2jan02...1958h

4/11/02 3314s

2may02...3757eba

2002 SESSION

01-0285

03/10

HOUSE BILL 718-FN

AN ACT relative to renewable-energy-source electricity generation and transition service.

COMMITTEE: Science, Technology and Energy

AMENDED ANALYSIS

This bill permits electric utilities to establish renewable energy options as part of transition service.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

2jan02...1958h

4/11/02 3314s

2may02...3757eba

01-0285

03/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Two

AN ACT relative to renewable-energy-source electricity generation and transition service.

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

268:1 Purpose. The purpose of this act is to promote the generation of electricity from renewable energy in recognition of the environmental, public health, economic, energy security, and energy diversity benefits associated with such production.

268:2 Public Utility; Regulation of Rural Electric Cooperatives. Amend RSA 362:2, II to read as follows:

II. For the purposes of this title only, rural electric cooperatives for which a certificate of deregulation is on file with the public utilities commission pursuant to RSA 301:57 shall not be considered public utilities; provided, however, that the provisions of RSA 362-A, 363-B, 371, 374:2-a, 374:26, 374:26-a, 374-A, 374-C, 374-F, and 378:37-39 shall, unless otherwise provided herein, be applicable to rural electric cooperatives, without regard to whether a certificate of regulation or deregulation is on file with the public utilities commission. The provisions of RSA 374-A and the provisions of RSA 374-F:3, V(b) and (f) and RSA 374-F:7 shall be applicable to rural electric cooperatives for which a certificate of deregulation is on file with the public utilities commission to the same extent as municipal utilities.

268:3 Authority to Issue Finance Orders; Transition Service. Amend RSA 369-B:3, IV(b)(1)(A)-(D) to read as follows:

(A) From competition day until the completion of the sale of PSNH's ownership interests in fossil and entitlement interests in nuclear generation assets located in New Hampshire, PSNH shall supply all, except as modified pursuant to RSA 374-F:3, V(f), transition service and default service offered in its retail electric service territory from its generation assets and, if necessary, through supplemental power purchases in a manner approved by the commission. Once PSNH is no longer supplying transition service, to the extent applicable, any provider or providers of transition service shall have been chosen through a competitive bid process, administered by the commission, to provide such service or as determined under RSA 374-F:3, V(e). The commission may, if it finds it to be in the public interest, divide the competitive bid process into multiple categories or multiple competitive bids;

(B)(i) Transition service for residential customers, street lighting customers, and general delivery service rate G customers shall be available until at least 24 months after initial transition service end day or as extended by the commission under RSA 374-F:3, V. From competition day until 21 months after competition day, the price of transition service for these customers shall be $0.044 per kilowatt-hour together with, for those customers choosing a renewable energy transition service option under RSA 374-F:3, V(f), the price of the renewable energy component. From 21 months after competition day until initial transition service end day, the price of transition service for these customers shall be $0.046 per kilowatt-hour together with, for those customers choosing a renewable energy transition service option under RSA 374-F:3, V(f), the price of the renewable energy component;

(ii) From initial transition service end day to the day that PSNH ceases to provide transition service, the price of transition service shall be PSNH's actual, prudent, and reasonable costs of providing such power, as approved by the commission, together with, for those customers choosing a renewable energy transition service option under RSA 374-F:3, V(f), the price of the renewable energy component. Thereafter, the price of transition service, if offered, shall be the competitively bid price for transition service, or as determined under RSA 374-F:3, V(e), together with, for those customers choosing a renewable energy transition service option under RSA 374-F:3, V(f), the price of the renewable energy component;

(iii) At the end of the transition service period, up to 25 percent of the residential customers, street lighting customers, and general delivery service rate G customers who have not chosen a competitive supplier may be assigned randomly to registered competitive suppliers other than the transition service supplier or suppliers, if the commission finds such random assignment to be in the public interest. The commission shall develop procedures and regulations for this assignment process. Any random assignment must be affirmatively approved by an individual customer;

(C) Transition service for all other customers shall be available until at least 12 months after initial transition service end day or as extended by the commission under RSA 374-F:3, V. From competition day to 21 months after competition day, the price of transition service for these customers shall be $0.044 per kilowatt-hour together with, for those customers choosing a renewable energy transition service option under RSA 374-F:3, V(f), the price of the renewable energy component. From 21 months after competition day to the day that PSNH ceases to provide transition service, the price of transition service shall be PSNH's actual, prudent, and reasonable costs of providing such power as approved by the commission, together with, for those customers choosing a renewable energy transition service option under RSA 374-F:3, V(f), the price of the renewable energy component. Thereafter, the price of transition service, if offered, shall be the competitively bid price for transition service, or as determined under RSA 374-F:3, V(e), together with, for those customers choosing a renewable energy transition service option under RSA 374-F:3, V(f), the price of the renewable energy component;

