New Hampshire-2019-SB204-Amended

SB 204 - AS AMENDED BY THE SENATE

03/27/2019 1178s

2019 SESSION

19-0886

10/03

SENATE BILL 204

AN ACT relative to distributed energy resources and consumer energy storage.

SPONSORS: Sen. Watters, Dist 4; Sen. Feltes, Dist 15; Sen. Fuller Clark, Dist 21; Sen. Morgan, Dist 23; Sen. Hennessey, Dist 5; Rep. Oxenham, Sull. 1; Rep. Somssich, Rock. 27

COMMITTEE: Energy and Natural Resources

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ANALYSIS

This bill modifies the regulation of distributed energy resources of electric utilities, provides for electric consumer energy storage systems, and enables municipalities to adopt a property tax exemption for electric energy storage systems.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/27/2019 1178s 19-0886

10/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Nineteen

AN ACT relative to distributed energy resources and consumer energy storage.

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

1 Chapter Title. Amend the chapter title of RSA 374-G to read as follows:

CHAPTER 374-G

[ELECTRIC UTILITY INVESTMENT IN]

DISTRIBUTED ENERGY RESOURCES

2 Distributed Energy Resources; Purpose. Amend RSA 374-G:1 to read as follows:

374-G:1 Purpose. [Distributed energy resources can increase overall energy efficiency and provide energy security and diversity by eliminating, displacing, or better managing traditional fossil fuel energy deliveries from the centralized bulk power grid, in keeping with the objectives of RSA 362-F:1.] It is [therefore] in the public interest to stimulate investment in distributed energy resources in New Hampshire in diverse ways, including by encouraging New Hampshire electric public utilities to invest in renewable and clean distributed energy resources at the lowest reasonable cost to taxpayers benefiting the transmission and distribution system under state regulatory oversight. This section shall not be interpreted to hinder or discourage market-based development of energy storage.

3 Definition; Distributed Energy Resources. Amend RSA 374-G:2 to read as follows:

374-G:2 Definitions; Exclusions.

I. The following definitions shall apply in this chapter except as otherwise provided:

(a) "Commission" means the public utilities commission.

(b) "Distributed energy resources" means [electric generation equipment, including clean and renewable generation, energy storage, energy efficiency, demand response, load reduction or control programs, and] technologies or devices, including but not limited to energy storage and/or electric generation equipment, including clean and renewable generation, located on or interconnected to the local electric distribution system for purposes including but not limited to reducing line losses, supporting voltage regulation, or peak load shaving, as part of a strategy for minimizing energy, transmission, and distribution costs [as provided in RSA 374-F:3, III].

(c) "Energy storage" means any system, including batteries and the batteries paired with on-site generation, that is capable of retaining, storing, and delivering energy by chemical, thermal, mechanical, or other means.

II. "Distributed energy resources" in this chapter shall exclude electric generation equipment interconnected with the local electric distribution system at a single point or through a customer's own electrical wiring that is in excess of 5 megawatts.

III. Energy storage funded by a public utility shall be consistent with, as determined by the commission, the provisions of RSA 374-F.

4 Electric Generation Equipment Funded by Public Utility. Amend RSA 374-G:3 to read as follows:

374-G:3 Electric Generation Equipment Funded by Public Utility; Requirements. Any electric generation equipment funded in part by a public utility under this chapter is subject to the following requirements:

I. The energy produced by electric generation equipment owned by the public utility shall be used as an offset to distribution system losses or the public utility company's own use, or in another manner approved by the commission that reduces the energy costs;

[II. The energy produced by electric generation equipment utilizing a non-renewable fuel source that is owned by a customer, or sited on a customer's property shall be used to displace the customer's own use;

III. The energy produced by electric generation equipment utilizing a renewable fuel source that is owned by a customer, or sited on the consumer's premises shall be used to displace the customers own use; however, if energy is occasionally generated in excess of the customer's energy requirements, it may be credited to the customer's account in a subsequent period.

IV.] II. Any biomass-fueled generation shall meet the emission requirements to qualify as eligible biomass technology under RSA 362-F:2, VIII.

[V.] III. Any fossil-fuel fueled generation shall produce combined heat and power with a minimum energy efficiency of 60 percent, measured as usable thermal and electrical output in BTUs divided by fuel input in BTUs, shall be installed as an integrated combined heat and power application, and shall meet the following emission standards (in lbs/MW-H): NOx-0.07; CO-0.10; VOCs-0.02. A credit to meet the emission standard may be applied at the rate of one MW-H for each 3.4 million BTUs of heat recovered.

[VI.] IV. These requirements apply in addition to and do not preempt or replace any emission standards or permitting requirements applicable to a given generation facility under any other applicable state or federal law.

5 Rate Filing; Authorization. RSA 374-G:5 is repealed and reenacted to read as follows:

374-G:5 Rate Filing; Authorization.

I. A New Hampshire electric public utility may seek rate recovery for its portion of investments in distributed energy resources from the commission by making an appropriate rate filing demonstrating that the investments are in the public interest. Such filing shall include information demonstrating the public utility's evaluation of:

(a) The economic and environmental impacts of the proposed investment.

(b) The costs, benefits, and rate implications to the participating customers, to the company's default service customers, and to the utility's distribution customers.

(d) The proposed form of recovery for the investments.

II. The commission shall authorize the public utility's recovery of investments made in distributed energy resources, if it finds that such recovery is in the public interest. Determination of the public interest under this section shall include the following factors:

(a) The effect on the reliability, safety, and efficiency of electric service.

(b) The costs and benefits to the utility's customers, including but not limited to a demonstration that the company has reasonably minimized the costs of the project to ratepayers.

