Energy/Utilities

NH's Renewable Portfolio Standards Law Up for Review

December 2011

By Heidi L. Kroll, Government Affairs and Policy Analyst

In the upcoming legislative session, New Hampshire's Renewable Portfolio Standards (RPS) law will be the subject of considerable review and possible reform. Several key reports on the state’s renewable energy initiatives — summarized below — were filed with the Legislature this fall, and at least two bill titles, one in the House and one in the Senate, have been reserved for modifications to the RPS statute during the 2012 session. As part of the RPS review and deliberations, legislators will likely focus on the costs and effectiveness of ratepayer-funded renewable energy initiatives, looking at how best to balance short- and long-term rate impacts, markets and mandates, and energy independence and sustainability for the state. Lawmakers will also be seeking to align energy policies and related costs with their overarching goals for the economy, the business climate, and job growth. What this all will mean for New Hampshire's RPS remains an open question.

Three separate reviews and reports on New Hampshire’s renewable energy initiatives were presented to the Legislature this fall. Legislators will need to sort through the findings and determine the implications for state energy policy. The reports are as follows.

Annual Report on the Renewable Energy Fund: The Public Utilities Commission (PUC) is required to file a report with the Legislature by October 1st of each year. The report must detail how the Renewable Energy Fund (REF) is being used and any recommended changes to such use. Funding for the REF comes from Alternative Compliance Payments made by electricity providers when they are unable to use market mechanisms to comply with the state's RPS law. The latest REF report was filed on October 1, 2011. It shows that nearly $8.5 million has been deposited into the Fund in the last three years — $4.5 million in July 2009, $1.3 million in July 2010, and $2.6 million in July 2011. During the period July 2010 through June 2011, $1 million in REF funds was made available to NH businesses through a competitive RFP and another $1 million was made available through a solar rebate program for businesses. As in years past, Legislators will likely look at how the Fund is being administered, who is receiving the money, how effective the funds are at achieving renewable energy goals, and what the administrative costs are.

Comprehensive Review of the Renewable Portfolio Standards (RPS) Law: In early 2011, the PUC began its legislatively-mandated review of New Hampshire’s RPS law. The review included looking at the four renewable classes, the costs of achieving the RPS goals, distribution of the Renewable Energy Fund, and any recommended changes to the statute. This report was filed November 1st with the Legislature and provides the first comprehensive evaluation of the strengths and weaknesses of New Hampshire’s RPS after its first few years in existence. The report finds that the average cost of RPS compliance during the period 2008-2010 was 0.15 ¢/kWh. It also includes certain suggested modifications to the RPS law, but does not find any need for, or benefit from, overhauling the law. It finds that “Diversifying New Hampshire’s energy portfolio, stabilizing energy costs, and hedging against long-term energy market uncertainty are achievable long term benefits from this statewide renewable energy policy.”

Independent Study of Energy Policy Issues in New Hampshire: Pursuant to Senate Bill 323 (2010), the PUC and the Energy Efficiency and Sustainable Energy (EESE) Board oversaw a comprehensive review and analysis of the state’s energy efficiency and sustainable energy programs and policies. The study was conducted by the Vermont Energy Investment Corporation (VEIC) and resulted in a detailed 350 page report. The September 30th report includes numerous findings and recommendations, including 7 high-level policy recommendations for the Legislature, Executive Branch, state planners and regulators, and consumers. Each of these groups now faces the challenge of digesting the detailed report and weighing the pros and cons of the options it sets forth. The EESE Board will also be tackling this challenge in the coming months, but does not expect to recommend legislative changes for the 2012 session.

 

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Heidi Kroll
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Heidi Kroll at 603-545-3710.