Bill Text: NH SB167 | 2023 | Regular Session | Amended

New Hampshire Senate Bill 167 (Prior Session Legislation)

Bill Title: Relative to green hydrogen energy and infrastructure.

Spectrum: Partisan Bill (Democrat 7-0)

Status: (Engrossed - Dead) 2023-05-04 - Inexpedient to Legislate: Motion Adopted DV 187-186 05/04/2023 House Journal 13 P. 44 [SB167 Detail]

Download: New_Hampshire-2023-SB167-Amended.html

SB 167-FN-LOCAL - AS AMENDED BY THE SENATE

02/09/2023 0407s

2023 SESSION

23-1050

10/05

SENATE BILL 167-FN-LOCAL

AN ACT relative to green hydrogen energy and infrastructure.

SPONSORS: Sen. Watters, Dist 4; Sen. Perkins Kwoka, Dist 21; Sen. Soucy, Dist 18; Sen. Fenton, Dist 10; Sen. Rosenwald, Dist 13; Sen. Altschiller, Dist 24; Rep. McGhee, Hills. 35

COMMITTEE: Energy and Natural Resources

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

ANALYSIS

This bill adds green hydrogen facilities and infrastructure to renewable electric generation which provides fuel diversity, establishes green hydrogen business tax and property tax reduction programs, and establishes a green hydrogen advisory committee established in the department of energy.

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

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

02/09/2023 0407s 23-1050

10/05

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twenty Three

AN ACT relative to green hydrogen energy and infrastructure.

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

1 Legislative Findings.

I. The use of hydrogen derived from a clean energy resource, or green hydrogen, has the potential to be a zero- or very low-carbon source of energy for use in a variety of sectors, including high-heat industrial applications, zero-carbon electricity generation, and the gas distribution system. Green hydrogen will contribute to clean energy jobs in the solar energy, wind energy, energy efficiency, energy storage, electric vehicle industries, and other renewable energy industries.

II. Green hydrogen has the potential to serve as a storage fuel, especially for offshore wind energy, to increase reliability in electricity generation, and to promote the transition of other forms of power generation to a zero-or very low-carbon source of energy. Green hydrogen can play a substantial role as a transportation fuel and as an industrial fuel.

III. Green hydrogen infrastructure will enable New Hampshire businesses to develop generation and manufacturing facilities and take advantage of federal funding and investments from the offshore wind industry.

2 New Paragraphs; The Preservation and Use of Renewable Generation to Provide Fuel Diversity; Definitions Added. Amend RSA 362-H:1 by inserting after paragraph VI the following new paragraphs:

VII. “Green hydrogen” means hydrogen derived from a clean energy resource that uses water as the source of the hydrogen. For purposes of green hydrogen electricity generation and hydrogen transmission, a green hydrogen project may include associated clean energy generation, including regenerative fuel cells, transmission, and other infrastructure. “Green hydrogen” electricity generation means a power plant technology in which an electrical generating unit creates electric power exclusively from electrolytic hydrogen, in a manner that produces zero carbon and co-pollutant emissions, using hydrogen fuel that is electrolyzed using a 100 percent zero carbon emission energy source. The term does not include hydrogen produced using steam reforming or any other conversion technology that produces hydrogen from fossil fuel feedstock.

VIII. “Green hydrogen facility” means any combination of a physically connected generator or generators, associated prime movers, and other associated property, including appurtenant land and improvements and personal property, that are normally operated together to produce 20 average megawatts or more of electric power, in order to:

(a) Produce green hydrogen through electrolysis technology;

(b) Store or transport green hydrogen by means of a green hydrogen pipeline for the transport or storage of green hydrogen or a green hydrogen storage system for the temporary storage of green hydrogen in a vessel, pipeline, or geologic formation; or

IX. “Regenerative fuel cell” means a device that produces hydrogen and oxygen from electricity and water and alternately produces electrical energy and water from stored hydrogen and oxygen.

3 New Sections; Green Hydrogen Production and Infrastructure. Amend RSA 362-H by inserting after section 2 the following new sections:

362-H:3 Green Hydrogen Production and Infrastructure.

I. The production of green hydrogen by a green hydrogen facility shall be eligible for a credit against the business profits tax. A credit of not more than 10 percent of the qualifying costs or $500,000, whichever is the lesser value, for investments in green hydrogen facilities and regenerative fuel cells brought into service after December 31, 2023, shall be applied against the business profits tax under RSA 77-A for a taxable period ending on or after December 31, 2024. No taxpayer may qualify for more than $500,000 in any single taxable period. The aggregate total for this tax credit is $5,000,000. If the total of applicants exceeds the cap, the funds shall be allocated proportionally.

II. The owner of a green hydrogen facility brought into service after December 31, 2023 shall be eligible under RSA 72:74 for the property tax reduction provided as a payment in lieu of taxes as a renewable generation facility, for a period of 5 years.

III. Green hydrogen energy and infrastructure projects with a capacity to generate over 20 MW of energy shall be evaluated and approved by the site evaluation committee under RSA 162-H, which shall have authority over siting, transportation, and storage.

362-H:4 Advisory Committee Established. There is a green hydrogen advisory committee established in the department of energy.

I. The advisory committee shall consist of:

(a) The commissioner of the department of energy, or designee.

(b) The commissioner of the department of business and economic affairs, or designee.

(d) The chair of the site evaluation committee.

(e) The chair of the public utilities commission, or designee.

(f) The chair of the New Hampshire port authority.

II. The advisory committee shall have the following duties:

(a) Examine the production of green hydrogen from any renewable energy source.

