Bill Text: NH SB462 | 2020 | Regular Session | Introduced


Bill Title: Relative to state energy management.

Spectrum: Bipartisan Bill

Status: (Engrossed) 2020-09-23 - Died on Table [SB462 Detail]

Download: New_Hampshire-2020-SB462-Introduced.html

SB 462-FN - AS INTRODUCED

 

 

2020 SESSION

20-2854

06/03

 

SENATE BILL 462-FN

 

AN ACT relative to state energy management.

 

SPONSORS: Sen. Bradley, Dist 3; Sen. Watters, Dist 4; Sen. Fuller Clark, Dist 21; Rep. Backus, Hills. 19; Rep. Merner, Coos 7

 

COMMITTEE: Energy and Natural Resources

 

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ANALYSIS

 

This bill:

 

I.  Increases the measures that may be taken to reduce energy costs and meet state energy goals.

 

II.  Clarifies the eligibility of power purchase agreements to be eligible mechanisms for reducing energy costs and meeting state energy goals.

 

III.  Modifies the way funds remaining in energy utility budgets are distributed.

 

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

20-2854

06/03

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Twenty

 

AN ACT relative to state energy management.

 

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

 

1  Department of Administrative Services; Energy Management; State Policy.  Amend RSA 21-I:19-a to read as follows:

21-I:19-a  Energy Efficient Measures; State Policy.

I.  It shall be the policy of the state of New Hampshire to [maximize] prioritize public health and environmental quality, while maximizing economic benefits through the use of economical energy [efficient measures] efficiency measures including, but not limited to, energy conservation, strategic electrification, fuel switching, cogeneration, renewable energy, and energy storage in the construction, renovation, operation, and maintenance of [buildings] properties owned or leased by the state.  Further, it shall be the policy of the state to encourage municipalities to incorporate such measures into their [buildings] properties to the greatest extent possible.

II.  The department of administrative services shall consider energy measures including, but not limited to, energy conservation, energy efficiency, strategic electrification, fuel switching, cogeneration, renewable energy, energy storage, and the energy life cycle [costing of energy cost saving measures a] costs as significant [criterion] criteria in its construction, renovation, operation, and purchasing and leasing decisions.

2  State Facility Energy Cost Reduction; Definitions.  RSA 21-I:19-b is repealed and reenacted to read as follows:

21-I:19-b  Definitions.  In this subdivision:

I.  "Cogeneration" means the simultaneous production of electric energy and other forms of useful energy, such as steam or heat, which are used for industrial, commercial, heating, or cooling purposes from a single fuel input.

II.  "Date of project implementation" means the expected date established in the energy performance contract that the construction, improvement, repair, alteration, or betterment is to be completed and become operational.  If the energy performance contract includes more than one energy cost saving measure, the "date of project implementation" may be alternatively defined by the contracting state agency or municipality to be the date that the last of the energy cost saving measures is expected to become operational.

III.  "Demand response program" means a program under which the state receives payment for voluntarily reducing electricity demand in response to grid instability as dictated by the regional independent system operator or in response to high wholesale electricity prices.

IV.  "Energy cost saving measure" means any construction, improvement, repair, alteration, or betterment of any building or facility or any equipment, fixture, or furnishing to be added to or used in any building or facility that will be a cost effective energy-related project.  This shall include any project that will lower energy or utility costs in connection with the operation or maintenance of such building or facility and will achieve energy cost savings sufficient to recover any project costs or incurred debt service within 20 years from the date of project implementation.

V.  "Energy performance contract" means an agreement for the provision of energy services or equipment or both.  This shall include, but shall not be limited to, energy conservation-enhancing projects in buildings and alternate energy technologies, in which a private sector person or company agrees to finance, design, construct, install, maintain, operate, or manage energy systems or equipment to improve the energy efficiency of, or produce energy in connection with, a state government agency or facility in exchange for a portion of the energy cost savings or specified revenues.  The level of payments made would be contingent upon measured energy cost savings or energy production.

VI.  "Energy storage" refers to batteries, compressed air energy systems, heat storage, or any other technology, system, or device capable of capturing energy produced at one point in time and storing it as some contained form of energy that the technology, system, or device can release 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.

VII.  "Fuel switching" means replacing an end-use technology such as a heating system with one that uses a different direct or indirect energy source to reduce energy costs, improve energy factor, reduce energy consumption, or lower greenhouse gas emissions.

VIII.  "Positive cash flow financing" means an agreement among an agency, a capital leasing firm, and a provider of design-build energy management services under which the leasing cost of the project, including all interest payments, is equal to or less than the energy cost the project avoids.

IX.  "Power purchase agreement (PPA)" means an agreement for the design, permitting, financing, installation, operation, and maintenance of a cogeneration or renewable energy system, including electric and thermal, on a host customer's property.  The host customer agrees to purchase the system's energy output at an agreed upon price for a set time period.

X.  "Renewable energy," for the purposes of this section, means wind energy; energy generated from eligible biomass fuel; geothermal energy, if the geothermal energy output is in the form of useful thermal energy; energy generated from hydrogen derived from biomass fuels or methane gas; ocean thermal, wave, current, or tidal energy; energy generated from methane gas; solar thermal or electric energy; or hydroelectric energy.

XI.  "Shared-savings contract" means an agreement under which a private sector person or company undertakes to design, implement, install, operate, and maintain improvements to the agency's or municipality's procedures, equipment, or facilities, and the agency or municipality agrees to pay a contractually specified amount of measured or estimated energy cost savings.

