Renewable Portfolio Standard

New Hampshire’s renewable portfolio standard (RPS), established in May 2007, requires the state’s electricity providers -- with the exception of municipal utilities -- to acquire by 2025 renewable energy certificates (RECs) equivalent to 25.2% of retail electricity sold to end-use customers. The RPS includes four distinct standards for different types of energy resources; these are classified as Class I, Class II, Class III, and Class IV.

Class I - New Renewable Energy. This class addresses electricity or “useful thermal energy” generated by any of the following resources, provided the generator began operation after January 1, 2006, except as noted below:

• Wind energy;
• Hydrogen derived from biomass fuels or landfill gas;
• Ocean thermal, wave, current, or tidal energy;
• Methane gas;
• Geothermal systems that began producing thermal energy after January 1, 2013;
• Solar-thermal systems that began producing thermal energy after January 1, 2013;
• Eligible biomass fuels (including the biomass share of certain generators co-fired with fossil fuels);
• Eligible biomass generators that meet emissions criteria and began producing thermal energy after January 1, 2013;
• Solar-electric energy not used to meet Class II;
• The incremental new production of electricity in any year from an eligible biomass, eligible methane source, or hydroelectric generating facility of any capacity, over its historical generation baseline;
• The production of electricity from Class III or IV sources that have been upgraded or re-powered through significant investment;
• “Useful thermal energy,” defined as renewable energy delivered from Class I sources that can be metered and for which fuel or electricity would otherwise be consumed; and
• Biodiesel, up to 1/8th of a provider's non-thermal Class I requirements per year.

Class II - New Solar. This class addresses electricity generated by solar technologies, provided the generator began operation after January 1, 2006.

Class III - Existing Biomass/Methane. This class addresses electricity generated by eligible biomass systems up to 25 megawatts (MW), and methane gas, provided the generator began operation before January 1, 2006. Beginning in 2017, methane gas sources which began operation prior to 2006 and exceed a gross nameplate capacity of 10 MW at any single landfill site will not be eligible.

Class IV - Existing Small Hydroelectric. This class addresses electricity generated by hydro facilities up to 5 MW, provided the generator began operation before January 1, 2006, and complies with certain environmental protection criteria; and hydroelectric facilities up to 1 MW that comply with FERC fish-passage requirements and are interconnected to the distribution grid in New Hampshire.

Electric providers must meet the standard according to the following compliance schedule:

The Class I Thermal requirement is a subset of Class I, and is not additional to Class I requirements.

Generators must be sited within the New England control area, unless the source is located in a control area adjacent to the New England control area and the energy produced by the source is actually delivered into the New England control area for consumption by New England customers. The PUC may accelerate or delay by up to one year any given year’s incremental increase in Class I or II RPS requirement for good cause, and it may modify the Class III and IV requirements for calendar years beginning in 2012.

Compliance

The New Hampshire Public Utilities Commission (PUC) has established a REC program utilizing the regional generation information system (GIS) of energy certificates administered by ISO-New England and the New England Power Pool (NEPOOL). RECs from customer-sited sources are generally assigned to the system owner, and behind-the-meter generation located in New Hampshire is eligible to participate in the RPS. 

However, S.B. 218 enacted in 2012 essentially allows utilities credit towards the RPS for energy production by net-metered Class I and Class II resources that have not been certified and registered for the production of RECs. As a result of this law, the PUC must annually calculate the amount of energy produced by such systems based on the total installed capacity and a 20% capacity factor. It must then translate this energy production into a percentage by dividing it by the total amount of retail sales of electricity that are covered by the standard. Obligated suppliers may then claim a credit against their Class I and Class II RPS obligations based on this percentage. In 2013, the Class I credit percentage was 0.0063% (compared to an overall obligation of 3.8% Class I resources), while the Class II credit percentage was 0.0914% (compared to an overall obligation of 0.2% Class II resources).

Unused RECs from the prior two years may be used to meet up to 30% of a given year's compliance targets. Electric utilities may request to enter into multi-year contracts for RECs or electricity bundled with RECs to meet the RPS. Rural electric cooperatives may enter into multi-year contracts without PUC approval.

Alternative Compliance Payments

Compliance reports are due to the PUC by July 1 of each year from each electricity provider. In lieu of meeting the portfolio requirements, an electricity provider may make payments into a renewable energy fund. Class II moneys will only be used to support solar energy in New Hampshire. The rates for each megawatt-hour (MWh) not met for a given class obligation through the acquisition of RECs are:

• Class I: $56.54/MWh in 2018
• Class I Thermal: $25.69/MWh in 2018
• Class II: $56.54/MWh in 2018
• Class III: $55.00/MWh in 2018
• Class IV: $28.00/MWh in 2018

The PUC adjusts these rates annually by January 31 using the federal Consumer Price Index. The PUC is authorized to fine a supplier that violates RPS requirements, revoke its registration, or prevent it from doing business in the state. 

The PUC must conduct a review of the RPS program and report of its findings to the legislature in 2011, 2018 and 2025, and include any recommendations for changes to the class requirements or other aspects of the RPS.

Study

S.B. 51, enacted in June 2017, establishes a committee to study subsidies for energy projects provided by the RPS. The committee will reports its findings and recommendations for proposed legislation by November 1, 2017.