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Penacook trash incinerator to also receive rate subsidy after Sununu veto override

New Hampshire Union Leader

October 09. 2018 8:59AM
Unitil customers will pay an estimated $1.6 million a year over market rates to keep the Wheelabrator Concord plant operating, according to a Unitil official. (COURTESY)

CONCORD — When protesters gathered by the hundreds on the State House lawn a month ago in support of renewable energy legislation that had been vetoed by Gov. Chris Sununu, there were plenty of signs proclaiming “Wood is good.”

Supporters of the six biomass (wood-burning) power plants in the state made their case forcefully. But there were no signs or speeches promoting garbage as a good source of renewable energy.

Amid the clamor to save the state’s six wood-burning power plants, there was little if any attention paid to the fact that a massive trash-to-energy power plant in the Concord village of Penacook would also benefit when lawmakers voted on Sept. 13 to override the veto and force SB 365 into law over Sununu’s objection.

“I was surprised that it got put in there; it was just kind of lumped in,” says Sununu of the seven-story incinerator that since the 1980s has taken trash from Franklin, Laconia and many other New Hampshire cities and towns.

Several lawmakers who supported SB 365 in the belief that it would help sustain the state’s forest industry and the communities that rely on it had little or no idea that they were also voting millions of dollars in ratepayer subsidies for a trash incinerator.

Efforts to reverse that decision are already under way. Rep. Peter Schmidt, D-Dover, has submitted a request for House lawyers to draft a bill for the 2019 session that would exclude trash-to-energy facilities like the one in Concord from the state’s definition of renewable energy power plants.

History of subsidy

The plant in Concord has benefitted from a power purchase agreement with Eversource since the plant began operations in 1989. That 30-year pact expires next year and the incinerator’s owners warned that it could not survive on the price it would get for its power in the wholesale market.

“There was an effort by Wheelabrator to have the same treatment for that facility as the biomass facilities, and we went along,” said state Sen. Jeb Bradley, a leading proponent of SB 365.

The company that operates the plant was just sold for the second time in the past four years.

Energy Capital Partners has agreed to sell Wheelabrator Technologies to Macquarie Infrastructure Partners, a worldwide investment firm, for an undisclosed price. Energy Capital Partners bought Wheelabrator four years ago from Waste Management for a reported $1.9 billion.

Bradley says lawmakers were swayed by several arguments to include the plant in the legislation, including the fact that 19 cities and towns around Concord would have to find another way to dispose of their trash if Wheelabrator Concord shut down.

“It is renewable energy and they are meeting all the requirements of their air emission permits,” said Bradley. He also cited a concern about the loss of jobs should the facility close, and the fact that the plant is the only facility in the state licensed to dispose of unused opioid prescriptions.

“We looked at all that and thought they should be included,” he said.

As a result, Unitil will soon have to buy energy from the trash-to-energy power plant at rates substantially higher than it would have to pay on the wholesale energy market because the Wheelabrator plant is in the Unitil franchise area.

A $5 million subsidy

Unitil customers will pay an estimated $1.6 million a year over market rates to keep the Wheelabrator plant operating, according to Carol Valianti, vice president for communications and public affairs at Unitil.

Over the next three years, subject to renewal, that adds up to a $5 million subsidy paid for by Unitil customers. Unitil serves about 11 percent of the retail electricity customers in the state, primarily in the Concord area and Seacoast region.

The plant also makes money by charging so-called “tipping fees” to the cities and towns that bring trash there. Tipping fees for the city of Franklin will be going up from $67.79 a ton to $68.90 next year, according to City Manager Judie Milner

Franklin was among the municipalities lobbying in support of adding Wheelabrator to the biomass bill.

“We have looked at trash in several different ways, and this is the least expensive option for us,” she said. “It’s right down the street and doesn’t take a lot of time for us to deliver it.”

Environmentalists cite the health hazards associated with smoke and ash emitted by trash burning. They also point out that a similar Wheelabrator incinerator in Claremont closed down in 2013 and communities found alternatives.

John Tuthill, an Acworth selectman at the time, says there is a competitive market for municipal trash contracts.

“We heard the same arguments when the Claremont incinerator closed, that we’d be plagued with rats in the streets,” he said. “I recall as a selectman our phones were ringing off the hook from companies that wanted to take our trash at lower costs.”

Candidate perspectives

Sununu’s Democratic opponent in the gubernatorial race, former state Sen. Molly Kelly, supported the subsidy for wood-burning power plants that Sununu vetoed, but was less enthusiastic about the fact that the Wheelabrator plant piggy-backed on the bill.

“What I support is renewable energy and the biomass energy in the North Country that has really supported jobs in the timber industry,” she said. “But on the incinerator, we need to work to make sure that is clean and continue to work with the utilities on that issue.”

Sununu continues to oppose subsidies for both wood-burning and trash-burning power plants that can’t survive with the price they’d get for their energy on the open market.

“These bills are bad for ratepayers. I’m going to keep fighting for lower rates,” he said. “At the end of the day our priority has to be about the individuals.”

Donald Kreis, the attorney appointed by the state to represent New Hampshire consumers in utility issues, agrees.

“There are lots of good and virtuous public policy objectives out there, and one of them might be keeping the forest products industry in business; another one might be continuing to have viable options for municipal solid waste,” he said, “but paying for them in electric rates is basically telling electric payers they have to be responsible for broader public policy objectives, and if your concern is solely the ratepayer, then you have to take issue with this.”

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