CONCORD — Gov. Chris Sununu may not like the state’s new law providing electric ratepayer subsidies to wood-burning power plants, but his attorney general will defend the law against a challenge before the Federal Energy Regulatory Commission (FERC).
In a protest filed with FERC on Dec. 8, Attorney General Gordon MacDonald mounts a vigorous defense of the law that Sununu unsuccessfully attempted to veto.
MacDonald was responding to a Nov. 2 petition filed with FERC by the New England Ratepayers Association, challenging the legality of the biomass subsidy bill (SB 365) that became law when the House and Senate voted in September to override Sununu’s veto.
The override came after an intense lobbying campaign, with the forestry industry leading the override forces, while the Business and Industry Association urged lawmakers to sustain Sununu’s veto and kill the bill, citing the state’s high electric prices.
Having lost the battle at the State House, at least for now, opponents of SB 365 turned their attention to FERC in the hope of a regulatory solution.
On one side are the ratepayers’ association, the governor and the state-appointed lawyer representing consumer interests in utility issues (the so-called consumer advocate).
They say the law forces utilities to pay higher-than-market prices to wood-burning power plants, with the additional costs passed along to ratepayers.
Supporters of the law argue that, for a small increase in their electric bills, Granite State ratepayers can ensure that six wood-burning power plants scattered throughout the state and a trash-to-energy plant in Concord remain in business, sustain about 1,000 jobs and ensure that forest land owners have a market for the byproducts of their harvest.
In protesting the ratepayer association petition, attorneys for the state maintain that the petition is premature and should be dismissed, at least until the state Public Utilities Commission has a chance to implement the new law.
The state also argues that FERC should not be making declarations that interpret New Hampshire statutes, particularly one regulating a matter of “health and safety.”
“In enacting SB 365, the New Hampshire Legislature specifically found that (the biomass plants) are important not only to the state’s economy but also because they provide fuel diversity and environmental benefits, which protect the health and safety of the state’s citizens and physical environment of the state,” according to the state protest.
“The commission should allow the state regulatory agency to implement the statute and if there are objections to its implementation, allow the party that is alleging harm to take the matter up with the appropriate court.”
Attorney Don Kreis, the state consumer advocate on utility issues, says the state does not need to wait for the law to be implemented to know that it will increase retail electricity prices. Federal law protects retail electricity customers from subsidizing non-competitive power plants through higher-than-market prices.
“SB 365 is an unabashed frontal assault on this consumer protection,” according to Kreis.
The law requires Eversource, the utility whose franchise area includes the state’s six wood-fired power plants, to buy power from the plants at 80 percent of the retail price, known as the retail default rate.
To make his case, Kreis points out that the current retail rate for Eversource customers is 9.4 cents per kilowatt hour, or $94.12 per megawatt-hour. The market-based wholesale rate for New Hampshire was $30.51 per megawatt hour as of Sept. 25.
Saddling New Hampshire ratepayers with the difference adds up to an additional $25 million a year on electric bills for the next three years, according to Sununu’s estimates.
Also intervening in the FERC action is a group of 13 New Hampshire residents, led by Katie Lajoie of Charleston, who specifically oppose the SB 365 subsidy designed to sustain the Wheelabrator trash incinerator in Concord.
“A FERC decision that upholds the Ratepayers Association petition will provide the opportunity for legislators to meaningfully address clean energy options for New Hampshire, including the availability of safe alternatives to waste incineration,” according to Lajoie.