HB 1490-FN – AS INTRODUCED
2012 SESSION
12-2017
09/10
HOUSE BILL 1490-FN
AN ACT repealing New Hampshire’s regional greenhouse gas initiative cap and
trade program for controlling carbon dioxide emissions.
SPONSORS: Rep. Bergevin, Hills 17; Rep. Hansen, Hills 6; Rep. Pettengill, Carr 1
COMMITTEE: Science, Technology and Energy
ANALYSIS
This bill repeals New Hampshire’s regional greenhouse gas initiative cap and trade
program for controlling carbon dioxide emissions.
--------------------------------------------------------------------------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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type .
12-2017
09/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twelve
AN ACT repealing New Hampshire’s regional greenhouse gas initiative cap and
trade program for controlling carbon dioxide emissions.
Be it Enacted by the Senate and House of Representatives in General Court
convened:
1 Powers and Duties of Commissioner; Reference Deleted. Amend RSA 125-O:6, I to
read as follows:
I. Develop a trading and banking program to provide appropriate compliance
flexibility in meeting the emission caps established under RSA 125-O:3, III [and
allowance requirements of RSA 125-O:21 and RSA 125-O:22], and to encourage
earlier and greater emissions reductions and the development of new emission
control technologies in order to maximize the cost-effectiveness with which the
environmental benefits of this chapter are achieved.
2 Rulemaking Authority. Amend RSA 125-O:8 to read as follows:
125-O:8 Rulemaking Authority.
[I.] The commissioner shall adopt rules under RSA 541-A, commencing no later
than 180 days after the effective date of this section, relative to:
[(a)] I. The establishment of trading and banking programs as authorized by RSA
125-O:6, I.
[(b)] II. The establishment of a method for allocating allowances and other
emissions reduction units or mechanisms as authorized by RSA 125-O:3, II and III.
[(c)] III. Emissions [and allowance] monitoring, [tracking,] recordkeeping, reporting,
and other such actions as may be necessary to verify compliance with this chapter.
[(d) The method and requirements for auctioning budget allowances under RSA
125-O:21, which may use regional organizations.
(e) Defining eligible projects for early reduction allowances under RSA 125-O:21, IV,
and establishing criteria to quantify and grant such allowances.
(f) Defining eligible projects for offset allowances under RSA 125-O:21, V, and
establishing criteria to quantify and grant such allowances, including the
accreditation of third-party verifiers.
(g) The forms and information required on applications for a temporary or operating
permit required under RSA 125-O:22.
II. The public utilities commission shall adopt rules, under RSA 541-A, to
administer the greenhouse gas emissions reduction fund pursuant to RSA 125O:23.]
3 Compliance Dates. Amend RSA 125-O:9 to read as follows:
125-O:9 Compliance Dates. The owner or operator of each affected source shall
comply with the provisions of this chapter, excluding the subdivision on mercury
emissions, RSA 125-O:11 through 125-O:18, [and the subdivision for CO2 emissions,
RSA 125-O:19 through RSA 125-O:28,] by December 31, 2006.
4 Non-Severability. Amend RSA 125-O:10 to read as follows:
125-O:10 Non-Severability. No provision of [RSA 125-O:1 through RSA 125-O:18 of]
this chapter shall be implemented in a manner inconsistent with the integrated,
multi-pollutant strategy [or RSA 125-O:1 through RSA 125-O:18] of this chapter,
and to this end, the provisions of [RSA 125-O:1 through RSA 125-O:18 of] this
chapter are not severable.
5 Carbon Dioxide Emissions Budget Trading Program; Auction Proceeds. Amend
RSA 125-O:21, II and III to read as follows:
II. The program shall include a statewide annual budget allowance of 8,620,460
tons [during the years 2009 through 2014. Beginning January 1, 2015 and ending
December 31, 2018, the budget shall decline by 215,512 tons per year, resulting in a
10 percent total reduction from the initial budget, after which it shall remain
unchanged until further legislative action] The department shall annually
grant to each affected CO2 source by July 1, 2013 and by July 1, 2014 a
number of allowances equal to 8,404,948 times its historic share of
emissions. For purposes of this paragraph, “historic share of emissions”
means the average CO2 emissions of an affected CO2 source during calendar
years 2007, 2008, 2009, 2010, and 2011 divided by the average CO2 emissions
of all affected CO2 sources during the same time period. Such allowances
shall first be used by each affected CO2 source for compliance with RSA 125O:22, I before any excess can be sold or transferred to another party.
III. The department shall make available for sale at one or more auctions [all]
215,512 of the budget allowances for a given year, except for those granted or
reserved under RSA 125-O:22, VI, 125-O:24, and 125-O:25. The department may
also make available for sale at one or more auctions a portion of future year budget
allowances. Such auctions may be conducted in coordination with other states.
Revenues from the sale of allowances shall be deposited in the greenhouse gas
emissions reduction fund established under RSA 125-O:23.
6 Compliance. Amend RSA 125-O:22, I to read as follows:
I. Each affected CO2 source shall [obtain and] retire a quantity of RGGI allowances
equivalent to its CO2 emissions from fossil-fuel fired generation for each compliance
period. No RGGI allowances obtained after January 1, 2013 may be used for
compliance with this paragraph, except for those granted to the source
under RSA 125-O:21, II.
7 Noncompliance; Fine. RSA 125-O:22, V is repealed and reenacted to read as
follows:
V. For each allowance an affected CO2 source fails to retire as required under
paragraph I, it shall pay a fine of $5 which shall be deposited into the fund
established under RSA 125-O:23. Any fines paid by a public utility pursuant to RSA
362:2 shall not be recoverable through rates.
