NH energy strategy shifts from subsidizing renewables to lowering ratesBy DAVE SOLOMON
State House Bureau
April 17. 2018 9:44AM
CONCORD — The first update to the state’s 10-year energy strategy since 2014 takes a new tack, with a focus on lowering electricity rates and less emphasis on subsidizing renewable energy or mass transit.
The 62-page document to be released today by the Office of Strategic Initiatives raises questions about the state’s renewable portfolio standards, which require utilities to purchase a certain amount of energy from renewable sources at above-market prices.
It also challenges lawmakers to consider carefully the costs versus benefits of subsidizing operations such as the Berlin biomass power plant, which contributes to economic development in the North Country while raising electricity costs for everyone.
Supporters of commuter rail will find little to cheer about in the strategy, while opponents of energy projects like the Kinder Morgan natural gas pipeline or the Northern Pass hydroelectric project are warned that New Hampshire has to become more realistic about energy project siting.
The new strategy marks a major change in direction from the document developed in 2014 by what was then called the Office of Energy and Planning under Democratic Gov. Maggie Hassan.
While the 2014 strategy called on lawmakers to “strengthen and stabilize” the Renewable Portfolio Standards, the new policy calls them into question.
The new strategy also takes a very different view of mass transit options, such as commuter rail. According to the 2014 document, “the state should continue supporting efforts to bring additional rail to New Hampshire.”
The policy unveiled today takes a decidedly different approach: “It is unlikely that large public transit infrastructure projects will deliver energy efficient transportation for New Hampshire travelers,” the new strategy states.
“Instead of new, capital-intensive, publicly-funded infrastructure, such as extensive commuter rail systems, enabling personal vehicle options combined with on-demand fleets (like Uber) can deliver high-utilization travel. Transportation energy efficiency is more likely to be achieved with full car seats, not train cars.”
Support for Seabrook
The new strategy also suggests that New Hampshire will support extending the operating license for the Seabrook Station nuclear power plant, currently set to expire in 2030. The power plant owner, Nextera Energy, is seeking an extension to 2050.
“Preserving Seabrook Station as a source of zero-carbon energy is the most realistic and cost-effective means of managing emissions in New Hampshire,” the strategy states.
It also calls on the state to redefine its renewable energy portfolio to include nuclear power or large-scale hydro from Quebec, arguing, “If reducing emissions is a primary objective, then the RPS should be redefined to include other zero- or low-carbon resources.”
In the section dedicated to siting energy projects, the strategy notes that the siting process “often highlights tensions between individual or small community interests and collective interests.”
“Responding to these issues is difficult and requires balancing numerous interests, but does not remove the necessity of siting appropriate energy infrastructure to meet New Hampshire needs.”
The underlying theme of the document is that addressing high energy costs is critical for New Hampshire, and that the primary goal of the state’s energy policies should be cost reduction based primarily on free market forces, not government intervention.
Setting the stage
Gov. Chris Sununu said the new plan sets the stage for New Hampshire to “get out of the business of picking winners and losers in the energy market.”
“Electricity touches every aspect of the economy, and New Hampshire’s costs are among the highest in the region,” he said. “Our 10-year strategy provides direction and leadership to our state’s policymakers that is squarely aimed at helping our ratepayers. I urge legislators to use the plan as a resource so we can lower rates, we can secure our electric system and we can take practical steps to protect our environment.”
The state Senate just passed two bills that run contrary to the strategy. House Bill 365 would require utilities to purchase power from the state’s biomass plants as well as small hydroelectric facilities and waste-to-energy incinerators at above-market prices.
In addition, HB 577 would require that the Public Utilities Commission re-examine Eversource’s current contract with the Burgess BioPower plant in Berlin to see if it can be extended.
“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,” the strategy states.
The new direction
Three bills up for hearings today before the Senate Energy Committee are more consistent with the direction of the new strategy.
One would require utilities to display the cost of renewable portfolio standards on each consumer’s electric bill annually in December (HB 1550).
The other (HB 317) would require legislative approval for any increase in the so-called “systems benefits charge,” which funds energy efficiency initiatives; the third (HB 1555) would require the PUC to advocate on behalf of New Hampshire when negotiating on regional energy issues. The third bill is designed to ensure that, as much as possible, Granite State electricity customers don’t bear the costs associated with renewable energy initiatives in other states that we partner with in the regional grid. Massachusetts and Connecticut, for example, are both making large purchases of renewable energy at above-market costs.
“As a part of the ISO-NE grid, New Hampshire energy policy is connected to the decisions of our regional neighbors,” said Sununu. “It’s critical that New Hampshire’s ratepayers do not bear the burden of the costly policy decisions of Southern New England. This bill will provide the state of New Hampshire with another tool to negotiate with our neighboring states.”
Chris Ellms Jr., energy adviser in the Office of Strategic Initiatives, says what happens to the strategy now is largely up to lawmakers.
“It’s meant as a document for policymakers,” he said. “They can take it and act on it, or not act on it. It’s in their hands. We produced it as a framework for them.”