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July 5th, 2012

New Hampshire Adds Thermal to Renewable Portfolio Standard

by Andrew Price, President & COO

Renewable Portfolio Standards (RPS) are common across the US. In 29 states and Washington DC, there are minimum requirements on the percentage of electrical generation that must come from renewable resources. To-date, these standards have focused on the sources for the generation of electricity.

On June 25th, New Hampshire became the first state to fully integrate renewable thermal energy into its RPS program. The law defines “Useful Thermal Energy” as “renewable energy delivered from class I sources that can be metered and that is delivered in New Hampshire to an end user in the form of direct heat, steam, hot water, or other thermal form that is used for heating, cooling, humidity control, process use, or other valid thermal end use energy requirements and for which fuel or electricity would otherwise be consumed.” In general, thermal sources must come online after January 1, 2013 to be eligible for Class I status.

The new law does not expand New Hampshire’s overall renewable energy content requirement. Instead, it adds thermal sources (solar thermal, biomass, biomass co-fired with fossil fuels, geothermal) to the list of eligible technologies that qualify to meet the existing minimum requirements.

In 2012, 3% of all electricity delivered in NH had to be from “Class I” new renewable resources that began operation after January 1st, 2006. In 2013, 2014 and 2015 the Class I requirement had been scheduled to increase to 4%, 5% and 6% respectively. This Class I requirement increased according to a set schedule until it topped out at 16% in 2025. The new law reduces the Class I requirement slightly from 16% to 15% in 2025 by slowing the rate of growth from 1% to 0.9% per year starting in 2016. The new law also establishes a thermal carve-out such that 0.2% of the published Class 1 requirement must be from thermal sources in 2013, 0.4% in 2014, increasing annually by 0.2% per year from through 2025.  

Producers of Useful Thermal Energy who take the necessary steps to meter and qualify their production, will receive Class I (thermal) renewable energy credits (TRECs) that can be sold to competitive energy providers that are obligated to satisfy the NH RPS. An alternative compliance payment has been established at $25/MWh in 2013 - with thermal energy converted to MWhs using 3,412 BTUs per kWh - effectively establishing a ceiling on the price of TRECs. 

The New Hampshire Public Utilities Commission must still pass rules to implement the new law (SB 0218) which makes a number of other significant changes to New Hampshire’s RPS. The new rules will take effect January 1st, 2013.

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