(b) Investigate and evaluate existing state and federal laws, regulations and funding sources and recommend legislation related to the production, use, distribution and storage of green hydrogen.

(d) Identify barriers to the widespread development of hydrogen and recommend government policies to catalyze the deployment of hydrogen in the state economy.

(e) Consider a plan to create, support, develop, or partner with a Hydrogen Hub in this state, under federal funding provisions, and determine, how to maximize federal financial incentives to support Hub development.

(f) Consider the construction of a dedicated hydrogen pipeline or network of pipelines to serve users of hydrogen in this state, including power generation, transportation, manufacturing, and energy storage facilities.

(g) Consider facilities that result in the blending of hydrogen into existing natural gas transmission and distribution systems that serve residential, commercial, transportation, and industrial uses, and consider policy recommendations for inclusion of hydrogen production from fossil fuel feedstock.

(h) Streamline the permitting processes for hydrogen facilities and infrastructure, including other carbon use applications and any other issues that the committee deems necessary.

(i) Examine cost-effective industrial rates for hydrogen production and flexible energy generation configurations to maximize federal funding for hydrogen facilities, and serves the long-term interests of ratepayers, and cost-effectively avoids or defers distribution system costs.

(j) Review the safety standards regarding the production, use, distribution and storage of hydrogen by state agencies.

(k) Consider regenerative fuel cell generation by utilities or private entities that provides distribution system benefits, including, but not limited to, avoiding or deferring distribution capacity upgrades, and enhancing distribution system reliability, including, but not limited to, voltage or frequency improvements.

III. The advisory committee shall report to the governor, the president of the senate, the speaker of the house of representatives, the chair of senate energy and natural resources committee, the chair of house science, technology, and energy committee on December 1 of each year on its activities, findings, and recommendations.

4 New Paragraph; Division of Fire Safety; Green Hydrogen Facilities. Amend RSA 21-P:12 by inserting after paragraph VIII the following new paragraph:

IX. Participation in an advisory capacity in state agency siting of green hydrogen facilities, transportation, and storage, and in the permitting and coordination of state agency response to accidents at facilities that produce more than 20 MW of electricity, and associated transportation and storage involving green hydrogen as defined in RSA 362-H, and green hydrogen gas safety, unless pipelines are regulated by the public utilities commission pursuant to RSA 362.

5 New Paragraph; Business Profits Tax; Credit for Green Hydrogen Infrastructure. Amend RSA 77-A:5 by inserting after paragraph XVI the following new paragraph:

XVII. The tax credit computed under RSA 362-H:3, I for green hydrogen production and infrastructure.

6 Repeal; 2029; Business Profits Tax Credit. The following are repealed:

I. RSA 362-H:3, I, relative to the business profits tax credit for investments in green hydrogen facilities and regenerative fuel cells.

II. RSA 77-A:5, XVII, relative to the use of the green hydrogen business profits tax credit.

7 Effective Date.

I. Section 6 of this act shall take effect January 1, 2029.

II. The remainder of this act shall take effect July 1, 2023.

LBA

23-1050

Revised 1/25/23

SB 167-FN-LOCAL- FISCAL NOTE

AS INTRODUCED

AN ACT relative to green hydrogen energy and infrastructure.

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


	Estimated Increase / (Decrease)
STATE:	FY 2023	FY 2024	FY 2025	FY 2026
Appropriation	$0	$0	$0	$0
Revenue	$0	Indeterminable	Indeterminable	Indeterminable
Expenditures	$0	$0	$0	$0
Funding Source:	[ X ] General [ X ] Education [ ] Highway [ ] Other

LOCAL:
Revenue	$0	Indeterminable	Indeterminable	Indeterminable
Expenditures	$0	$0	$0	$0

METHODOLOGY:

This bill adds green hydrogen facilities and infrastructure to renewable electric generation which

provides fuel diversity, establishes green hydrogen business tax and property tax reduction programs, and establishes a green hydrogen advisory committee established in the Department of Energy.

The Department of Revenue Administration is unable to determine the fiscal impact of this proposed legislation because it does not have information on the number of green hydrogen facilities, green hydrogen pipelines, or hydrogen storage systems that would be built after June 30, 2023 or the qualifying costs for each. The Department provided the following assumptions concerning the impact of the bill on state revenues:

There would be an indeterminable increase in Business Profits Tax (BPT) to the extent the proposed BPT credit attracts new or existing business organizations into the green hydrogen industry. The timing of the revenue increase would depend on when the business organization is profitable after June 30, 2023.
Relative to business organizations qualifying for the BPT credit based on plans to acquire new regenerative fuel cell electricity generation that began operation on or after July 1, 2023, BPT revenue from such business organizations could also be reduced by the amount of credit claimed. Any impact would depend on when such regenerative fuel cell electricity generation come online and becomes profitable.
Any increase to the BPT results in an increase to the General Fund and Education Trust Fund starting in FY 2024.
The Department is unable to determine the fiscal impact of the bill on utility property tax revenue because it does not have information on the value of additional utility property that will be installed as a result of this bill. To the extent there are new utility properties installed, there would be an increase in utility property tax revenue and an associated increase to the Education Trust Fund starting in FY 2024.
The provision to allow for five years of payments in lieu of taxes as a renewable generation facility, to the owner of a green hydrogen facility, a green hydrogen pipeline, or a green hydrogen storage system, would result in an indeterminable impact on municipal revenue.

The Department of Energy states this bill would have no fiscal impact on the Department. The Department assumes that the members of the advisory committee would be responsible for undertaking their duties, including writing the annual report, without regular support from staff from the Department of Energy.

AGENCIES CONTACTED:

Departments of Energy and Revenue Administration