Renewable Portfolio Standard
New Hampshire's Electric Renewable Portfolio Standard (“RPS”) statute, RSA 362-F, established the renewable energy policy for the State.
The RPS statute requires each electricity provider, including utilities and Community Power programs, to meet a certain percentage of customer load by purchasing, generating or otherwise acquiring Renewable Energy Certificates (“RECs”):
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One REC represents the renewable attributes of one megawatt-hour of electricity, or the equivalent amount of thermal energy.
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RECs are generated by certified renewable energy facilities for power that is physically delivered into the New England wholesale electricity market operated by ISO-NE (which means the power can come from within New England, New York or eastern Canada).
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The New England Power Pool Generation Information System (NEPOOL GIS) issues and tracks RECs for the region.
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RECs are generally used for compliance in the same year as the renewable power was generated, though suppliers may “bank” RECs for up to two years to meet up to 30% of compliance requirements.
Classes of Renewable Obligations
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There are four distinct “classes” of renewable certificates under the RPS, each distinguishing between different technologies and dependent upon the year that the generators came online:
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Class I is divided between thermal and non-thermal renewables:
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Class I non-thermal electricity, from generators that came online after January 1, 2006: wind, solar, small hydroelectric, methane, biomass, hydrogen (from methane or biomass), ocean thermal, current, tidal or wave energy and also biodiesel (if produced in New Hampshire).
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Class I thermal energy, from generators that came online after January 1, 2013 (and are producing thermal energy, rather than electricity): geothermal, solar thermal, biomass and methane.
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Class II: solar generation that came online after January 1, 2006
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Class III: biomass & methane that came online before January 1, 2006
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Class IV: small hydroelectric that came online before January 1, 2006
Note the following flexibilities in meeting Class I requirements:
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Class I non-thermal requirements may be met with Class I thermal biomass and methane resources;
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Class I requirements may also be met with Class III (biomass & methane, thermal and non-thermal) or Class IV (small hydroelectric, non-thermal) resources that have been restored through significant investment or have otherwise begun generating in excess of historic baselines; and
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Solar that came online after January 1, 2006 may be used to satisfy Class II or Class I requirements.
Annual Renewable Procurement Obligations
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Community Power programs must obtain RECs for each of the four classes of renewables as a set percentage of their retail electric load, which increase on an annual basis (until plateauing after 2025, unless the RPS is raised in future):
Renewable Credits from Net Energy Metering Customers
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Additionally, net metered customers (primarily customers with solar photovoltaics) may register with NEPOOL and meet certain administrative requirements to track and sell their RECs. Not all customers do, however, and the REC production from such customer generators are estimated by the Public Utilities Commission each year and applied to lower the Class I and Class II procurement requirements of the utilities and other suppliers.
Alternative Compliance Payments
If the electricity providers are not able to meet the RPS requirements by purchasing or acquiring RECs, they must pay alternative compliance payments (ACPs). The funds are used for a variety of renewable programs in New Hampshire.
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The result is that these alternative compliance payment prices essentially act as a price ceiling for the REC market in New Hampshire. The ACPs for RECs by class in recent years are:
For example, Eversource, Unitil and the New Hampshire Electric Cooperative have recently made alternative compliance payments instead of purchasing certain categories of RECs:
