Biomass plants in Bethlehem and Tamworth are winding down operations — at least temporarily — after the governor vetoed a bill that would have provided financial subsidies, a company spokeswoman said.
Gov. Chris Sununu’s office said that veto will save electric customers $30 millions a year.
Wood chip suppliers serving the biomass industry say the veto will send ripples through the economy.
“The trickle-down effect is just going to be massive,” said Rebecca Crowe, co-owner of Timberwolf Logging in Littleton. “We buy our fuel locally; guys stopping at the local gas station buying lunch.”
Senate Bill 365 would have required Eversource and other distribution utilities to pay above-market rates to the state’s six biomass (wood-burning) power plants. That cost would have been passed on to customers in their electric bills.
Carol Churchill, spokeswoman for the plants’ owner, Engie North America, said the plants will continue to run until they use up stockpiles of wood chips, then they will shut down. The plants would be fire up again if market conditions improve.
As of Tuesday, Bethlehem had six days of wood chips on hand and Tamworth had a three-week supply, Churchill said.
“We will evaluate the long-term outlook for the facilities in September,” she said.
Churchill said the plants have been “operating at a loss for some time” and the subsidy would have offered relief.
“However, given the outlook for power prices, it is unlikely that the plants will operate for the rest of the summer,” she said.
A notice Engie sent to wood suppliers said the Bethlehem and Tamworth plants would stop accepting wood deliveries effective June 22 and would begin operating in “reserve shut-down status” once most wood on site had been used.
Gov. Chris Sununu vetoed the bill June 19 after having been warned of possible shutdowns.
Churchill is hopeful the plants could operate again.
“Reserve shutdown status means that the plants will run if it is economically viable for them to do so” or if ISO New England, operator of the regional power grid, needs them, Churchill said.
She said situation “is the result of ongoing severely depressed wholesale energy prices and [renewable energy credit] prices, meaning the plants were continuing to operate at a loss for some time.”
All 40 employees — 20 at each facility — will remain employed for now.
On the day the governor vetoed the measure, Senate Majority Leader Jeb Bradley, a main sponsor of the biomass bill, said that as many as 900 jobs relying on the biomass industry could be in jeopardy.
Don Kreis, the state’s consumer advocate, said another biomass unit suspended operations in Alexandria earlier this year.
“It’s not shocking to see other ones to do the same thing,” Kreis said. “There’ll be a veto override attempt. The game isn’t over yet by any means.”
Marc Brown, president of the New England Ratepayers Association in Concord, said Tuesday that “a few bucks a month to low-income people really matters” in higher electric rates.
“Trading jobs that don’t need a subsidy for those that require massive subsidies, while adding grinding costs on the backs of the poor is terrible public policy,” said Greg Moore, state director of Americans for Prosperity — New Hampshire.
The governor’s office said the veto helps the state’s most vulnerable ratepayers.
“Last week’s veto did not take anything away from the biomass industry,” they said. “It simply didn’t give them an additional $30 million a year in additional subsidies.”
For Crowe, selling wood chips to the Bethlehem plant represented 20 to 30 percent of his company’s revenue. It will look for other outlets to sell its lumber, but selling its product to a plant a mile away saved on fuel costs, she said.
The company hopes to retain its 16 workers.
Crowe isn’t shocked plants are closing because of the veto.
“We’re surprised it happened so quickly,” she said.