All Sections

Home | State Government

Sununu faces tough choice on renewable energy bills

State House Bureau

May 21. 2018 9:34PM
The Burgess BioPower plant in Berlin. (JOHN KOZIOL/CORRESPONDENT FILE)

CONCORD — It’s decision time for Gov. Chris Sununu, who faces a slew of recently passed bills that he must veto, sign into law or allow to become law without his signature. High on that list are three bills that involve ratepayer subsidies for renewable energy supply.

If he signs them, critics of the legislation, like the Business and Industry Association and the free market Josiah Bartlett Center, will accuse him of going against his own energy policy, just released last month.

If he vetoes them, the howls of protest from the forest industry and the people it employs will be heard from Pittsburg to Portsmouth.

Senate Bill 365 would require Eversource and other distribution utilities to pay above-market rates to the state’s six biomass (wood-burning) power plants, the cost of which is passed along to consumers in their electric bills.

Senate Bill 446 would expand the state’s net metering program, which forces utilities to buy electricity from qualifying renewable generators at above-wholesale rates.

Senate Bill 577 would extend an agreement through which Eversource buys power from the Burgess Biopower plant in Berlin at above-market rates.

Defenders of the three bills maintain they are sound energy and economic policy, ensuring that the renewable energy sector survives amid low natural gas prices.

The wood-burning plants also provide fuel diversity and a hedge against future spikes in natural gas prices, while sustaining vital sectors of the economy like forestry.

But critics see them as nothing more than government subsidies for power plants that can’t compete in the free market, supported by ratepayers already paying some of the highest rates in the country.

Top priority in plan

The state’s new 10-Year Energy Strategy, released by the Office of Strategic Initiatives in April, acknowledges the state’s high electricity costs and makes lowering them a top priority.

In a section dedicated to renewables, the policy warns against subsidies that raise rates without commensurate economic benefit.

“While there is no doubt that biomass plants drive economic activity in New Hampshire, protectionist policies always have reciprocal costs,” the policy states. “Mandates to preserve biomass generation impose higher energy costs on ratepayers, and are not a sustainable mechanism to achieve cost-competitive and economically viable energy resources in New Hampshire.”

Despite the stated low regard for biomass subsidies in his own energy policy, Sununu was quick to point out that he does not support eliminating such subsidies.

“To be clear, my energy policy does not call for an end to such subsidies,” he said. “What my energy policy does is say any time we look at any of this stuff you have to do it through the lens of the ratepayer first … It doesn’t say we’ll sign any bill that has a subsidy or veto any bill that has a subsidy. It just says we are going to look at it through the lens of the ratepayer first.”

So will he veto or sign the three bills? “We’ll do an assessment on each one,” he said. “I don’t want to weigh in on them as a whole.”

The 10-Year Energy Strategy can be viewed below:

Manufacturing affected

Groups like the Josiah Bartlett center don’t understand how Sununu could sign the bills, given the spirit, if not the letter, of the energy policy.

“A veto of these bills would be consistent with the state’s energy plan and with the governor’s goal of fighting increases in New Hampshire electricity rates. Letting the bills become law would undermine the plan and encourage legislators to ignore it going forward,” according to a statement the free market think tank issued last week.

“The stated goal of these bills is to preserve several hundred jobs in the forest products industry. Yet by pushing electricity rates ever further upward, these bills jeopardize tens of thousands of jobs in other industries, particularly in manufacturing, which employs 70,000 people in the Granite State.”

The Business and Industry Association, in a similar statement, reminded Sununu of what the energy policy says, and urged him to veto SB 365:

“While the intent of SB 365 to subsidize 900 jobs in the timber and wood products industry is laudable, we cannot support public policy which further burdens other ratepayers, particularly manufacturers which employ 69,000 people and drive New Hampshire’s economy,” according to a letter the BIA sent the governor last week.

Costly investments

Donna Gamache, director of government relations at Eversource, says renewable power plants, mostly biomass, have received nearly $2 billion in subsidies from ratepayers since the 1980s. The pending legislation, according to Gamache, could raise rates by a collective $20 million to $25 million a year.

It’s an investment worth making, according to Rep. Herbert Richardson, R-Lancaster, who spoke in support of SB 365 when it passed the House, 225-108, on May 3.

“The bill is aligned to other bills this year that seek to incentivize and help our homegrown renewable energy generators in this state that are having a difficult time operating in the current energy market. If we let these plants fail, not only do we lose all the local jobs, forestry benefits, municipal benefits, environmental benefits and economic activity, but we will in fact increase our electricity prices, according to Richardson.

Greg Moore, state director with Americans for Prosperity, testified against SB 365, and told the House Science, Energy and Technology Committee, which endorsed all three bills, “The committee must decide what side represents the best for the most people.”

That calculation is now up to Sununu.

Politics Technology Energy

More Headlines