New Hampshire Senate Bill 321 slated for House committee action on Tuesday
The New Hampshire House Science, Technology and Energy Committee is set to hold an April 19 executive session on state Senate Bill 321, which would allow local electricity producers that can’t participate in net metering and have the capacity to generate 1 to 5 megawatts (MW) of renewable energy to receive credits when they transmit energy to the grid.
It’s a proposed pilot program that supporters say could align markets and incentives better than net metering, while opponents like Eversource, which is New Hampshire’s largest electric utility, argue it would permit these local electricity producers to use the existing power grid to sell and distribute intrastate power directly to users rather than via existing utilities.
New Hampshire Sen. David Watters (D), the sponsor of the bipartisan SB 321, said the measure attempts to update state law on net metering by answering questions about how to enable market-based alternatives to net metering while simultaneously avoiding ratepayer cross subsidies or cost shiftings by allowing two parties not involved in the current market managed by Independent System Operator New England (ISO-NE) to test the feasibility of electricity sales in a pilot program.
“One way to address that was to try to enable in-state distributed generation and storage of less than 5 megawatts that produce power for sale and resale for New Hampshire customers and how to let it be accurately credited,” Watters said during an April 12 public hearing held by the N.H. House Science, Technology and Energy Committee.
Watters said he thinks a pilot program “makes a lot of sense” because allowing such sales transactions means the local power generators could avoid using the existing transmission infrastructure, saving them money and spurring competitive power prices.
However, one of Eversource’s biggest concerns with SB 321 is the issue of jurisdiction, testified Eversource Director of Government Relations Donna Gamache during the committee hearing last week.
“We think the state does not have the jurisdiction over these types of transactions,” said Gamache.
In speaking with officials from the Federal Energy Regulatory Commission (FERC), Gamache said “they are confident that while the intent is that these are intrastate transactions only using the distribution system, Eversource, unlike the other utilities in the state, represents well over 70 percent of the state in our service territory. We would have to monitor a project that used our distribution feeder and that’s very difficult to do, especially given our geographic area.”
She added that Eversource would need to be able to prove that one of these small, local generators was only using just the Eversource distribution network. Otherwise, it would violate Eversource’s agreement with ISO-NE, which manages the transmission system.
And there’s a good reason why ISO-NE manages the transmission system, said Gamache. “It’s to ensure reliability,” she said.
ISO-NE has to know what’s happening on the system so that it can manage the system, she said, as well as to charge for rate recovery and to ensure that all who use the Eversource transmission system are paying their fair share of it.
“So if we do get past that and were able to come up with some language that gave us some more comfort, we think that there are some questions that probably the PUC or the state Department of Energy would have to answer and that is if you can prove that there are in fact savings, which would have to be bundled and they would have to find a way to calculate that to bundle it and to get it back; because if this were to happen, those savings would not naturally go back to ratepayers,” said Gamache.
The Edison Electric Institute (EEI), which represents all U.S. investor-owned electric companies, agrees with Eversource.
“Net metering policies allow customers that have installed generation systems on their side of the meter to sell excess energy to their investor-owned electric company,” wrote Shelby Linton-Keddie, EEI’s senior director of state regulatory policy, and Lopa Parikh, EEI’s senior director of federal regulatory affairs, in April 15 comments filed with the N.H. House Science, Technology, and Energy Committee.
“SB 321 appears to seek to provide limited producers, as defined in the statute, a venue to sell energy to entities other than the investor-owned electric company, specifically non-residential customers or to competitive suppliers,” the EEI experts wrote. “This proposal raises jurisdictional issues under the Federal Power Act under which energy sales for resale are the jurisdiction of FERC.”
As Gamache mentioned, Linton-Keddie and Parikh said that SB 321 lacks clarity as to how transmission and distribution charges and credits would be treated and fails to address jurisdictional concerns as transmission assets are under FERC’s jurisdiction.
“The intent of the proposed legislation appears to be to limit the amount of generation purchased at wholesale as well as blur the line (and responsibility) for transmission charges otherwise paid by certain customers,” they wrote. “Accordingly, additional clarity is needed on the jurisdictional and operational issues.”
Any additional costs created by this legislation, if passed, should be recoverable on a full and current basis by electric companies, according to their letter. “This will ensure that the average customer is not being forced to pay for the transmission costs that are being avoided by the customers participating in the pilot,” the EEI experts wrote.
Energy expert and Lebanon (N.H.) Assistant Mayor Clifton Below, a city councilman who serves as chairman of the Lebanon Energy Advisory Committee, testified that SB 321 would create a pilot program to allow another form of customer and community choice of local power generation and storage.
“It would be a market-based alternative to net metering for under-5 megawatt generators,” Below said. “It is intended or structured to try to do this without any cross subsidies and by sending price signals that are actual market-based and reflect actual value produced, as actually measured and documented.”
By bringing market-priced solutions to the renewable energy sector, the bill “could prove to be more economically and technologically efficient,” he testified during the committee hearing.
Griffin Roberge with the New Hampshire Department of Energy said the state “is neutral” on SB 321 but agreed with Gamache’s concerns about potential violations of the ISO-NE agreements.
And while the thrust of the bill is to create a pilot program for these types of transactions, SB 321 does not contain defined limits on size, scale, time periods, or end dates for any pilot, nor are there any specific provisions for study or reporting regardless of the results of the approved pilot programs, said Roberge.
