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Overview of Energy Policy Act of 2005

Overview of Energy Policy Act of 2005. A Review of Implementation issues in New Hampshire. Basic Federal/State Concepts:. Constitutionality Enumerated Powers (Article 1, Section 8 – “Commerce Clause”) Savings Clause (10 th Amendment) Jurisdiction Pre-emption.

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Overview of Energy Policy Act of 2005

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  1. Overview of Energy Policy Act of 2005 A Review of Implementation issues in New Hampshire

  2. Basic Federal/State Concepts: • Constitutionality • Enumerated Powers (Article 1, Section 8 – “Commerce Clause”) • Savings Clause (10th Amendment) • Jurisdiction • Pre-emption

  3. Energy Policy Act of 2005 – Overview • Repeal of the Public Utility Holding Company Act of 1935 (“PUHCA”) • Tax incentives for new generation • Repealed the utility ownership prohibition of PURPA • Streamlined the application process for new liquefied natural gas ("LNG") facilities • Incentives for nuclear generation advanced design • Allowed FERC to imposemandatory reliability standards for transmission

  4. Sections 1251, 1252 and 1254 of EPAct • Required state commissions to consider five new federal (PURPA) standards and make specific determinations as to whether implementation of the standards is appropriate. • Net Metering • Fuel Sources • Fossil Fuel Generation Efficiency • Time-Based Metering and Communications or “Smart Metering,” and • Interconnection.

  5. Time Based Metering • Whether it is appropriate for electric utilities “to provide and install time-based meters and communications devices for each of their customers which enable such customers to participate in time-based pricing rate schedules and other demand response programs.”

  6. Historically, retail pricing is based upon an average price • No incentive to use electricity based on the economic cost to provide it • Customers of National Grid and Unitil pay “hedge premium”

  7. NHPUC Docket DE 06-061Procedural Overview • Commission issued its Notice April 24, 2006 • Technical sessions, comments and discovery follow • Commission Order issued June 22, 2007 • PSNH Motion for Rehearing July 23, 2007 • Rehearing held October 10, 2007 • Final Order Pending

  8. Commission 4/24/2007 Order • “We find that time-based pricing that enables demand response can be a cost-effective alternative to adding new generation, adding to transmission and/or distribution capacity, or increasing electricity usage, provided that consumers reduce or shift their usage in response to changes in retail prices.”

  9. Order, con’t: • On this basis, required: • a. All utilities to modify their tariffs to provide for fixed, time-based pricing of default service for all metered classes • b. At some point in the near future will require real time pricing

  10. PSNH Motion for Rehearing • Challenges failure of Commission to hold a hearing • Failure to abide by New Hampshire Rulemaking requirements • Commission grants rehearing, held on October 10, 2007

  11. Issues for Consideration • Mandatory (?) • What price differential is sufficient to cause a shift in usage • Picking winners and losers • Large vs. Small Customer concerns • What are we trying to accomplish • Other alternatives • Decoupling

  12. Suggested Readings • See Handout

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