HB1635: relative to the purchase of output of limited electrical energy producers and including qualifying storage system.

HB 1635-FN - AS INTRODUCED

2022 SESSION

22-2035

12/10

HOUSE BILL 1635-FN

AN ACT relative to the purchase of output of limited electrical energy producers and including qualifying storage system.

SPONSORS: Rep. McGhee, Hills. 27; Rep. Stapleton, Sull. 5; Rep. Wolf, Merr. 5; Rep. Allard, Merr. 21; Rep. Merner, Coos 7

COMMITTEE: Science, Technology and Energy

ANALYSIS

This bill expands the authority of a limited producer of electrical energy to sell its output to

retail electricity customers located within the same New Hampshire electric distribution utility

franchise area as the limited producer, and includes qualifying electrical energy storage.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

22-2035

12/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twenty Two

AN ACT relative to the purchase of output of limited electrical energy producers and including qualifying storage system.

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

1 Definition; Limited Electrical Energy Producers; Limited Producer. Amend RSA 362-A:1-a, III to read as follows:

III. "Limited producer" or "limited electrical energy producer" means a qualifying small power producer, a qualifying storage system, or a qualifying cogenerator, with a [total] maximum rated generating or discharge capacity of [not more] less than 5 megawatts, that does not participate in net energy metering; is not registered as a generator, asset, or network resource with ISO New England; and does not otherwise participate in any FERC jurisdictional wholesale electricity markets, except as an alternative technology regulation resource (ATRR) to the extent ATRRs are deemed by ISO New England to function as retail or network load reducers for all other ISO New England purposes. Such non-participation in FERC jurisdictional interstate wholesale markets may be achieved by retirement from such markets.

2 New Paragraph; Definition; Qualifying Storage System. Amend RSA 362-A:1-a by inserting after paragraph IX the following new paragraph:

IX-a. "Qualifying storage system” means an electric energy storage system as defined in RSA 72:84.

3 Limited Electrical Energy Producers Act; Purchase of Output in Intrastate Commerce. RSA 362-A:2-a is repealed and reenacted to read as follows:

362-A:2-a Purchase of Output of Limited Producers in Intrastate Commerce.

I. A limited producer of electrical energy may sell its produced electrical energy to one or more purchasers other than the franchise electric utility. Such purchasers may be any retail electricity customers located within the same New Hampshire electric distribution utility franchise area as where the limited producer is located or any electricity suppliers serving retail load within such area.

II. Intrastate sales of electricity across the distribution grid shall be facilitated and accounted for by competitive electricity suppliers registered with the department of energy under RSA 374-F:7 or by municipal or county aggregations under RSA 53-E that are load-serving entities.

III. To participate in such intrastate sales of electricity over the distribution grid a limited producer must be equipped with a revenue grade interval meter that can accurately measure hourly exports to the distribution grid and report such meter data for daily load settlement purposes.

IV. The department of energy shall adopt rules pursuant to RSA 541-A to:

(a) Establish procedures to enable limited producers to sell electricity at wholesale within intrastate commerce and at retail, either directly or indirectly through electricity suppliers;

(b) Establish such requirements and conditions concerning intrastate sales of electricity pursuant to this section that it deems necessary to avoid substantial risk or uncompensated costs to the electric utility in whose franchise area the sales takes place.

(c) Avoid unjust and unreasonable cost shifting transmission rate effects on retail customers arising from avoided transmission cost credits, which may include provisions to reduce, on a prospective basis, the credit for actual avoided transmission charges to some reasonable portion of the value thereof;

(d) Provide for filing or reporting on contracts for such intrastate sales to the department of energy and the distribution utility to which the limited producer is interconnected, including provision for confidential protection of commercially sensitive financial terms of such contracts; and

(e) Provide reasonable consumer protections for retail sales of electricity from limited producers, which may include a requirement for prior review and approval of such contracts before they go into effect. If such a contract review is required, the rules shall provide that failure to disapprove such contract within 60 days of its filing with the department of energy shall constitute approval thereof. Any such contract review shall not require a contested case.

