SB 151-FN - AS INTRODUCED

 

 

2021 SESSION

21-0862

10/06

 

SENATE BILL 151-FN

 

AN ACT relative to renewable energy procurement.

 

SPONSORS: Sen. Watters, Dist 4; Sen. Perkins Kwoka, Dist 21; Sen. Sherman, Dist 24; Sen. Rosenwald, Dist 13; Sen. Soucy, Dist 18; Rep. Cushing, Rock. 21

 

COMMITTEE: Energy and Natural Resources

 

-----------------------------------------------------------------

 

ANALYSIS

 

This bill establishes a program for the procurement of renewable energy and the financing of offshore wind energy generation resources in New Hampshire, upon recommendation of the renewable energy procurement commission established in the bill, through the solicitation and development of long-term contracts with distribution companies by the public utilities commission.

 

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

 

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

21-0862

10/06

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Twenty One

 

AN ACT relative to renewable energy procurement.

 

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

 

1  New Subdivision; Renewable Energy Procurement.  Amend RSA 362-F by inserting after section 15 the following new subdivision:

Renewable Energy Procurement

362-F:16 Definitions.  In this subdivision:

I.    Clean energy generation    means either: (a) firm service hydroelectric generation from hydroelectric generation alone; (b) new Class I RPS eligible resources that are firmed up with firm service hydroelectric generation; or (c) new Class I renewable portfolio standard eligible resources, Class II, Class III, and Class IV.

II.     Firm service hydroelectric generation    means hydroelectric generation provided without interruption for one or more discrete periods designated in a long-term contract, including but not limited to multiple hydroelectric run-of-the-river generation units managed in a portfolio that creates firm service though the diversity of multiple units.

III.     Long-term contract    means a contract for a period of 15 to 30 years for offshore wind energy generation or for clean energy generation.

IV.     New Class I renewable portfolio standard eligible resources    means Class I renewable energy offshore wind energy generation.

V.     Class II", "Class III", and "Class IV" energy mean those terms as described and defined in RSA 362:F:4.

VI.     Offshore wind developer    means a provider of electricity developed from an offshore wind energy generation project that is located on the outer continental shelf.

VII.     Offshore wind energy generation    means offshore electric generating resources derived from wind that are Class I renewable energy generating sources, have a commercial operations date on or after January 1, 2018, have been verified by the commission; and operate in a designated wind energy area for which an initial federal lease was issued on a competitive basis after January 1, 2015.

VIII.  "REPC" means the renewable energy procurement committee established in RSA 362-F:20.

362-F:17  Procurement.

I.  In order to facilitate the procurement of renewable energy and the financing of offshore wind energy generation resources in the New Hampshire, not later than June 30, 2022, the renewable energy procurement committee (REPC) shall solicit proposals for offshore wind and other renewable resources; and, provided that reasonable proposals have been received, upon approval of the governor, shall select proposals for energy distribution company submission to the commission.

II.  The timetable and method for solicitations of long-term contracts shall be proposed jointly by the distribution companies and REPC using a competitive bidding process, and, upon approval of the governor shall be subject to review and approval by the commission.  The distribution companies, in coordination with the REPC, shall consult with the attorney general regarding the choice of solicitation methods.  A solicitation may be coordinated and issued jointly with other New England states within ISO-NE or entities designated by those states.  The timetable and method for solicitation, and selection of solicitation proposals of long-term contracts shall be determined by the REPC and selected proposals shall be subject to review and approval by the commission.  A solicitation may be coordinated and issued jointly with other New England states or entities designated by those states.  The distribution companies may conduct, upon approval of the governor, one or more competitive solicitations through a staggered procurement schedule developed by the REPC and the electric distribution companies; provided, that if the REPC determines that reasonable proposals were not received pursuant to a solicitation, the REPC may terminate the solicitation, and may require additional solicitations to fulfill the requirements of this section.

III.  The distribution companies may conduct one or more competitive solicitations through a staggered procurement schedule developed by the distribution companies and the REPC; provided, that the schedule shall ensure that the distribution companies enter into cost-effective long-term contracts for offshore wind energy generation and other renewable energy sources up to approximately 800 megawatts of aggregate nameplate capacity not later than June 30, 2023; and provided further, that solicitations in total shall seek proposals for no less than 600 megawatts of aggregate nameplate capacity of offshore wind energy generation resources, and associated transmission costs.  Such solicitations may inclusively or separately include other renewable energy sources, including Class II, Class III, and Class IV.