(c) Whether the expected value of the economic benefits of the investment to the utility's ratepayers over the life of the investment outweigh the economic costs to the utility's ratepayers.

(d) The effect on competition within the region's electricity markets and the state's energy services market.

(e) The costs and benefits to any participating customer or customers, with ratepayer savings to all customer classes, particularly low-income customers.

III. Authorized and prudently incurred investments shall be recovered under this section in a utility's base distribution rates as a component of rate base, and cost recovery shall include the recovery of depreciation, a return on investment, taxes, and other operating and maintenance expenses directly associated with the investment, net of any offsetting revenues received by the utility directly attributable to the investment. The utility may recover all reasonable costs associated with the filing, whether or not the application is approved by the commission.

IV. The commission may add an incentive to the return on equity component as it deems appropriate to encourage public utility investments in distributed energy resources.

V. The commission shall approve, disapprove, or approve with conditions a utility rate filing under this section within 90 days of its filing. The commission may extend this deadline to 6 months at its discretion for any filing involving an investment in excess of $1,000,000. The commission may also extend the deadline at its discretion for failure of the applicant to respond to data requests on an expedited timeline, but in no event shall such deadline exceed 12 months from the date of filing.

6 New Section; Customer Energy Storage Systems. Amend RSA 374-G by inserting after section 7 the following new section:

374-G:8 Customer Energy Storage Systems.

I. The commission shall adopt rules allowing the installation, interconnection, and use of energy storage systems by customers of utilities, the commission shall incorporate the following principles into the rules:

(a) It is in the public interest to limit barriers to the installation, interconnection, and use of customer-sited energy storage systems in New Hampshire;

(b) New Hampshire's consumers of electricity have a right to install, interconnect, and use energy storage systems on their property without the burden of unnecessary restrictions or regulations and without unduly discriminatory rates or fees;

(c) Utility approval processes and any required interconnection reviews of energy storage systems shall be simple, streamlined, and affordable for customers; and

(d) Utilities shall not require the installation of customer-sited meters in addition to a single net energy meter for the purposes of monitoring energy storage systems; except that the commission may authorize the requirement of metering for certain large energy storage systems, as determined by the commission.

II. Nothing in this section alters or supersedes either:

(a) The principles of net energy metering under RSA 362-A:9; or

(b) Any existing electrical permit requirements or any licensing or certification requirements for installers, manufacturers, or equipment.

7 Procedure for Adoption of Property Tax Exemption. Amend the introductory paragraph of RSA 72:27-a, I, to read as follows.

I. Any town or city may adopt the provisions of RSA 72:28, RSA 72:28-b, RSA 72:29-a, RSA 72:35, RSA 72:37, RSA 72:37-b, RSA 72:38-b, RSA 72:39-a, RSA 72:62, RSA 72:66, RSA 72:70, RSA 72:76, [or] RSA 72:82, or RSA 72:85 in the following manner:

8 New Subdivision; Electric Energy Storage Systems Exemption. Amend RSA 72 by inserting after section 83 the following new subdivision:

Electric Energy Storage Systems Exemption

72:84 Definition of Electric Energy Storage System. In this subdivision "electric energy storage system" means a facility located behind a retail meter that stores electrical energy that is otherwise produced by an electricity generator or uses electricity to concentrate and store thermal energy, by electrical, chemical, mechanical, or thermal means, for discharge or use at a later time, whether in the form of thermal energy to meet space or process heating or cooling loads or electricity, which can be used to reduce peak loads, compensate for variability in renewable energy production, or provide other grid services, and which does not participate in any wholesale energy markets administered by ISO New England as a registered asset or otherwise. An electric energy storage system shall not include conventional electric resistance or gas domestic hot water heaters.

72:85 Exemption for Electric Energy Storage Systems. Each city and town may adopt under RSA 72:27-a an exemption from the assessed value, for property tax purposes, for persons owning real property which is equipped with an electrical energy storage system.

72:86 Application for Exemption. Applications for exemptions under RSA 72:85 shall be governed by the provisions of RSA 72:33, RSA 72:34, and RSA 72:34-a.

9 Department of Revenue Administration; Equalization; Reference Added. Amend RSA 21-J:3, XIII to read as follows:

XIII. Equalize annually by May 1 the valuation of the property as assessed in the several towns, cities, and unincorporated places in the state including the value of property exempt pursuant to RSA 72:37, 72:37-b, 72:39-a, 72:62, 72:66, [and] 72:70, and 72:85, property which is subject to tax relief under RSA 79-E:4, and property which is subject to tax relief under RSA 79-E:4-a, by adding to or deducting from the aggregate valuation of the property in towns, cities, and unincorporated places such sums as will bring such valuations to the true and market value of the property, and by making such adjustments in the value of other property from which the towns, cities, and unincorporated places receive taxes or payments in lieu of taxes, including renewable generation facility property subject to a payment in lieu of taxes agreement under RSA 72:74, as may be equitable and just, so that any public taxes that may be apportioned among them shall be equal and just. In carrying out the duty to equalize the valuation of property, the commissioner shall follow the procedures set forth in RSA 21-J:9-a.

10 Department of Revenue Administration; Rules; Reference Added. Amend RSA 72:36, I to read as follows:

I. The commissioner's interpretation of RSA 72:28, 72:28-b, 72:28-c, 72:29, 72:29-a, 72:30, 72:31, 72:32, 72:33, 72:34, 72:34-a, 72:35, 72:36-a, 72:37, 72:37-a, 72:37-b, 72:38-a, 72:38-b, 72:39-a, 72:39-b, 72:41, 72:62, 72:66, [and] 72:70, and 72:85; and

11 Repeal. RSA 374-G:7, relative to an exclusion for renewable generating equipment, is repealed.

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