Bill Text: NH HB715 | 2019 | Regular Session | Amended


Bill Title: Relative to electrical energy storage.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Engrossed) 2019-05-15 - Rereferred to Committee, Motion Adopted, Voice Vote; 05/15/2019; Senate Journal 16 [HB715 Detail]

Download: New_Hampshire-2019-HB715-Amended.html

HB 715-FN - AS AMENDED BY THE HOUSE

 

20Mar2019... 0742h

2019 SESSION

19-0764

06/10

 

HOUSE BILL 715-FN

 

AN ACT relative to electrical energy storage.

 

SPONSORS: Rep. Oxenham, Sull. 1; Rep. Moffett, Merr. 9; Rep. Cushing, Rock. 21

 

COMMITTEE: Science, Technology and Energy

 

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AMENDED ANALYSIS

 

This bill establishes target goals for energy storage capacity.  The bill also requires the public utilities commission to adopt rules or undertake proceedings to achieve the target goals.

 

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

20Mar2019... 0742h 19-0764

06/10

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Nineteen

 

AN ACT relative to electrical energy storage.

 

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

 

1  Findings; Public Utilities; Energy Storage.  Energy storage has the potential to increase the utilization of renewable energy in New Hampshire and improve the state’s fuel diversity portfolio, while reducing New Hampshire families’ and businesses’ over dependence on natural gas and minimizing their exposure to volatile natural gas prices.  Enabling greater use of renewable energy reduces air pollution, including both toxic chemicals and particulate matter, thereby lessening the electricity system’s negative impacts on both public health and environmental quality.  Innovative technologies like energy storage can also stimulate investment and employment in the state, thereby making a positive contribution to New Hampshire’s economy.  Energy storage also has the potential to significantly reduce New Hampshire’s effective peak demand for electricity.  Reducing peak electricity demand is in the public interest because such demand disproportionately drives New Hampshire families’ and businesses’ energy cost burden.  Electric system reliability requires the transmission and distribution system to be built out to meet peak demand, with the result that ratepayers must often pay for system expansions and upgrades that will lie idle the vast majority of the year.  Furthermore, the generation units that grid operators call on to meet peak demand are generally the most inefficient and thus the most expensive units.  Such generation units also tend to be the most polluting, and thus account for a disproportionate share of the electricity system’s negative public health and environmental impacts.  For all these reasons, the general court finds it is in the public interest to stimulate the deployment of energy storage in New Hampshire.

2  New Chapter; Energy Storage.  Amend RSA by inserting after chapter 374-G the following new chapter:

CHAPTER 374-H

ENERGY STORAGE

374-H:1  Definitions.  In this chapter:

I.  "Commission" means the public utilities commission.

II.  “Behind-the-meter storage” means an energy storage project that is installed on a retail electricity customer's premises and is electrically connected to the customer's side of the electric utility meter.

III.  “Bring your own device” means a program for encouraging non-utility owned, and especially retail-customer owned, behind-the-meter energy storage to provide the greatest value possible to the electricity system, particularly in terms of peak reduction and avoided transmission and distribution costs.  Such a program shall compensate participating behind-the-meter energy storage for the value it provides to the electricity system.

IV.  "Energy storage" means batteries, flywheels, compressed air energy systems, sensible heat storage or any other technology, system, or device capable of taking electricity and storing it as some form of energy the technology, system, or device can either convert back into electricity or use to displace an electrical load at a later time.  Such term shall include standalone technologies, systems, and devices, as well as those co-located with or incorporated into a renewable energy source.

V.  "Energy storage project" means an individual energy storage system or an aggregation of multiple energy storage systems.

VI.  “Front-of-the-meter storage” means any energy storage that is not behind-the-meter storage.

VII.  "ISO-New England" means the Independent System Operator New England or any successor entity.

VIII.  "Local network service" means the term as defined in ISO-New England's transmission, markets, and services tariff, section II.

IX.  "Non-utility" means any entity that is not a utility that develops, builds, owns, operates, or assists in the operation of one or more energy storage projects, including retail customers that buy behind-the-meter storage installed on their property.

X.  "Peak demand" means the total combined annual coincident peak energy demand of all utility service territories in New Hampshire.

XI.  "Regional network service" means the term as defined in ISO-New England's transmission, markets, and services tariff, section II.

