewable Energy Classes. RSA 362-F:4, I(h) is repealed and reenacted to read as follows:
(h) Solar energy if the solar energy produces electricity.
3 Minimum Electric Renewable Portfolio Standards. Amend RSA 362-F:3 to read as follows:
362-F:3 Minimum Electric Renewable Portfolio Standards. For each year specified in the table below, each provider of electricity shall obtain and retire certificates sufficient in number and class type to meet or exceed the following percentages of total megawatt-hours of electricity supplied by the provider to its end-use customers that year, except to the extent that the provider makes payments to the renewable energy fund under RSA 362-F:10, II:
2008 2009 2010 2011 2012 2013 2014 2015 2025 and thereafter
Class I 0.0% 0.5% 1% 2% 3% 3.8% 5% 6% 15% (*)
[Class II 0.0% 0.0% 0.04% 0.08% 0.15% 0.2% 0.3% 0.3% 0.7% ]
Class III 3.5% 4.5% 5.5% 6.5% 1.4% 1.5% 3.0% 8.0% 8.0%
Class IV 0.5% 1% 1% 1% 1% 1.3% 1.4% 1.5% 1.5%
*Class I increases an additional 0.9 percent per year from 2015 through 2025. A set percentage of the class I totals shall be satisfied annually by the acquisition of renewable energy certificates from qualifying renewable energy technologies producing useful thermal energy as defined in RSA 362-F:2, XV-a. The set percentage shall be 0.4 percent in 2014, 0.6 percent in 2015, 0.8 percent in 2016, and increased annually by 0.2 percent per year from 2017 through 2023, and then reduce to 1.7 percent beginning on August 1, 2025, after which it shall remain unchanged. [Class II shall increase to 0.5 percent beginning in 2018, 0.6 percent beginning in 2019, and 0.7 percent beginning in 2020, otherwise] Classes [II-IV] III and IV shall remain at the same percentages from 2015 through 2025 except as provided in RSA 362-F:4, V-VI.
4 Electric Renewable Energy Classes. Amend RSA 362-F:4, V to read as follows:
V. For good cause, and after notice and hearing, the department of energy may accelerate or delay by up to one year, any given year's incremental increase in class I [or II] renewable portfolio standards requirement under RSA 362-F:3.
5 Electric Renewable Portfolio Standard; Definitions. Amend RSA 362-F:2, XV to read as follows:
XV. "Renewable energy source," "renewable source," or "source" means a class I, [II,] III, or IV source of electricity or a class I source of useful thermal energy. An electrical generating facility, while selling its electrical output at long-term rates established before January 1, 2007, by orders of the commission under RSA 362-A:4, shall not be considered a renewable source.
6 Renewable Energy Fund. Amend RSA 362-F:10, I to read as follows:
I. There is hereby established a renewable energy fund. This nonlapsing special fund shall be continually appropriated to the department of energy to be expended in accordance with this section; provided that at the start of the period in which there is no adopted state operating budget, the department of energy shall in a timely manner seek the approval of the fiscal committee of the general court to continue using moneys from the renewable energy fund to support renewable energy rebate and grant programs in order to ensure there are no interruptions to the programs. The state treasurer shall invest the moneys deposited therein as provided by law. Income received on investments made by the state treasurer shall also be credited to the fund. All payments to be made under this section shall be deposited in the fund. Any remaining moneys paid into the fund under paragraph II of this section[, excluding class II moneys,] shall be used by the department of energy to support thermal and electrical renewable energy initiatives and offshore wind initiatives, including the office of offshore wind industry development and energy innovation. [Class II moneys shall primarily be used to support solar energy technologies in New Hampshire.] All initiatives supported out of these funds shall be subject to audit by the department of energy as deemed necessary. All fund moneys [including those from class II] may be used to administer this chapter, but all new employee positions shall be approved by the fiscal committee of the general court. No new employees shall be hired by the department of energy due to the inclusion of useful thermal energy in class I production.
7 Renewable Energy Fund. RSA 362-F:10, III is repealed and reenacted to read as follows:
III. Beginning June 30, 2025 these rates shall be fixed at the following levels:
(a) Class I - $42, except for that portion of the class electric renewable portfolio standards to be met by qualifying renewable energy technologies producing useful thermal energy under RSA 362-F:3, which shall be $30.
(b) Class III - $42.
(c) Class IV - $37.
