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Third N.H. biomass company winds down operations following Sununu energy bill veto



Monitor staff
Tuesday, July 03, 2018

A third biomass power company has made plans to temporarily wind down operations following a veto by Gov. Chris Sununu of a bill to help prop up the industry, an official confirmed Tuesday.

Bridgewater Power Plant in Ashland joins two other plants in the state that have stopped buying wood chips from local suppliers and are planning to burn through their stockpile in the coming weeks, according to Michael O’Leary, the plant’s asset manager.

The plant will then switch to “dispatch mode,” standing by with a small reserve of fuel ready to provide power at the request of ISO New England, which runs the area electric grid, according to O’Leary.

“It’s unlikely we’re going to run certainly in the shoulder months in the year,” he said, referring to spring and fall when demand for electricity dips. The plant will “definitely” go dark by September and wait for the call to refire, he said.

The decision to cancel wood purchases was a direct result of Sununu’s veto of Senate Bill 365, according to O’Leary. That bill would have mandated that utilities purchase power from the biomass plants – which have struggled to remain profitable amid a flood of cheap natural gas – at 80 percent of the market rate.

The company’s decision was made June 20, according to O’Leary, one day after Sununu’s veto. If the Legislature could override the governor, O’Leary said he’s confident the plant could remain running year-round.

Bridgewater employs 20 workers directly, but it purchases wood product from about 25 logging companies in the area, O’Leary said.

Sununu and other critics of the bill have said the veto was necessary to lower electricity costs and help protect ratepayers from bearing the brunt of the subsidies through higher utility bills. And critics have argued that the profitability problems facing the biomass industry run far deeper than any law can fix.

“Governor Sununu stands by protecting New Hampshire’s most vulnerable ratepayers and trying to turn the tide against our burdensome electricity costs,” the governor’s office said in a statement Monday.

Bridgewater joins Pinetree Bethlehem and Pinetree Tamworth, which both informed suppliers that they would stop purchasing wood shortly after the veto. To date, four out of the state’s six biomass companies have either closed or partially closed; in April 2017, Indeck Energy plant in Alexandria shut its doors, citing an inability to compete with low market prices.

Supporters of the bill – who include Senate Majority Leader Jeb Bradley and other Republicans – are hoping to override the governor when the Legislature reconvenes in September for “veto day.”

In the meantime, the biomass plants are facing their own decision day. Both the Pinetree plants – owned by ENGIE North America – and Bridgewater have made plans to reassess the market in September and determine whether they can stay in business at all.

That could mean focusing operations on winter months, when demand for renewable energy increases.

“The economics over the last couple years have been to the point where we certainly can’t operate fully base-loaded for 12 months of the year,” O’Leary said.

But even partial operation has no guarantee.

“We’re trying to evaluate if that’s something we can handle from a hiring point of view, a wood supply point of view, all the things that go into running a more stable operation,” he said. “We’re in a really difficult spot, and our employees and suppliers are going to be in a difficult spot.”

(Ethan DeWitt can be reached at edewitt@cmonitor.com, or on Twitter at @edewittNH.)