XII.  "Renewable energy source" means a Class I, Class II, or Class IV renewable energy source as defined in RSA 362-F:4.

XIII.  "Utility" means any entity that distributes electricity to retail customers or owns part of the electrical transmission system in New Hampshire.

XIV.  "Wholesale electricity markets" means any energy, capacity, or ancillary service market that ISO-New England operates.

374-H:2  Energy Storage Targets.

I.  The commission shall ensure sufficient energy storage capacity is deployed on the electricity system to reduce the peak demand by 2 percent when discharging coincidentally, by December 31, 2022.  The commission shall measure this reduction by using the 2018 peak demand as a baseline.  In order to achieve this target, the commission shall create programs and tariffs, or tariff riders, that enable energy storage to be compensated for services it provides.

II.  Within one year of the effective date of this section, the commission shall initiate a proceeding to determine if a higher energy storage target than that established in paragraph I would provide net benefits to ratepayers. This proceeding shall consider:

(a)  Energy costs that energy storage projects might avoid, including but not limited to potential reductions in ISO-New England energy and capacity market clearing prices.

(b)  Transmission and distribution costs that energy storage projects might avoid, including but not limited to deferring or avoiding the need for new transmission or distribution infrastructure as well as reducing regional and local network service charges.

(c)  Any potential ability energy storage projects might have to reduce electricity price volatility.

(d)  Any potential grid reliability and resiliency benefits energy storage projects might provide.

(e)  Any environmental or renewable portfolio standard compliance costs energy storage might help avoid or reduce through such means as enabling more cost-effective renewable energy integration, reducing emissions from less efficient peaking power plants, and reduced cycling at thermal power plants.

(f)  The likely cost to ratepayers of a higher target.

(g)  Any other benefit the commission deems relevant.

III.  The commission shall complete the proceeding under paragraph II no later than December 31, 2022.

IV.  If the commission, following the proceeding under paragraph II, finds a higher target than the one specified in paragraph I would provide net benefits to ratepayers, it shall raise the target to up to 15 percent of peak demand.

(a)  The commission shall establish a compliance timeline for the higher target to ensure that it is reached by December 31, 2030.  The compliance timeline shall also require that enough energy storage capacity to reduce peak demand by at least an additional one percent per year above the paragraph I target is built each year following December 31, 2022, until the full target is met.

(b)  Nothing in this paragraph shall affect the compliance timeline paragraph I establishes for the initial target.

374-H:3  Target Implementation.

I.  Within one month of the effective date of this section, the commission shall initiate rulemaking or proceedings relative to programs and tariffs or tariff riders, or both, that implement the provisions of this chapter.  The commission shall determine the amount of megawatts of power and megawatt-hours of energy storage capacity needed to reduce peak demand by 2 percent.  The commission shall complete this rulemaking or issue orders no later than one year after the effective date of this section.

II.  Subject to paragraph V, the commission's regulations or orders shall ensure non-utilities develop and own at least 1/2 of the energy storage capacity required under RSA 374-H:2.  The commission's regulations or orders shall create a preference for non-utility energy storage projects that avoid or reduce transmission and distribution costs.  Such avoided or reduced costs shall include, but are not limited to, deferring the need for new distribution and transmission infrastructure or reducing the utility's regional and local network charges.

III.  The commission shall ensure that any utility proposed behind-the-meter energy storage project or program shall incorporate a meaningful opportunity for non-utilities to develop and own a significant portion of the energy storage systems that comprise the project or that will be developed as part of the program.

IV.  If the commission finds that non-utilities can prudently develop more than 1/2 of the energy storage capacity required to meet a target under RSA 374-H:2, the commission shall give a preference to such non-utility energy storage projects over utility energy storage projects.

V.  If the commission finds that a non-utility cannot develop enough energy storage projects to meet its share of a target under RSA 374-H:2, the commission shall allow such utility to develop and own whatever additional number of energy storage projects are needed to meet such target.

VI.  Notwithstanding any provision of RSA 374-F or RSA 374-G, the commission’s regulations or orders shall require a utility to compensate a non-utility for the value of all transmission or distribution costs the utility will likely avoid because of the non-utility energy storage project.  

