Senate panel questions HB2 sweep of renewable energy fund, asks how lower REC targets affect revenues and programs

Jared Chicoine, commissioner of the New Hampshire Department of Energy, told the Senate Finance Committee that most of the department’s budget is from non‑general‑fund sources and that the Renewable Energy Fund (REF) is the target of language in the House version of HB 2 that would move uncommitted REF balance to the general fund.

"Approximately 75% of our budget comes from federal funds," Chicoine said, adding that about 70% of the department's budgeted appropriations are pass‑through grants. He and Deputy Commissioner Chris Elms described the HB 2 language (page 70, section 185) as allowing a sweep of uncommitted REF money, and Elms said the House’s change would “take all uncommitted money” rather than a set dollar amount.

Committee members raised two linked concerns: (1) how much uncommitted money is in the REF now, and (2) whether reductions in renewable energy credit (REC) compliance rates (the House amendment to HB 2 19) will cut receipts into the fund and create a shortfall if the House’s fiscal calculations assume a particular sweep amount. Elms said the governor’s original proposal listed a $10 million set sweep; the House language does not specify a fixed dollar figure and could therefore move all uncommitted funds.

Elms explained why REF balances built up: programs operate on a reimbursement basis and during the pandemic many projects were awarded funds but not yet completed, creating carryover. The department “made allocations in September of about $6,000,000 with another million or so in carryover funding” and currently runs open programs, he said. He also told the committee the REF has at times failed to spend all allocated funds because some open grant rounds did not attract enough or high‑quality applicants to responsibly award all money.

On the potential revenue effects of lowering thermal REC requirements, the Department said forecasting the alternative compliance payment (ACP) market is difficult: "a lot is dependent on what we have come in from those funds, you know, things like state policy, things like the availability of renewable credits in other states, even the weather," Elms told senators. He said Class 3 ACPs can vary year to year and that reductions in one class can raise activity in another.

Senators also pressed the department about the Low Income Home Energy Assistance Program (LIHEAP). Chicoine said LIHEAP grants typically range "anywhere from 25,000,000 up to maybe just under 35,000,000" annually and that carryover can blunt year‑to‑year shocks. He added that roughly "26,000 households" received fuel assistance this year and that a significant federal cut would have a notable impact; the department would look to the governor and legislature to decide state mitigation if federal funds were lost.

Why it matters: HB 2’s budget language and related statutory changes would reshape how REF dollars flow in fiscal 2026–27 and limit the department’s ability to allocate new incentive funds while leaving staffing and existing allocations intact, according to department officials. Committee members asked the department to work with legislative staff to better quantify a likely sweep number and the interplay between REC compliance rates and ACP revenue.

Committee context and next steps: Elms and Chicoine told the committee the department could help refine forecasts if the committee wants to keep a sweep in the budget and requested direction on whether to treat the House language as final or to craft a more precise figure. Senators suggested the committee ask the department and LBA for an updated projection of uncommitted REF balances and of expected ACP receipts under the revised REC percentages before finalizing votes on HB 2.