Bill flips switch for solar, biomassBy DAVE SOLOMON
New Hampshire Union Leader
July 13. 2017 1:11AM
CONCORD — Despite aggressive opposition from business interests who warn the measure will increase already high electricity costs, Gov. Chris Sununu has allowed a bill to become law without his signature that promotes renewable energy sources.
SB 129 became the focal point in a legislative tug of war between businesses represented by the Business and Industry Association, which opposed the bill, and the N.H. Clean Tech Council and N.H. Sustainable Energy Association, which endorsed it.
The legislation will more than double the amount of solar energy that utilities have to purchase, raise the price of renewable energy certificates used to support biomass (wood-burning) power plants and remove the size limit on solar projects eligible for the residential solar rebate program.
The law is also designed to give low- to moderate-income households more access to the state’s renewable energy fund by requiring that at least 15 percent of the fund be used to finance solar projects for manufactured housing or apartment buildings in low- to moderate-income communities.
“This bill will help grow the solar industry in New Hampshire, which has generated over 1,200 jobs and is one of the fastest-growing industries in our state,” said Rep. Amelia Kean, D-Nashua. “These are good-paying jobs that help attract and retain a younger workforce, protect ratepayers, modernize our electric grid and decrease our dependency on fossil fuels.”
But the consequences, in the short term at least, will be to raise electricity prices for many consumers. When utilities are required by the state to purchase renewable energy at higher than market prices, they pass those costs along to consumers in the energy supply rate.
Kate Epsen, executive director of the Clean Tech Council and Sustainable Energy Association, predicted that the rate impact of the bill in the short term would be “very small.”
“It arguably helps control rates in the medium- and long-term by maintaining diversity (of energy sources) and adding new supply,” she said.
Jim Roche, president of the BIA, doesn’t agree. “It’s just extremely disappointing,” he said of the governor’s failure to veto the bill. “Business customers, particularly large energy users, need relief now. Many of our state officials say they are concerned about high energy costs, but actions speak louder than words.”
Tax cut to soften blow
Sununu had hoped to soften the impact of SB 129 on electricity prices in two ways — through repeal of the electricity consumption tax and passage of SB 128, which would have given electric utilities permission to purchase space on natural gas pipelines (thus encouraging their construction).
The electricity consumption tax was repealed as part of the state budget that was signed into law, but SB 128 was retained in the House after passing the Senate.
“So we are left with SB 129, which takes the state in the opposite direction that it needs to go with lower electricity costs, not higher,” said Roche.
The subsidies for the biomass industry are particularly important to the North Country, where wood products are key to the economy. Sununu alluded to that in explaining why he allowed SB 129 to become law without his signature as the deadline for his decision expired on Tuesday.
“It is important to balance a smart renewable energy portfolio and economic growth in New Hampshire’s North Country with potential costs to ratepayers,” Sununu said. “ Given that we were able to put the repeal of the electricity consumption tax in place to offset any potential costs to ratepayers, allowing this bill to become law makes sense.”
A veto could have been overridden. SB 129, sponsored in the Senate by Republican Jeb Bradley and Democrat Dan Feltes among others, enjoyed bipartisan support, passing in the Senate on a voice vote, and in the House, 222-84.
No offset expected
The BIA does not agree that repealing the electricity consumption tax, amounting to $0.00055 per kilowatt hour, will offset the impact of SB 129.
“While we appreciate efforts to counterbalance additional costs embedded in the bill through elimination of the electricity consumption tax, it is not enough,” Roche wrote in a letter hand-delivered to Sununu in mid-June.
“Based on utility industry estimates, under the best of circumstances it will take 15 years or more for ratepayers to break even on this arrangement. Worst case, ratepayers will never see savings, only additional costs.”
The most recent data from the Energy Information Administration, as of Jan. 1, shows New Hampshire’s retail rate for electricity at 16.02 cents per kwh, well above the national average of 10.41 cents.
That’s the fully loaded retail rate, with all costs included (energy supply, transmission, distribution, system benefits, stranded costs, etc.). The highest retail rates in the continental United States are in Massachusetts, Connecticut and Rhode Island, all in the 17-cent range.