8 Renewable Energy Certificates. Amend RSA 362-F:6, II-a to read as follows:
II-a. The department of energy shall establish a methodology to estimate the total yearly production for customer-sited sources that are net metered under RSA 362-A:9 and for which class I [or II] certificates are not issued. For purposes of estimation, the department of energy shall use a capacity factor rating of 20 percent for each class I installation. [The department of energy shall separately estimate class II output using a capacity factor rating equal to the annual PV Energy Forecast issued by the Distributed Generation Working Group under ISO New England, or its successor.] Providers of electricity required to obtain and retire certificates under RSA 362-F:3 shall receive an annual credit for such production according to its class. By February 28 of each year, the department of energy shall compute and make public credit percentages that are equal to the estimated production for the prior calendar year in each class divided by the total amount of electricity supplied by providers of electricity to end-use customers in the prior calendar year, with the result converted to a percentage. Each provider may then, at the time of its annual report filing under RSA 362-F:8, claim a class I [and a class II] certificate credit equal to the credit percentage times the total megawatt-hours of electricity supplied by the provider to its end-use customers the prior calendar year.
9 Repeal. The following are repealed:
I. RSA 362-F:4, I(h), relative to class II sources.
II. RSA 362-F:4, II, relative to class II renewable energy.
III. RSA 362-F:15, I, relative to class II increases.
10 Effective Date. This act shall take effect 60 days after its passage.
25-0262
12/12/24
HB 219-FN- FISCAL NOTE
AS INTRODUCED
AN ACT relative to the phasing out of the minimum electric renewable portfolio standard.
FISCAL IMPACT: This bill does not provide funding, nor does it authorize new positions.
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Estimated State Impact | ||||||
| FY 2025 | FY 2026 | FY 2027 | FY 2028 | ||
Revenue | $0 | Decrease of $1,174,000 | Decrease of $2,348,000 | Decrease of $3,522,000 | ||
Revenue Fund(s) | Renewable Energy Fund | |||||
Expenditures* | $0 | Indeterminable Decrease of $1,000,000 to $2,500,000 | Indeterminable Decrease of $1,000,000 to $2,500,000 | Indeterminable Decrease, More than $2,500,000 | ||
Funding Source(s) | Renewable Energy Fund, Various Agency Funds | |||||
Appropriations* | $0 | $0 | $0 | $0 | ||
Funding Source(s) | None | |||||
*Expenditure = Cost of bill *Appropriation = Authorized funding to cover cost of bill | ||||||
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Estimated Political Subdivision Impact | ||||||
| FY 2025 | FY 2026 | FY 2027 | FY 2028 | ||
County Revenue | $0 | $0 | $0 | $0 | ||
County Expenditures | $0 | Indeterminable Decrease | Indeterminable Decrease | Indeterminable Decrease | ||
Local Revenue | $0 | $0 | $0 | $0 | ||
Local Expenditures | $0 | Indeterminable Decrease | Indeterminable Decrease | Indeterminable Decrease | ||
METHODOLOGY:
This bill requires the Department of Energy to implement a phase out of the minimum electric
renewable portfolio standard (RPS) over a 5-year period.
The Department of Energy states the RPS is a requirement that electric distribution companies, competitive suppliers, and community aggregators purchase a certain percentage of the electricity they sell from certain renewable sources. To comply with the RPS, those entities are required to purchase a sufficient number of renewable energy certificates (RECs) to cover their sales of electricity in a given compliance year. If the entities cannot meet their requirement by purchasing enough RECs, they can make alternative compliance payments (ACPs) instead. The price of RECs is subject to supply and demand and the policy decisions of states in New England that impact supply and demand, while the ACP functions as a price cap. ACPs made are deposited into the Renewable Energy Fund (REF). Due to these variables, it is impossible to project the impact in future years, but for the purpose of this fiscal note, the Department used the most recently completed compliance year (CY 2023) as a basis to make projections.
The Department also assumes compliance with the RPS would continue to be met with both RECs and ACPs throughout the phase out. ACPs are made at a rate equal to, or greater than the market price for RECs. With reduced RPS requirements, it is likely that the compliance cost for ACPs would fall faster than the compliance cost for RECs. Absent other market conditions or changes, the need for RECs would decline, while the supply would remain static. This is not possible for the Department to project, but for the purpose of this fiscal analysis, it is assumed that costs will decrease linearly through out the phase down.