(a)  For behind-the-meter storage, the regulations or orders shall accomplish this by creating a “bring your own device” peak reduction program.  As part of this program, the commission shall create special tariffs or other mechanisms, including but not necessarily limited to time-of-use rates, that ensure utilities compensate such projects for their peak reduction value, as well as the value of all transmission or distribution costs the utility will likely avoid because of such projects.

(b)  For front-of-the-meter storage, the regulations or orders shall accomplish this through any mechanism the commission deems just and reasonable.

(c)  Notwithstanding any provision of RSA 374-F or RSA 374-G, if a non-utility energy storage project is not eligible or chooses not to participate in wholesale electricity markets, the commission's regulations or orders shall enable the non-utility to be compensated for any energy costs avoided because of the energy storage project.

(d)  If the non-utility energy storage project avoids the need for a new distribution or transmission project the utility could have added to its rate base, the commission may allow the utility to include all or part of the value of the corresponding portion of its payment to the non-utility in its rates.  However, the commission may allow this only if it finds doing so is just and reasonable.

VII.  Notwithstanding any provision of RSA 374-F or RSA 374-G, the commission's regulations or orders shall also provide that a utility may develop and own front-of-the-meter energy storage projects that reduce transmission or distribution costs.

(a)  A utility may contractually sell the right to bid such utility-owned energy storage projects that serve a transmission or distribution purpose into wholesale electricity markets to a non-utility.  Any such contract shall provide that any compensation the non-utility pays to the utility for this right shall in no way depend upon the energy storage project’s performance in wholesale electricity markets, such that the non-utility bears all risk of project underperformance in the wholesale market.

(b)  The utility shall use all compensation a non-utility pays the utility for the contractual right under subparagraph (a) to reduce transmission and distribution charges for all ratepayers.

(c)  A utility may not give a contractual right under subparagraph (a) to a non-utility that is an affiliate of the utility.

VIII.  Nothing in this section shall give a utility the right to bid any energy storage project it owns into wholesale electricity markets itself, or to otherwise directly participate in wholesale electricity markets.

IX.  The provisions of RSA 374-H:3, VI-VIII shall remain in effect after the targets in RSA 374-H:2 are met.

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

 

LBAO

19-0764

Revised 2/15/19

 

HB 715-FN- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to electrical energy storage.

 

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

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2020

FY 2021

FY 2022

FY 2023

   Appropriation

$0

$0

$0

$0

   Revenue

$0

$0

$0

$0

   Expenditures

Indeterminable

Indeterminable

Indeterminable

Indeterminable

Funding Source:

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

 

 

 

 

 

COUNTY:

 

 

 

 

   Revenue

$0

$0

$0

$0

   Expenditures

Indeterminable

Indeterminable

Indeterminable

Indeterminable

 

 

 

 

 

LOCAL:

 

 

 

 

   Revenue

$0

$0

$0

$0

   Expenditures

Indeterminable

Indeterminable

Indeterminable

Indeterminable

 

METHODOLOGY:

The Public Utilities Commission states the effect of this bill on electric rates is indeterminate. The fiscal impact will depend upon the peak reduction targets, the amount of storage needed to meet those targets and how effectively the installed storage reduces peak loads and meets other potential storage benefits, such as avoiding or deferring transmission and distribution system upgrades.  Proposed RSA 374-H:3 II(b) states that the Commission's rules must "require a utility to compensate a non-utility for the value of all the transmission and distribution cost the utility will likely avoid because of the energy storage project.  If the non-utility energy storage project avoids the need for a new distribution or transmission project the utility could have added to its rate base, the commission may allow the utility to include all or part of the value of the corresponding portion of its payment to the non-utility in its rate base." That provision has the potential to negate any ratepayer savings and, depending on whether and how much the Commission would allow the utility to recover through its rates, could result in added costs to ratepayers, including state, county, and local governments. The potential added costs would include the full amount paid to the non-utility associated with the avoided transmission and distribution costs plus additional amounts recovered by the utility for an avoided project that it never had to construct.

 

The bill also requires the development of time-of-use rates, which will require both PUC staff and utility resources; however, the PUC has not estimated a cost for that work. The bill also will require a system to notify customers of required energy storage system discharge times.  In addition, some costs will be incurred in connection with the need to communicate with the storage devices.  These additional costs are not known at this time.

 

AGENCIES CONTACTED:

Public Utilities Commission

 

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