SB 0164

This bill requires appropriations over a 10-year period to fund capital improvements to northern New Hampshire’s electrical transmission system. The bill establishes the northern New Hampshire electrical transmission system improvement fund and specifies its sources of funding.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

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

1 Purpose. The purpose of this act is to expand northern New Hampshire’s electrical transmission system in order to:

IV. Support the state’s goal of having 25 percent of its electrical energy produced from pollution-free generation by 2025.

2 New Chapter; Northern New Hampshire Electrical Transmission System. Amend RSA by inserting after chapter 362-F the following new chapter:

362-G:1 Appropriations of Funds for Improvements to the Northern New Hampshire Electrical Transmission System.

I. The sum of up to a total amount of $155,000,000 shall be appropriated to the public utilities commission through the operating budgets and capital budgets for fiscal years 2009-2020 for the purpose of administering capital improvements to the Coos Loop and other related transmission infrastructure in northern New Hampshire as outlined in the public utilities commission’s report to the general court dated December 1, 2007 entitled “Background Report on New Hampshire Transmission Infrastructure” and in reports before the commission established in 2008, 348 (SB 383). The public utilities commission is hereby authorized to administer these improvements. The public utilities commission shall adopt rules, pursuant to RSA 541-A, relative to the administration of these improvements and relative to the payments under subparagraphs II(a) and (b).

II. The sources of funding for the appropriation made in paragraph I shall be as follows:

(a) Twenty percent shall be paid by the new generation developers to the state treasurer for deposit in the northern New Hampshire electrical transmission improvement fund established under paragraph III at the rate of $105,000 for each developed megawatt of power.

(b) Twenty-five percent shall be paid by New Hampshire ratepayer transmission charges, which allow for the recovery of costs related to the delivery of electricity over high-voltage or transmission system power lines. These amounts shall be paid by electrical utilities to the state treasurer to be deposited into the fund established under paragraph III.

(c) Five percent shall be paid into the fund established under paragraph III from revenue created from New Hampshire issued bonds.

(d) Fifty percent shall be paid from new or existing federally-funded programs dedicated to the realization of the nation’s 2 renewable power goals of having 10 percent of the United State’s electrical power from such sources within the next 4 years and the provision of 150 billion dollars in total funding available over the next 10 years for renewable power projects.

III. There is hereby established the northern New Hampshire electrical transmission system improvement fund. This fund shall be nonlapsing and continually appropriated to the public utilities commission for the purposes of this section.

3 New Subparagraph; Special Fund. Amend RSA 6:12, I(b) by inserting after subparagraph (276) the following new subparagraph:

(277) Moneys deposited in the northern New Hampshire electrical transmission system fund established under RSA 362-G:1.

The Public Utilities Commission and Treasury Department state this bill will increase state revenues and expenditures and county and local expenditures by an indeterminable amount in FY 2010 and each year thereafter. This bill increases the state’s bonded indebtedness by $7,750,000. There will be no fiscal impact on county and local revenue.

This bill appropriates a sum of up to $155,000,000 of restricted revenues to the Public Utilities Commission through the operating and capital budgets for FY 2009 to FY 2020 for the purposes of administering capital improvements to the Coos Loop and other related transmission infrastructure in northern New Hampshire as outlined in the Commission’s “Background Report on New Hampshire Transmission Infrastructure” report to the general court dated December 1, 2007 and in reports before the Commission established in 2008, 348 (SB 383).

The Public Utilities Commission states this bill requires appropriations over a ten-year period to fund capital improvements to northern New Hampshire’s electrical transmission system. This bill also establishes the northern New Hampshire electrical transmission system improvement fund, and specifies its sources of funding. The Commission states the bill requires monies received from the following sources be deposited in the fund:

New Generation Developers $ 31,000,000 20%

NH Ratepayers (Through Transmission Charges) $ 38,750,000 25%

New Hampshire Bonds $ 7,750,000 5%

New Or Existing Federally-Funded Renewable Power Programs $ 77,500,000 50%

Total $155,000,000 100%

The Commission estimates state restricted expenditures will increase as follows:

	FY 2010	FY 2011	FY 2012	FY 2013
New Generation Developers			$3,875,000	$3,875,000
NH Ratepayers	$3,875,000	$3,875,000	$3,875,000	$3,875,000
New Hampshire Bonds	$7,750,000
Federally-Funded Programs	$7,750,000	$7,750,000	$7,750,000	$7,750,000
Total Revenues	$19,375,000	$11,625,000	$15,500,000	$15,500,000

Because the bill stipulates new generation developers will be charged the rate of $105,000 per megawatt for each “developed megawatt of power,” the Commission assumes revenue from this portion of the funding sources will not start until two years after the bill is enacted. Future monies are assumed to be received evenly over the remainder of the ten-year period. Therefore, fund revenue from new generation developers would increase by approximately $3,875,000 in FY 2012 and each year thereafter ($31,000,000 total paid by new developers/$105,000 per megawatt = 295.24 megawatts/8 years = 36.9 megawatts per year x $105,000).

The Commission assumes ratepayers’ transmission charges will be paid evenly over the ten-year period, increasing state restricted revenues by $3,875,000 in FY 2010 and each year thereafter ($38,750,000 total paid by ratepayers/10 years). The Commission assumes monies from the federally-funded programs are received equally over the ten-year period, increasing state restricted revenues $7,750,000 in FY 2010 and each year thereafter ($77,500,000 total from federal funds/10 years), and that the New Hampshire bonds will be issued when the bill is enacted, increasing state restricted revenues by $7,750,000 in FY 2010.

The Commission estimates state, county, and local expenditures will increase as follows:

	FY 2010	FY 2011	FY 2012	FY 2013
Interest Payments On Bonds	$387,500	$387,500	$387,500	$387,500
State, County, And Local Government Ratepayer Costs	$232,320	$232,320	$232,320	$232,320
Fund Revenues	$19,375,000	$11,625,000	$15,500,000	$15,500,000
Total Expenditures	$19,994,820	$12,244,820	$16,119,820	$16,119,820

The Commission assumes fund revenues will be expended on capital improvements in the year they are received. The Commission also assumes interest on New Hampshire bonds will be paid from the fund at 5% per year, increasing state restricted expenditures $387,500 in FY 2010 and each year thereafter ($7,750,000 bonds x 5%). The Commission estimates state, county, and local governments constitute 6% of the electric ratepayers. Given the total amount to be paid by ratepayers each year, state, county, and municipal expenditures will increase by $232,320 in FY 2010 and each year thereafter ($3,875,000/11,000,000,000 kilowatt hour sales to all customers = $0.000352 rate per kilowatt hour x 660,000,000 kilowatts purchased by state, county, and municipalities). The Commission states there was not sufficient information to determine what portion of these costs will be expended at the state, county, or local levels.

The Commission states it cannot predict whether anticipated revenues from new generation developers and federal programs will be met and believes if revenues decline over the ten-year period, utilities responsible for construction of transmission facilities may not be able to complete projects.

The Commission states additional business profits, business enterprise, or state, county, and local property tax revenue may result from newly developed transmission and generation projects. However, there is no way to predict whether or how revenue may change, so the full fiscal impact cannot be determined at this time.

The Treasury Department states this bill is unclear as to which fund will pay future debt service on the bond issue. Also, the Department is unable to determine from the bill the timing and amount of a bond issue or multiple bond issues or the timing or amount of debt service related to that bond issue(s).