This bill would reduce the percentages of each RPS Class required by 20% of the requirement in 2025. Because the bill would reduce and then eliminate the number of RECs or ACPs required to be in compliance with the RPS, this would impact electricity prices. The cost of compliance with the RPS is passed on by the electric distribution utilities, competitive suppliers, and community aggregators to ratepayers through electricity prices. With a reduction in the requirement, comes a reduction in the compliance costs. However, the exact fiscal impact is difficult to project due to the fluctuating price and availability of RECs based on market conditions.
The Department used Compliance Year 2023 as a base. Total compliance cost for the RPS for that year was $34,050,000. With a 20% reduction over the 2025 RPS rates, compliance costs would be decreased over the base year by $6,810,000 each year as follows:
FY 2026: ($6,810,000)
FY 2027: ($13,620,000)
FY 2028: ($20,430,000)
FY 2029: ($27,240,000)
FY 2030: ($34,050,000)
Note: This is not the State government’s cost of compliance; this represents the costs paid by electric suppliers.
Regarding the impact on State revenues it is assumed that with reduced demand and a static supply of RECs that ACP revenue will fall each year and be eliminated by the beginning of Fiscal Year 2030. As noted above, using the base year of Compliance Year 2023, ACP revenue would fall by $1,174,000 each year. However, it is unlikely that the reduction in ACP revenue will occur on a linear basis and likely would be fully reduced in the initial years of the phase down.
FY 2026 ($1,174,000)
FY 2027 ($2,348,000)
FY 2028 ($3,522,000)
FY 2029 ($4,696,000)
FY 2030 ($5,870,000)
This represents a reduction in the dollar amount of ACPs made to the State by electric suppliers. With the reduction in ACP revenue, state expenditures on programs funded out of the Renewable Energy Fund would also decline by a commensurate amount. With the elimination of the RPS, any rebate or grant program funded by the RPS would be eliminated, and the staff working on those programs, or funded through the REF, such as the Office of Offshore Wind and Energy Innovation, will either be laid off, or potentially reassigned if vacancies exist elsewhere in the agency.
State expenditures would equal the sum of the Renewable Energy Expenditures (which is equal to the reduction in ACP revenue above) plus the decrease in expenditures on electricity. Based on electricity consumption data from the Department of Administrative Services, the state is responsible for roughly 1% of all electricity purchases in New Hampshire and would potentially realize 1% of the total reduction in electricity costs. While a reduction in electricity costs for electricity purchased from the electric distribution utility would be directly passed through to the state, any potential reductions in state expenditures for electricity purchased from a competitive supplier or community aggregator is indeterminable given the lack of visibility into the components that make up the prices offered by those entities. This projection assumes that 100% of the electricity purchased by the state is from an electric distribution utility.
Estimated reduction in state expenditures on electricity: FY 2026: ($68,100)
FY 2027: ($136,200)
FY 2028: ($204,300)
FY 2029: ($272,400)
FY 2030: ($340,500)
County and Local expenditures on electricity would decrease by an indeterminable amount. The Department of Energy does not have access to data for electricity consumption for either the counties or local units of government and therefore cannot make a reasonable estimate as to the impact on county and local expenditures. The bill would have no fiscal impact on county or local revenue.
It is assumed that any fiscal impact would occur after FY 2025.
AGENCIES CONTACTED:
Department of Energy
| Date | Amendment |
|---|---|
| March 5, 2025 | 2025-0678h |
| Date | Body | Type |
|---|---|---|
| Feb. 3, 2025 | House | Hearing |
| March 3, 2025 | House | Exec Session |
| March 3, 2025 | House | Floor Vote |
March 13, 2025: Referred to Finance 03/13/2025 HJ 8
March 13, 2025: Ought to Pass with Amendment 2025-0678h: MA RC 189-173 03/13/2025 HJ 8
March 13, 2025: Amendment # 2025-0678h (NT): AA VV 03/13/2025 HJ 8
March 5, 2025: Minority Committee Report: Inexpedient to Legislate
March 5, 2025: Majority Committee Report: Ought to Pass with Amendment # 2025-0678h (NT) 03/03/2025 (Vote 10-8; RC)
Feb. 25, 2025: Executive Session: 03/03/2025 01:00 pm LOB 302-304
Jan. 29, 2025: Public Hearing: 02/03/2025 01:00 pm LOB 302-304
Jan. 7, 2025: Introduced 01/08/2025 and referred to Science, Technology and Energy HJ 2 P. 11