IV.  A staggered procurement schedule may be developed by the REPC.  If the REPC, in consultation with the distribution companies and the independent evaluator, determines that reasonable proposals were not received pursuant to a solicitation, the REPC may terminate the solicitation, and may require additional solicitations to fulfill the requirements of this section.

V.  A proposed long-term contract shall be subject to the review and approval of the commission.  As part of its approval process, the commission shall consider recommendations by the attorney general, which shall be submitted to the commission within 45 days following the filing of a proposed long-term contract with the commission.  The commission shall consider the potential costs and benefits of the proposed long-term contract under the criteria in this section and shall approve a proposed long-term contract within 90 days if the commission finds that the proposed contract is a cost-effective mechanism for procuring reliable renewable energy on a long-term basis, taking into account the factors outlined in this section.  A distribution company shall be entitled to cost recovery of payments made under a long-term contract approved under this section.

VI.  In developing proposed long-term contracts, the distribution companies shall consider long-term contracts for renewable energy certificates for energy and for a combination of both renewable energy certificates and energy.  A distribution company may decline to pursue a proposal if the proposal   s terms and conditions would require the contract obligation to place an unreasonable burden on the distribution company   s balance sheet; provided, however, that the distribution company shall take all reasonable actions to structure the contracts, pricing, or administration of the products purchased under this section in order to prevent or mitigate an impact on the balance sheet or income statement of the distribution company or its parent company, subject to the approval of the commission; provided further, that mitigation shall not unreasonably increase costs to ratepayers.  If a distribution company deems all proposals to be unreasonable, the distribution company shall, within 20 days of the date of its decision, submit a filing to the commission.  The filing shall include, in the form and detail prescribed by the commission, documentation supporting the distribution company   s decision to decline the proposals.  Following a distribution company   s filing, and within 3 months of the date of filing, the commission shall approve or reject the distribution company   s decision and may order the distribution company to reconsider any proposal.  If distribution companies are unable to agree on a winning bid following a solicitation under this section, the matter shall be submitted to the REPC which shall, in consultation with the independent evaluator, issue a final, binding determination of the winning bid upon approval of the governor; provided, that the final contract executed shall be subject to review by the commission.  The REPC may require additional solicitations to fulfill the requirements of this section.

VII.  The commission shall adopt rules for this subdivision consistent with this section.  The rules shall:

(a)  Allow offshore wind developers of offshore wind energy generation to submit proposals for long-term contracts consistent with this section;

(b)  Require that a proposed long-term contract executed by the distribution companies under a proposal be filed with, and approved by, the commission before becoming effective;

(c)  Provide for an annual remuneration for the contracting distribution company up to 2.75 per cent of the annual payments under the contract to compensate the company for accepting the financial obligation of the long-term contract, such provision to be acted upon by the commission at the time of contract approval;

(d)  Require associated transmission costs to be incorporated into a proposal; provided that, to the extent there are transmission costs included in a bid, the commission may authorize or require the contracting parties to seek recovery of such transmission costs of the project through federal transmission rates, consistent with policies and tariffs of the Federal Energy Regulatory Commission, to the extent the commission finds such recovery is in the public interest; and

(e)  Mitigate transmission costs, and avoid line loss, to the extent possible and ensure that transmission cost overruns, if any, are not borne by ratepayers.

VIII.  The distribution companies shall each enter into a contract with the winning bidders for their apportioned share of the market products being purchased from the project.  The apportioned share shall be calculated and based upon the total energy demand from all distribution customers in each service territory of the distribution companies.

IX.  Upon the approval of a proposal by the commission, the electric distribution company shall have exclusive authority and control over power purchase agreement contracts, which shall be completed within 90 days.

362-F:18  Public Utilities Commission Evaluation Criteria.

I.  Agreements can be approved if the commission determines that the clean energy resources to be used by a developer under the proposal meet the following criteria:

(a)  Provide adequate energy with enhanced electricity distribution reliability, where there is a clear public need, including, but not limited to a just and reasonable price over the term of the contract;

(b)  Contribute to reducing winter electricity price spikes;

(c)  Are cost effective to electric ratepayers in New Hampshire over the term of the contract taking into consideration potential economic benefits, and greenhouse gas emission reductions and other health and environmental benefits to the ratepayers, and, where feasible, create and foster employment and economic development in New Hampshire;

(d)  Avoid line loss and mitigate transmission costs to the extent possible and ensure that transmission cost overruns, if any, are not borne by ratepayers;  

(e)  Are commercially reasonable;

(f)  Allow long-term contracts for clean energy generation resources to be paired with energy storage systems;