New Hampshire HB315: Net Metering Expanded and Community Choice Aggregation Enhanced
After a long year of negotiations, compromise, and input from various stakeholders HB315 has been signed into law by Governor Sununu. HB315 is a big victory for advocates of net metering and community choice aggregation (CCA) as it enhances both existing programs dramatically.
On the net metering front, HB315 raises the net metering cap from 1MW to 5MW, however this increase is only applicable for municipal customers. For seven years now, the New Hampshire Legislature has worked to find a bipartisan solution to raising the net metering limits, and with HB315, that solution has finally arrived. While the 1MW cap is still in place for most electricity users, the increase to 5MW for municipal users is substantial and provides a successful program blueprint towards wider adoption in the coming years.
The net metering expansion is poised to benefit both renewable energy generators and municipal energy users alike. By pairing with a local renewable generator, New Hampshire municipalities can realize significant energy cost savings while supporting local renewable resources. The renewable generation facility does not have to be physically located on the municipality’s premises, and if the facility was built and in service prior to January 1, 2021, can be located anywhere within the applicable utility territory. Expanding the net metering limit to 5MW makes large scale renewable energy projects financially viable due to generous utility incentives. This will create a significant injection of renewable energy into New Hampshire’s utility infrastructure, increasing system resiliency and reducing carbon emissions.
Under HB315, receiving the net metering benefits of local renewable energy projects is financially risk free. In addition, it does not require behavioral changes from municipalities. When a municipality enrolls as a member in an eligible project, it allows the renewable asset to receive standard offer payment for the generated electricity offset by the municipality, providing a significant economic boost to these projects.
To incentivize participation, local generators are willing to share the financial benefits with their offtake group, helping reduce energy costs. Put simply, your city, town, or municipal organization continues to use electricity as it already does, and pending contract terms, receives an annual payment for your participation.
On the Community Choice Aggregation (CCA) front, HB315 cleared some previous obstacles not covered by SB286 in 2019. Most importantly, HB315 created a Purchase of Receivables Program, or POR as it is commonly known. POR is a program whereby the utility, not the third-party supplier, is responsible for collection of the monthly customer payments. States with robust CCA programs like MA, NY, and OH have adopted POR, leading to growth of supplier participation and lower CCA rates. Absent POR, suppliers serving communities through a CCA mechanism have no ability to check customer credit or decide which customers they will or won’t serve. It is a universal access program. As such, suppliers in non-POR markets assume significant credit risk which then manifests itself in higher CCA rates and lower supplier bid participation. It also means that communities with higher rate payer default rates are left under- or un-served. POR corrects this, by offering the CCA suppliers the same payment guarantees the utilities have. This will allow cities and towns who offer CCA programs to pass on the benefits of community scale net
metering to their residents.
“I am ecstatic that everyone’s hard work has culminated in the passage of this extremely important energy legislation,” stated Bart Fromuth, COO, Freedom Energy Logistics. “From the Governor’s office, the House and Senate energy committees, and Clean Energy NH, to the Cities of Lebanon and Nashua, and even the utilities, everyone played an important role in reaching compromise and making HB315 a reality. I’m delighted that Freedom Energy played a part in this initiative, and I cannot wait until New Hampshire realizes the benefits from this bipartisan effort.”
Please reach out to the Freedom Energy Logistics team to learn more about community choice aggregation, registering as a generator, participating as an off taker, and pairing with a renewable energy project.