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State Rep. Jim McConnell: Sununu ‘blundered badly’ by vetoing energy bills



For the Monitor
Tuesday, September 11, 2018

Gov. Chris Sununu blundered badly by vetoing Senate Bill 365 (use of biomass and waste-to-energy facilities) and Senate Bill 446 (net metering limits for customer generators). Both his reasoning and his numbers are wrong.

With regard to SB 365, it’s worth remembering that New Hampshire is the second most forested state in the nation. Healthy forests are critical to the state’s tourism and timber industries. Forty percent of wood harvested in New Hampshire is wood chips, and the consumers of those wood chips are primarily the state’s six biomass facilities. Absent that demand, New Hampshire’s timber industry is widely seen as unsustainable.

Before the governor’s veto, I thought everyone in state government understood that New Hampshire had a bifurcated economy – that the four counties benefiting from the intellectual horsepower spilling out of Boston are prospering and provide the bulk of the state’s domestic product and that the other six counties range from struggling to circling the drain. While timber industry and related jobs are spread throughout the state, they are concentrated in the six struggling counties. Obviously, as the struggling counties’ economies shrink, the health of the timber industry becomes increasingly important and probably critical.

Gov. Sununu’s financial analysis of SB 365 is also wrong.

First, the fiscal note the Public Utilities Commission attached to SB 365 lists $18.7 million in biomass energy purchases from Eversource and $2.7 million from Unitil – the two companies involved. This totals $21.4 million, not the $25 million subsidy the governor referred to in his veto message. Second, the governor fails to acknowledge that his veto will require replacing the 100 megawatts of currently provided biomass capacity.

The immediate shortfall resulting from the closure of the biomass plants is expected to be provided by power supplied under the current default rates until the next auction. This is the basis for the Public Utilities Commission’s estimates. Testimony before the Science, Technology and Energy Committee indicated the most likely permanent replacement option is $17 million of new capacity contracts that will begin in 2022 and continue indefinitely. It should be noted that $17 million is the initial estimate. According to a 2016 Plymouth State University study, the biomass industry alone generates $254 million of economic activity annually – a more than 11 to 1 return on the projected $21.4 million subsidy.

In the end, the average residential electric customer would pay less than two dollars extra a month, certainly less than the state would otherwise ensure ratepayers provide to keep the six suffering counties afloat.

It is interesting to note that Gov. Sununu had no difficulty signing SB 577, which extends certain provisions of a long-term power sales contract with Eversource. The first paragraph of SB 577 reads as follows: “The general court finds that the continued operation of the Burgess BioPower plant in Berlin is important to the energy infrastructure of the state of New Hampshire and important for the attainment of renewable energy portfolio standard goals of fuel diversity, capacity and sustainability.”

Gov. Sununu’s analysis of SB 446 is also flawed. SB 446 offers municipalities, businesses and other large electricity consumers the opportunity to generate up to 5 megawatts of their own power and sell any excess. It is important to note that this is sustainable local power installed by the consumer, which is subsidy free, diversifies our energy sources, and reduces overall transmission and peak demand costs.

The governor’s veto message claims SB 446 will cost ratepayers at least $5 to $10 million annually. I can’t find any evidence to support his claim. The fiscal note attached to SB 446, prepared by the Public Utilities Commission, offers no financial estimates but does strongly suggest a view at odds with the governor’s. Their final paragraph concludes: “To the extent state, county or local governmental units are able to install their own renewable generation facilities, those governmental entities may benefit from lower electricity costs and may also receive revenues in the form of net metered payments for excess power generated.”

I’ll be voting to override the governor’s vetoes of SB 365 and SB 446.

(Rep. Jim McConnell of North Swanzey represents Cheshire District 12 in the New Hampshire House of Representatives.)