CONCORD — The Public Utilities Commission has refused to order Eversource, the state’s largest distribution utility, to purchase power from the state’s six wood-fired power plants, despite a new law that requires such purchases to promote renewable energy and encourage fuel diversity in New Hampshire’s energy supply.
A bill that became law over Gov. Chris Sununu’s veto remains unenforced with no sign that the relief sought by the financially troubled wood-fired power plants is coming any time soon.
The question of whether Eversource should be required to make the above-market purchases, and pass the additional cost along to its ratepayers, commanded lawmakers’ attention for much of the 2018 session.
The House and Senate eventually passed Senate Bill 365, which was also intended to subsidize the six wood-fired power plants in the Eversource service area, and one trash-to-energy power plant in Concord.
Without the guarantee of a buyer at above-market prices, the power plants would likely go out of business, costing jobs and other economic opportunities in some of the most economically depressed parts of the state.
The wood-burning plants are located in Springfield, Whitefield, Alexandria, Bridgewater, Tamworth and Bethlehem.
Lawmakers bought into those arguments, passed the bill with bipartisan majorities in the House and Senate, and then overrode a veto by Sununu.
By now, most of those supporting the legislation thought the contracts between Eversource and the power plants would be signed, sealed and delivered, but that’s far from the case.
The ink was barely dry on the new law when it was challenged in November by the New England Ratepayers Association in a petition filed with the Federal Energy Regulatory Commission (FERC).
The ratepayer group argues that the state exceeded its constitutional authority by, in effect, setting wholesale energy rates, a prerogative reserved for FERC as a matter of interstate commerce.
The power plants wanted state regulators to enforce SB 365 while the case works its way through the federal agency but they declined.
In its recent order, the PUC says it can only act on agreements between Eversource and the power plants, and the two sides have not been able to reach any agreement.
“Accordingly, we are not able to act until Eversource selects proposals from (the power plants) and submits them to the commission for review.”
Eversource wants contingency clauses that will protect ratepayers and ensure refunds if the law is ultimately ruled invalid, assurances the power plants do not want to provide.
In 2018, the average wholesale price for electricity in New Hampshire was approximately $42 per megawatt, while SB 365 would require Eversource to pay $77 per megawatt and pass the difference onto its ratepayers.
That could result in $11 million in over-market prices to Eversource customers in the first six months of the program, according to the utility.
“We find no express authority in the law for the commission to order Eversource to sign agreements, or to order Eversource to purchase power from the (wood-fired plants) in the absence of any agreement,” according to the PUC order of Jan. 11.
The state regulators urged both sides to go back to the negotiating table and try to come up with an agreement that includes the customer protections Eversource is seeking.