News & Thought Leadership from Sulloway & Hollis

The NH Department of Energy

As of July 1, 2021, New Hampshire has a new executive department. With the stated goal to “improve the administration of state government by providing unified direction of policies, programs, and personnel in the field of energy and utilities,” the New Hampshire Department of Energy reorganizes and consolidates the state’s energy and utility regulation under one entity. RSA 12-P:2. The creation of the Department marks a significant shift in oversight, regulation and administration of these areas, with the Department holding administrative responsibilities formerly held by the Public Utilities Commission (“PUC”), Site Evaluation Committee, and the Office of Strategic Initiatives.

Legislative Background

While there has been discussion within the Statehouse for years about creating a Department of Energy, the newly-formed Department came as somewhat of a surprise to many observers. Rather than being introduced as a traditional, stand-alone bill, the Department was included as part of a budget trailer, House Bill 2. Following failed legislative efforts to remove the Department from the biennium budget, the budget was approved and signed by Governor Sununu on June 25, 2021, creating the Department effective July 1st.

Proponents in favor of the new Department argued that it would allow for greater efficiency by consolidating the state’s energy and utility oversight and regulation under one umbrella. Likewise, advocates argued the Department would allow for increased transparency and accountability by formalizing energy and utility processes.

Opponents, on the other hand, argued less about the substance of the reforms, but more so on the style. Specifically, a number of lawmakers criticized the decision to include the proposal in a trailer bill – over 200 pages long – rather than introducing it as a stand-alone proposal which would have allowed stakeholder input and comment. Criticisms were also raised as to the independence of the PUC, as a number of the PUC’s administrative functions were moved to the new Department.

Authority and Scope of the Department

The approval of House Bill 2 marks a sweeping shift for energy and utility oversight, regulation and administration in New Hampshire. As a preliminary point, the bill creates the Department of Energy, codified as RSA 12-P. The Department’s stated goal is to “improve the administration” of state energy and utility policy and regulation, requiring the Department to “Provide all necessary administrative, technical, and staff support to the [PUC] to assist the commission in carrying out its regulatory and adjudicative functions.” RSA 12-P, III. The legislation also amends a number of other statutes related to energy and utility oversight and regulation, including RSA 363 (regarding the PUC) and RSA 162-H (regarding energy facility evaluation). Duties previously held by the Office of Strategic Initiatives have also been assigned to the Department.

Accordingly, this legislation merges energy and utility regulation under the umbrella of one entity. Other entities with related responsibilities are now administratively attached to the Department, including the Office of the Consumer Advocate, the entity charged with representing the public’s interest in PUC proceedings (which was previously affiliated with the PUC), as well as the Site Evaluation Committee, responsible for siting and construction of energy facilities. See, RSA 363:28, I; RSA 162-H:3.

Significantly, the PUC’s authority and role has been significantly altered. Now an “independent agency administratively attached to the department of energy pursuant to RSA 21-G:10,” the chairman of the PUC is limited to the “the powers and duties set forth in RSA 21-G:9.” See, RSA 363:1. A number of the duties previously held by the PUC have been reassigned to the Department. For example, the new statute provides “all of the functions, powers, duties, records, personnel, and property of the public utilities commission incorporated in the statutes establishing the department of energy and which replace the authority of the commission with the authority of the department of energy, are hereby transferred, as of July 1, 2021, to the department of energy.” RSA 12-P:11. That said, “existing rules, orders, and approvals of the public utilities commission which are associated with any functions, powers, and duties, transferred to the department of energy pursuant to RSA 12-P:11 or any other statutory provision, shall continue in effect and be enforced by the commissioner of the department of energy until they expire or are repealed or amended in accordance with applicable law.” RSA 12-P:14.

Complaints against public utilities will now be routed to the Department rather the PUC. While the PUC retains the power to hold hearings, the Department “shall have the authority to investigate any matter that may come before the public utilities commission and to appear before the commission to advocate for the department’s position and for the purposes of providing a complete record for consideration by the commission.” RSA 12-P, IV. Following investigation, the Department is empowered to “bring proceedings on its own motion before the [PUC], with respect to any complaint or violation of any provision of law, rule, terms and conditions of its franchises or charter, or any order of the commission.” RSA 365:4.

A number of other changes under House Bill 2 relate to the reorganization of the state’s oversight of the energy and utility sectors. By way of example, the representative of the PUC who used to sit on the State Building Code Review Board has now been replaced with a represented of the Department. See, RSA 155-A:10, I(k). The legislation also provides for shared powers, too. For example, utilities will now need to report to both the PUC and the Department prior to making any “addition, extension, or capital improvement to its fixed property” in New Hampshire, whereas they formerly only reported to the PUC. RSA 374:5. Further, both the Department and the PUC “may require any public utility or entity subject to its jurisdiction to make specific answers to questions upon which the department or [PUC] may need information.” RSA 12-P:10. The Department has the power to promulgate administrative rules, though none have been issued to date.

Composition of Department.

The Department’s leadership structure is laid out in RSA 12-P:4. In brief, the Department is led by the commissioner of energy, who is nominated by the Governor and confirmed by the Executive Council for a four-year term. The commissioner has the obligation to nominate a deputy commission; he also serves a four-year term, subject to appointment by the Governor and Council.

In addition, the legislation creates a number of subdivisions within the Department, including the following:

• Division of administration (RSA 12-P:6)
• Division of policy and programs (RSA 12-P:7)
• Office of offshore wind industry dev. (RSA 12-P:7-b)
• Division of enforcement (RSA 12-P:8)
• Division of regulatory support (RSA 21-P:9)

In addition, an office of planning and development was created within the department of business and economic affairs, with the goal of planning for the orderly development of the state’s resources (RSA 12-O:53-60; see also, RSA 9-A:2).

Likewise, the commissioner nominates division directors, who are similarly confirmed by the Governor and Council. The division directors serve the following terms: administration (initial term of two years, with subsequent terms of four years); policy and programs (initial one year term, with subsequent terms of four years); enforcement (initial term of three years, with subsequent terms of four years); regulatory support (initial term of three years, with subsequent terms of four years).

As above, given that the administrative components of the PUC have been transferred to the Department, much of the staffing now falls under the Department, too. That said, House Bill 2 provides for six “senior adviser” staffers for the PUC, who are qualified in “engineering, economics, accounting, finance, or law.”

Conclusion.

As the Department gets up and running in the coming months – with additional officials appointed to key posts and administrative rules promulgated and finalized – the impact the Department will have on energy and utility regulation will become clear – from clean energy initiatives and regulatory investigations, to long-term planning and wind power. Suffice it to say, the creation of the Department of Energy marks a significant change in the regulation and administration of energy and utility issues by the state government. Practitioners and stakeholders should pay careful attention to the language of RSA 12-P, as well as all of the changes brought about by House Bill 2.

The attorneys at Sulloway & Hollis are here to assist if you have questions regarding these changes. To discuss, please call us at (603) 223-2800 or send an email to Info@sulloway.com.