Sen. Jeb Bradley and Rep. Herb Richardson: Homegrown renewable energy gets boost from legislation

Published: 5/31/2018 12:10:00 AM

As the 2018 Legislative session winds down, critical renewable energy legislation is headed to Gov. Chris Sununu’s desk. At stake is protecting over 1,000 jobs, the property tax base of towns, sustainable waste disposal and the reliability of our electric generation facilities.

Senate Bills 365, 446 and 577, all bipartisan, will support homegrown New Hampshire renewable energy vital to the job base of our state, particularly in the North Country. Seven biomass plants burn wood chips to produce electricity. Numerous small hydroelectric facilities generate throughout New Hampshire. The Wheelabrator Concord waste-to-energy facility accepts solid waste from many central New Hampshire towns and produces electricity from processing that waste. What all of these facilities have in common is that they sell their electrical output into the New England grid and the prices they receive are very low because they are tied to the wholesale price of New England’s dominant fuel, natural gas.

Representatives of the biomass plants have testified in Concord that absent action by the Legislature they face closure. Last year one of the biomass plants in Alexandria closed. Pinetree Power owns two biomass plants in Tamworth and Bethlehem. They have made it clear that they will close without legislative action. A biomass plant in Bridgewater plans to operate only part of the year.

The Burgess Plant in Berlin, which also produces electricity by burning wood, sells its output to Eversource under an expiring purchase power agreement approved by the Public Utilities Commission. The bottom line is the same for Burgess and all of these New Hampshire-based renewable energy generators – they are at significant risk of closure because of low wholesale electricity prices.

Would it matter if these biomass, hydroelectric and waste-to-energy plants close? The answer is an unequivocal yes.

According to the Timberland Owners Association of New Hampshire, the seven biomass plants alone provide 1,152 jobs that are either direct jobs at the plants or jobs in the forest products industry supplying the renewable fuel, wood. Additionally, 2,593 jobs could be impacted in the sawmill industry in New Hampshire as these facilities need a place to dispose of wood waste from their operations. The economic activity related to the seven biomass plants is nearly $320 million and the economic activity of the sawmills is almost another $450 million.

New Hampshire’s many small hydroelectric facilities are spread throughout our state and provide electricity, flood control, property tax revenue and jobs. Were the Wheelabrator facility to close, a number of central New Hampshire towns could expect higher solid waste disposal costs increasing property taxes. Additionally, closure means loss of a critical way of safely disposing of unused prescription drugs at Wheelabrator that come from drug take-back programs administered by law enforcement agencies.

Loss of New Hampshire’s renewable energy industry due to low wholesale electricity costs would cause widespread job loss and harm communities’ property tax bases. Timber tax, hydro fees and business tax revenue would be adversely affected. There would be a significant spike in unemployment if renewable energy facilities close that could lead to an increase in the unemployment tax every large and small employer pays in New Hampshire.

The bad news would not stop there. New Hampshire’s renewable energy facilities produce more than 200 megawatts of electricity at a time in New England when the Independent System Operator, which runs the regional power grid, is warning of future blackouts because the region may not have enough electric generation capacity.

Furthermore, the future cost of electricity would increase in New Hampshire should these renewable facilities close as the plants are part of the New England grid’s required supply of “capacity.” Replacement of that lost capacity will increase costs. A former utility executive estimated that electricity costs for New Hampshire consumers would increase by $17 million annually if these facilities close.

How has the Legislature responded to the threat of these renewable energy facilities closing? The three bills on their way to the governor’s desk form a comprehensive strategy to ensure continued operation of existing facilities as well as some opportunity for expansion of renewable resources.

SB 365 will provide a three-year window for the six biomass plants and the Wheelabrator facility to receive reimbursement that is tied to what is known as default electric service. Utilities today deliver power to customers but also supply default service to those customers (largely residential) who do not choose their own electricity generator.

Under SB 365 the biomass plants and Wheelabrator would receive the default service rate discounted by 20 percent for three years, which would allow them to cover their costs and continue to operate. After three years this legislation would have to be evaluated before renewal or change.

SB 577 will extend the current rate order by three years for the Burgess Power Plant, also allowing for continued operation of that facility.

SB 446 will lift the one-megawatt cap on net metering projects to five megawatts. Net metering allows a homeowner to install a solar system and generate electricity for their own use and “run the meter backward” or net meter when producing a surplus of power. The Public Utilities Commission just went through a long process to establish a rate for net metering that avoids cost shifting to other customers. Allowing net metering up to five megawatts will provide an opportunity for New Hampshire’s small hydroelectric facilities to generate more revenue and continue to operate. This legislation will also allow New Hampshire’s towns, schools and businesses greater opportunities to produce power for their own consumption, making businesses more competitive and enabling public facilities to help taxpayers through lower energy costs.

The cost is nominal for continued operation of these facilities. Protecting the jobs of hard-working New Hampshire residents, the property tax bases of affected host communities and the reliability of our electric system are all vital to our state, which underscores the importance of these three pieces of legislation.

(Jeb Bradley, a Wolfeboro Republican, is majority leader of the N.H. Senate. Herb Richardson, a Lancaster Republican, represents Coos District 4 in the N.H. House of Representatives.)

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