XII.  "Strategic electrification" means the replacement of combustion technologies, which utilize primary fuels including but not limited to biomass, oil, or natural gas, to electric powered measures in order to reduce energy costs, improve energy factor, reduce energy consumption, or lower greenhouse gas emissions.

3  Energy Performance Contracting.  Amend RSA 21-I:19-d, I to read as follows:

I.  Any state agency or municipality may enter into an energy performance contract for the purpose of undertaking or implementing energy measures including, but not limited to, energy conservation, energy efficiency, strategic electrification, fuel-switching, cogeneration, [or alternate] renewable energy [measures], or energy storage [in a facility].  An energy performance contract may include, but shall not be limited to, options such as joint ventures, shared-savings contracts, positive cash flow financing, [or] energy service contracts, power purchase agreements, or any combination thereof, provided that at the conclusion of the contract the agency will receive title to the energy system being financed, if the agency so desires.

4  Energy Performance Contracting.  Amend RSA 21-I:19-d, II(c) to read as follows:

(c)  Upon the approval by the [IEEC and] governor and council, the agency may enter into an energy performance contract with the person or company whose proposal is selected as the most qualified based on the criteria established by the agency.

5  Energy Performance Contracting.  Amend RSA 21-I:19-d, II(f) to read as follows:

(f)  Any energy performance contract [should] shall require [the contractor to include all energy efficiency improvement in selected buildings that are calculated to] the state to recover all implementation costs within 20 years from the date of project implementation at existing energy prices.  The contract shall require that the public utility or energy services provider be repaid only to the extent of energy cost savings guaranteed by the contractor to accrue over the term of the contract.

6  New Paragraph; Purchase of Electricity by Competitive Bidding.  Amend RSA 21-I:17-b by inserting after paragraph II the following new paragraph:

III.  The solicitation of competitive bids for electric power supply shall only apply to wholesale power purchased from the electric grid and does not apply to power purchase agreements under RSA 21-I:19-d, which will result in power generated on state-owned property.  Nothing in this section shall be interpreted to mean that any energy contract entered into under RSA 21-I:19-d shall not be subject to competitive bidding.

7  Distribution of Energy Cost Savings.  Amend RSA 21-I:19-e to read as follows:

21-I:19-e  Energy Cost Savings Revert to General Fund.  [The cost savings remaining after meeting the obligations under an energy performance contract, shared-savings contract, or lease of energy saving equipment or services or any similar program] At the end of each biennium, 50 percent of the general funds remaining in an agency's energy costs budget shall revert to the state energy investment fund established in RSA 21-I:19-f.  All remaining budgeted energy funds shall revert to the general fund.

8  State Energy Investment Fund.  Amend RSA 21-I:19-f to read as follows:

21-I:19-f  State Energy Investment Fund.  There is hereby established [an] a state energy investment fund into which shall [only] be deposited moneys received by the state for participating in demand response, [or] utility or public utility commission programs, [or both] energy cost savings distribution as defined in RSA 21-I:19-e, or the sale of renewable energy certificates, as defined by RSA 362-F:6, for state-owned renewable thermal and electricity projects.  The state treasurer may invest moneys in the fund as provided by law, with interest received on such investment credited to the fund.  Moneys in the fund shall be nonlapsing and continually appropriated to the division of plant and property to be used exclusively to fund energy efficiency or renewable energy projects and energy efficiency or renewable energy contracts; to reimburse the department of administrative services, division of public works design and construction, for costs of providing construction administration services including, but not limited to, design and oversight of design and construction of energy saving or renewable energy measures; and to reimburse state agencies for [demand response] program expenses or completing energy saving or renewable energy measures.

9  Application of Receipts.  Amend RSA 6:12, I(b)(271) to read as follows:

(271)  Moneys deposited in the state energy investment fund established in RSA 21-I:19-f.

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

 

LBAO

20-2854

11/13/19

 

SB 462-FN- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to state energy management.

 

FISCAL IMPACT:      [ X ] State              [    ] County               [    ] 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

$0

Indeterminable

Indeterminable

Indeterminable

Funding Source:

  [ X ] General            [    ] Education            [ X ] Highway           [ X ] Other - Various Government Funds/ State Energy Investment Fund

 

 

 

 

 

METHODOLOGY:

This bill increases the measures that may be taken by the State to reduce energy costs and meet state energy goals, clarifies the eligibility of power purchase agreements as eligible mechanisms for reducing energy costs and meeting state energy goals, and modifies how unspent utility appropriations are distrubuted.  The Department of Administrative Services assumes:

  • Appropriations for energy costs will continue to be budgeted in expenditure class lines 023.  Currently, RSA 9:16-a, II-a(a) prevents such appropriations from being transferred into  appropriations for any other purpose.  
  • Unexpended general fund appropriations in class 023 lapse to the general fund.  Under this bill, unexpended general fund appropriations at the end of the biennium would be split equally between the State General Fund and the State Energy Investment Fund. This would reduce funds returned to the general fund and increase funds for energy-related projects for state agencies that will reduce energy expenditures.
  • The ability to reinvest a portion of unexpended utility appropriations is intended to be an incentive for agencies to manage energy use and spending.

 

The Department indicates this bill will not necessitate additional appropriations and, over time, may result in a reduction in utility expenditures.

 

AGENCIES CONTACTED:

Department of Administrative Services

 

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