(D) Any difference between the price of transition service, exclusive of the portion attributable to the renewable energy component under RSA 374-F:3, V(f), from competition day to the day that PSNH ceases to provide transition service and PSNH's actual, prudent, and reasonable costs of providing such power as determined by the commission shall first be separated between the 2 groups of customers described in subparagraphs (b)(1)(B) and (b)(1)(C), used first to offset any differences described in subparagraph (b)(1)(B), and the net then reconciled for each group of customers either by changing the recovery end date, or by decreasing the stranded cost recovery charge, as the commission finds to be in the public interest;

268:4 New Subparagraph; Electric Utility Restructuring Policy Principles; Renewable Energy Option Transition Service. Amend RSA 374-F:3, V by inserting after subparagraph (e) the following new subparagraph:

(f)(1) A utility may, at its discretion, allow its customers to choose a renewable energy transition service option from one or more options, as approved by the commission. A renewable energy transition service option should have either all or a portion of its service attributable to a renewable energy component, with any remainder filled by standard transition service. Costs associated with the renewable energy component should be paid for by those customers choosing to take the renewable energy transition service option; the price of the renewable energy component shall be approved by the commission.

(2) The renewable energy component should be composed of the purchase of electricity from generation sites powered by renewable energy and located within the ozone transport region (Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and Virginia) or, as approved by the commission in consultation with the department of environmental services, the purchase of various forms of renewable energy certificates or emission credits, allowances, or certificates attributable to such generation sites, but acquired separately from the electricity produced. Renewable energy certificates administered by the Independent System Operator-New England should be considered at least one form of certification that is acceptable under this program.

(3) For purposes of subparagraph (f), "renewable energy" means geothermal energy, tidal or wave energy, wind energy, solar thermal energy, photovoltaic energy, landfill gas energy, hydro energy, biomass energy, or combusted municipal waste energy where mercury emissions are reduced to an emission rate of 0.028 milligrams per dry standard cubic meter or less corrected to 7 percent oxygen by volume on a dry basis, or at least 85 percent control efficiency.

(4) A utility that is required by statute to provide transition service from its generation assets should use any of its owned generation assets that are powered by renewable energy for the provision of standard transition service, rather than for the provision of a renewable energy component.

(5) Utilities offering renewable energy transition service options should insert educational materials in their normal mailings to their customers that explain the renewable energy transition service options being offered and the health and environmental benefits associated with them. Such educational materials should be compatible with any environmental disclosure requirements established by the commission.

(6) For purposes of consumer protection and the maintenance of program integrity, reasonable efforts should be made to assure that the renewable energy component of a renewable energy transition service option is not separately advertised, claimed, or sold as part of any other electricity service or transaction.

268:5 New Paragraph; Electric Utility Restructuring; Promoting Renewable Energy. Amend RSA 374-F:6 by inserting after paragraph IV the following new paragraph:

V. Working on promoting the generation of electricity from renewable energy.

268:6 Energy Efficiency Program; Efficient Renewable Energy Programs. Amend 2001, 29:14 to read as follows:

29:14 Energy Efficiency Program; Efficient Renewable Energy Programs.

I. The public utilities commission shall phase-in, as quickly as can be effectively administered by Public Service Company of New Hampshire, an energy efficiency program for Public Service Company of New Hampshire that is funded at a rate of $0.0018 per kilowatt-hour to be allocated from the system benefits charge. The public utilities commission shall not decrease the amount of the system benefits charge allocated to low-income customers due to passage of this act.

II. Any restructured utility under RSA 374-F may, at its discretion, propose efficient renewable energy programs that would yield results similar to cost-effective energy efficiency measures and promote the benefits recognized in RSA 374-F:3, IX, and the public utilities commission should give due consideration to such programs. Such programs could be funded from a portion of the system benefits charge currently dedicated to energy efficiency programs.

268:7 Environmental Disclosure. The public utilities commission shall establish reporting requirements that will inform all customers on an ongoing basis about the resource mix and environmental characteristics of the electrical service that they take.

268:8 Expenditure on Renewable Energy Education. As part of the effort to educate the public about electric utility restructuring and their ability to choose suppliers, the public utilities commission shall make certain that a reasonable amount of money is expended to inform the public about the various environmental, public health, economic, and energy diversity benefits associated with customers supporting the generation of electricity from renewable energy resources.

268:9 Repeal. RSA 374-F:6, I-II, relative to retail wheeling and restructuring and relative to the competitive retail purchase pilot program, are repealed.

268:10 Effective Date. This act shall take effect upon its passage.

(Approved: May 18, 2002)

(Effective Date: May 18, 2002)