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NH's high utility bills blamed on subsidies

New Hampshire Union Leader

November 13. 2017 10:44PM

A 32-page report says the state's high electricity prices can be attributed in large part to the cost of subsidies for renewable energy. 

New Hampshire’s high electricity prices can be attributed in large part to the cost of subsidies for renewable energy, according to a 32-page analysis by Strata Policy Research, commissioned by the Americans for Prosperity Foundation.

The analysis, presented to business leaders in Manchester on Monday, attempts to explain why New Hampshire has the fifth-highest residential electric rates in the country, and what policy-makers can do about it.

Key recommendations include reforms to the state’s renewable portfolio standards, energy regulations and subsidies, as well as the Regional Greenhouse Gas Initiative.

“The importance of these reforms cannot be understated,” according to Josh T. Smith, principal author and researcher, who presented his findings at the Manchester event. “Our report’s central finding is that electricity prices in New Hampshire are high in part because of the state’s current energy policy.”

That policy encourages the development of renewable energy through programs like Renewable Portfolio Standards, which require utilities to purchase a certain percentage of their power from renewable sources such as wind, solar or biomass.

The state participates in the Regional Greenhouse Gas Initiative (RGGI), which sets limits on carbon emissions by utilities, and also funds energy efficiency programs through a charge on ratepayer utility bills called the systems benefit charge.

Strata research recommends that such programs be eliminated, or that any money they generate be used for rate relief, not to subsidize renewable energy.

Clay Mitchell, a lecturer in University of New Hampshire’s Department of Natural Resources and the Environment, was among those in the audience for Monday’s presentation. “The discussion has become over-politicized, making it difficult for us to find a balanced solution,” he said. “I think (the study) overstates the rate impact of the programs and understates the benefit.”

Higher than average

The average retail price for residential customers in New Hampshire is 18.98 cents per kilowatt hour, based on the most recent data available from the U.S. Energy Information Administration, compared to a national average of 13.12 cents.

The high prices throughout New England have been attributed to a variety of factors, including the short supply of natural gas in the coldest months, high transmission costs, the high price of guaranteeing future generation from power plant owners, and programs that encourage renewable energy.

Power plant owners work into their pricing the cost of complying with government mandates designed to encourage renewables, so reducing or eliminating those mandates will help bring down costs, according to the Strata Policy study.

The Strata Policy study can be viewed below:

It claims that New Hampshire’s policy of subsidizing the development of wind, solar and biomass energy is costly to consumers and hurts the state’s economy. It also chides lawmakers for raiding funds created by such programs to balance the state budget, and criticizes opponents of energy development projects, claiming they often “overstate their case.”

The study calls for large-scale hydroelectric projects, like the Northern Pass, and nuclear plants, like Seabrook Station, to be considered renewable energy sources. “If the ultimate goal of the renewable portfolio legislation is to limit carbon emissions, then nuclear energy is an obvious option,” according to Smith.

Opposing subsidies

Both AFP-NH and Strata Policy Research are funded by conservative political activists David and Charles Koch, who have invested heavily in opposing subsidies for renewable energy across the country.

“Existing subsidies distort the energy market and are likely to be driven more by the lobbying power of the renewable energy industry than by the environmental benefits of renewable energy,” writes Smith.

The Strata Policy report comes just a week after the N.H. House Committee on Science, Technology and Energy took action that Republicans in Concord said was needed to lower electricity rates inflated by incentives for renewables.

In a series of party-line votes, three bills were recommended for passage. One that would cut the goal for renewables from 15 percent of energy consumed by 2025 to 6 percent. Another bill eliminates the ability of the Public Utilities Commission to adjust the Systems Benefit Charge used to fund energy efficiency programs; a third directs all state revenues from the Regional Greenhouse Gas Initiative to rate relief, zeroing out any funding for energy efficiency programs through RGGI.

The full House of Representatives will vote on those bills when the 2018 session begins in January.

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