V. The limited producer shall receive credit for actual avoided transmission charges if the intrastate wholesale or retail sale of such electricity reduces the retail load measured at the wholesale meter point between the distribution system under state jurisdiction and transmission facilities under federal jurisdiction such that transmission charges allocated to the distribution utility are reduced from what they otherwise would be absent the electricity exported to the distribution grid by the limited producer during hours of coincident peak on which transmission costs are allocated. Such credit shall be based on measurement of exports to the distribution grid at the retail meter point without additional credit for avoided line and transformation losses between retail meter points and the transmission grid to provide some sharing of the benefit of reduced transmission charges with other ratepayers who do not participate in such intrastate electricity sales by limited producers.

VI. Purchasers of power from limited producers shall pay for the delivery of such power through tariffs, charges, and rates that are generally applicable to the customer’s rate class, except for default energy service charges if not applicable and transmission charges as they may be adjusted pursuant to paragraph V.

4 New Section; Electric Renewable Portfolio Standard; Exclusion to Amount of Electricity Supplied. Amend RSA 362-F by inserting after section 3 the following new section:

362-F:3-a Exclusions to the Amount of Electricity Supplied. If a provider of electricity has revenue grade meter data on the quantity of exports to the grid from a qualifying storage system as defined in RSA 362-A:1-a to the extent that it is charged from the grid, such amounts may be deducted from the calculation of electricity supplied by the provider to its end-use customers for the applicable year for purposes of compliance with RSA 362-F:3 as determined and provided for by the department of energy.

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

LBA

22-2035

Revised 2/3/22

HB 1635-FN- FISCAL NOTE

AS INTRODUCED

AN ACT relative to the purchase of output of limited electrical energy producers and including qualifying storage system.

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

Estimated Increase / (Decrease)

STATE:

FY 2022

FY 2023

FY 2024

FY 2025

Appropriation

$0

$0

$0

$0

Revenue

$0

$0

$0

$0

Expenditures

$0

Indeterminable

Indeterminable

Indeterminable

Funding Source:

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

COUNTY:

Revenue

$0

$0

$0

$0

Expenditures

$0

Indeterminable

Indeterminable

Indeterminable

LOCAL:

Revenue

$0

$0

$0

$0

Expenditures

$0

Indeterminable

Indeterminable

Indeterminable

METHODOLOGY:

This bill expands the authority of a limited producer of electrical energy to sell its output to retail electricity customers located within the same New Hampshire electric distribution utility franchise area as the limited producer, and includes qualifying electrical energy storage.

The Department of Energy has identified the following potential fiscal impacts:

The Department's expenditures will increase as it would be required to undertake rulemaking to develop and implement the parameters of the newly authorized intrastate wholesale and retail sales transactions and avoided transmission charge crediting. Proposed RSA 362-A:2-a IV (a), (b), and (c) would take significant time and resources, as well as specialized expertise the Department does not currently have and may require the use of consultants. The cost of such consultants for this project is currently unknown. Regarding proposed RSA 362-A:2-a, IV(e), the Department only has expertise in reviewing contracts for consumer protection in other contexts, this bill would significantly expand the Department’s involvement in consumer protection in a new area. Depending on the number of additional contracts requiring Department review, additional staff may be needed.

The Department assumes the State, counties, and local governments would be eligible to enter into contracts to purchase from limited electrical energy producers. If the terms of these contracts were favorable as compared to existing electrical energy procurement, then there could be reductions in State, county and local expenditures for electricity. If the terms of the contract were not favorable as compared to existing electrical energy procurement, then the State, counties and local governments may experience increases in electricity expenditures.

If the shared transmission savings contemplated under the proposed 362-A:2-a, V are realized and accrue to all utility ratepayers, then savings in electricity costs may be experienced by state, county, and local governments as electric ratepayers.

AGENCIES CONTACTED:

Department of Energy