8 Noncompliance; Fines. Amend RSA 125-O:23 by inserting after paragraph VIII
the following new paragraph:
IX. All proceeds of fines paid under RSA 125-O:22, V shall be allocated by the
commission as an additional source of funding to electric distribution companies for
core energy efficiency programs that are funded by SBC funds.
9 Repeal. The following are repealed:
I. RSA 125-O:3, III(d), relative to carbon dioxide cap.
II. RSA 125-O:20 through 125-O:28, relative to the regional greenhouse gas
initiative.
10 Compliance.
I. The repeal of the regional greenhouse gas initiative program under section 9 of
this act shall not effect each affected CO2 source’s obligation to satisfy the
program’s requirements for the compliance period ending December 31, 2014,
including those contained in adopted rules. All means of enforcement shall remain
in place for these requirements, including the provisions of RSA 125-O:7 and any
permit issued or modified by the department of environmental services in
accordance with RSA 125-O:22, IV.
II. Any affected CO2 source that is a public utility pursuant to RSA 362:2 shall sell
any allowances granted to it under RSA 125-O:21, II that it still holds after meeting
the program’s requirements for the compliance period ending December 31, 2014.
All proceeds from such sale shall be used to reduce the default service rates of the
public utility.
11 Funding of Contracts. All contracts executed before December 31, 2014 that are
funded through the greenhouse gas emissions reduction fund shall remain so
funded according to the terms of those contracts.
12 Effective Date.
I. Sections 5-8 shall take effect January 1, 2013.
II. The remainder of this act shall take effect January 1, 2015.
LBAO
12-2017
Revised 11/23/11
HB 1490-FN - FISCAL NOTE
AN ACT repealing New Hampshire’s regional greenhouse gas initiative cap and
trade program for controlling carbon dioxide emissions.
FISCAL IMPACT:
The Public Utilities Commission and Department of Environmental
Services state this bill will decrease state restricted revenues and
expenditures by approximately $6,525,176 in FY 2013, $13,050,352 in
FY 2014, $13,254,011 in FY 2015 and $13,457,669 in FY 2016, and
decrease state expenditures by approximately $7,000 in FY 2013, and
$13,500 in FY 2014, and each year thereafter. This bill may decrease
county and local revenues and expenditures by an indeterminable
amount in FY 2013 and each year thereafter.
METHODOLOGY:
The Public Utilities Commission (Commission) and Department of
Environmental Services (Department) state this bill amends statutes
for FY 2013 and FY 2014 to no longer require electric generation
facilities located in the State to purchase allowances and repeals the
Regional Greenhouse Gas Initiative (RGGI) cap and trade program for
controlling carbon dioxide emission effective January 1, 2015 and the
Greenhouse Gas Emissions Reduction Fund (GHGERF). The
Commission and the Department state GHGERF is funded by the sale
of NH RGGI allowances and is distributed as grants to fund energy
efficiency projects for citizens, nonprofits, businesses, and
governmental entities. The Commission and Department assume the
following decrease in GHGERF revenue:
Assumed Floor
Price
Number of Allowances Decrease in GHGERF
Revenue
FY 2013
$1.89
3,452,474
$6,525,176
FY 2014
$1.89
6,904,948
$13,050,352
FY 2015
$1.89
7,012,704
$13,254,011
FY 2016
$1.89
7,120,460
$13,457,669
To the extent state, county, and local entities would apply for and
receive GHGERF grants for energy efficiency projects, state, county,
and local restricted revenues will be reduced by an indeterminable
amount in FY 2013 and each year thereafter. The Commission and the
Department have expenditures related to the administration of the
program of $473,328 ($252,071 for the Commission and $221,257 for
the Department). The Commission and Department assume the sale of
the 215,512 allowances per year for FY 2013 and FY 2014 is intended
to provide the Department’s administrative expenses and meet
contractual obligations. As a result only the Commission’s portion of
the administrative cost ($252,071) will be reduced for FY 2013 and FY
2014. Beginning in FY 2015 the entire administrative cost of $473,328
will be reduced.
The Commission and Department assume RGGI will stay in effect
throughout the other New England states where generators would continue
to purchase RGGI allowances and incorporate that cost into their dispatch
bids on the wholesale market. PSNH is the only utility in New Hampshire
with a generation facility required to purchase RGGI allowances. If RGGI
were repealed the direct cost for PSNH to purchase these allowances will be
reduced. PSNH prevailed on its appeal to the Air Resources Board, which
allows PSNH to have 1.5 million free allowances under the Clean Power Act
Bonus Allocation Program per year, necessitating PSNH only purchase 2.5
million allowances. At $1.89 per allowance, this will be $4,725,000 per year
(2,500,000 * $1.89), or $0.0009 per kilowatt hour of default service load in
calendar year 2013 and each year thereafter ($4,725,000/ 5,400,000,000
kilowatt hours). The Commission and Department estimate state
expenditures may decrease by approximately $7,000 in FY 2013 and $13,500
in FY 2014 through FY 2016 (number of default service kilowatt hours
purchased by the state annually = 15,000,000 * $0.0009), based on
information from the Department of Administrative Services. Additionally, to
the extent county and local governments are default PSNH customers, county
and local expenditures may decrease in FY 2013 and each year thereafter.
Because the Commission and Department do not know the kilowatt hours of
default PSNH service purchased by county and local governments, the exact
fiscal impact cannot be determined at this time.