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Our Turn: Biomass bill is a bad deal for New Hampshire



For the Monitor
Monday, June 19, 2017

New Hampshire legislators continue to look at electric ratepayers as nothing more than ATM machines for special interest groups.

Earlier this month, the Republican-controlled state Senate agreed to raise electricity costs on families and businesses by up to $25 million annually when it agreed to the House version of Senate Bill 129. In order to cover their tracks, they also announced that they will try to repeal the electric consumption tax, which would save consumers $6 million a year.

Lower electric rates by $6 million and raise them by $25 million while trying to convince everyone they are saving us money. Why do so many elected officials sell these “good deals” which are only good for the special interest groups and not the ratepayers?

SB 129, which will reach Gov. Chris Sununu’s desk soon, will increase the price of renewable energy certificates, or RECs, paid to biomass generators that began operation prior to 2006 (yes, there is a special carve-out in the law for these old generators) as well as increase the number of RECs utilities need to purchase to comply with New Hampshire’s Renewable Portfolio Standard. The RPS has already cost New Hampshire ratepayers hundreds of millions of dollars since its inception in 2008, but apparently that isn’t enough.

Even if the governor vetoes this bill and it is sustained by the Legislature, these plants will still receive millions of dollars per year in existing ratepayer subsidies – but they want more. We use the term “want” because no one actually knows how much they need as the owners of these facilities refuse to let the state see their books.

The biomass industry claims it needs additional ratepayer assistance to keep its plants operating due to falling wholesale electricity rates. There are several factors driving this drop, the most significant one being low natural gas prices, but policies like RPS have contributed by artificially suppressing wholesale electricity market prices.

It’s unfortunate that the biomass industry is struggling, and no one wants to see people lose jobs, but ratepayers have been subsidizing the industry for decades. Temporary support has become a permanent subsidy. While it may be a tough pill to swallow, we need to draw the line as to whether selected industries should get millions of dollars in public support in perpetuity. We must ask the question whether biomass plants are more important than small manufacturers, the retail sector, tourism businesses or any other company where the cost of doing business keeps going up. The answer is no.

The stark reality is that biomass plants cannot compete in the electricity markets. They aren’t a nascent industry looking to nurture its product with just a little extra, temporary support from ratepayers. They are old, inefficient dinosaurs that have been directly supported by federal and state policies since the Public Utility and Regulatory Policy Act of 1978.

The other secret that no one wants to talk about is CO2 emissions from wood-burning plants. There is substantial evidence that the CO2 emissions per kWh emitted by a biomass plant is similar to that of coal plants. In fact, the Partnership for Policy Integrity claims that CO2 emissions from biomass generation is 150 percent that of coal, and information provided by Volker Quaschning in Germany also shows emissions from biomass to be higher than that of coal.

If SB 129 passes, ratepayers will not only be paying $25 million more per year for energy that is not economical, but does not provide any environmental benefit either.

For years, the business community has implored elected officials to “do something” about electric rates, but passing SB 129 isn’t what they had in mind. In fact, the New Hampshire Business and Industry Association and major employers like BAE Systems, Sig Sauer, Globe Manufacturing and Whelen Engineering – all significant energy users that employ thousands of people – oppose the bill. Many elected officials campaigned on lowering electric rates, but if SB 129 passes it will increase energy costs by $25 million every year over and above the millions we already pay to support biomass.

SB 129 is a bad bill that will increase the cost of electricity to New Hampshire’s families and businesses. It’s time for someone to stand up for New Hampshire’s ratepayers and stop sending their hard-earned money to special interest groups.

Call Gov. Sununu at 271-2121 and tell him to veto SB 129. It’s time for someone to stand up for the ratepayers and not the special interest groups.

(Marc Brown is the executive director of the New England Ratepayers Association. Michael Harrington is a state representative from Strafford and past commissioner at the Public Utilities Commission.)