If there’s a $1 million fund to help Concord Steam customers convert to gas, who should pay it?

  • Hoses carrying gas are seen connected to a boiler furnace at the Concord Steam Corp. plant in Concord on Tuesday, June 9, 2015. Elizabeth Frantz

  • The Concord Steam Corporation plant on Pleasant Street at night.

Monitor staff
Published: 12/22/2016 8:54:44 PM

A slew of downtown Concord nonprofits and landlords reiterated their request for help covering the cost of switching from soon-to-be-defunct Concord Steam, but faced the unanswered question of whether that assistance should be covered by other Liberty Utilities customers.

The statements came during a preliminary hearing Wednesday about a proposal for Liberty Utilities to provide a $1 million fund to help owners of some of the roughly 180 buildings still heated by Concord Steam switch to natural gas or other fuels. After years of financial and technical turmoil, Concord Steam is scheduled to close in May; Liberty Utilities bought its customer base and some assets – but not the power plant – for $1.9 million.

A proposal first put forward in October in a petition organized by state Sen. Dan Feltes, a Concord Democrat, would have Liberty Utilities provide the assistance fund. The company has agreed, but wants to add the fund to its “regulatory assets,” or costs it is allowed to recuperate through gas rates at a guaranteed rate of return of about 10 percent. It was that aspect of the plan which raised concerns Wednesday.

“Most of what I pay as a residential customer (of Liberty Utilities) is not for gas but for various distribution charges, mandatory charges, and I would hate to see those go up,” said Roy Schweiker, who petitioned to join the discussion as a city resident. “All these co-petitioners are institutions; I don’t know why the petition shouldn’t have said that the (extra rate) charge should only go to institutional customers, or to heating customers and not those that use natural gas for cooking.”

Similar concerns were echoed by Don Maurice Kreis, the state consumer advocate, who said he “reluctantly but unambiguously” opposed the plan.

“This is a petition that asks for many utility customers to help a relatively small group of utility customers that have some compelling needs. That request is unfair,” Kreis said.

Speakers who supported the fund at Wednesday’s hearing included representatives of nonprofits such as two churches, the Capitol Center for the Arts – which uses Concord Steam to melt ice on its sidewalks and to heat its stage – the Brain Injury Association and the YMCA, all of which said that the unexpected cost of conversion would hurt their mission. The cost of installing gas-fired boilers, changing pipes within a building, and hooking up to gas was pegged between $15,000 and $75,000 or more, depending on the site.

Compounding the problem, many in attendance said, was the short amount of time given to make a switch. Although Concord Steam has teetered on the edge of financial problems for years, it held out hope for a turnaround until July, when it announced that it would close at the end of the current heating season.

“We had been planning a conversion ... but we assumed there would be a run-out period. We did not anticipate it would be as short as one year,” Michael Gfroerer of South Congregational Church said.

Also speaking Wednesday were several landlords of affected buildings with scores of apartments as well as commercial and retail space, who bemoaned the effect that the conversion cost would have on tenants or on their ability to cope in a stagnant commercial market.

“Should I be deeper in debt because of this?” asked Remi Hinxhia, who owns two buildings served by Concord Steam.

Arthur Arnive, who owns eight buildings that use Concord Steam, said the scramble to make the conversion was putting pressure on his family business.

“This petition, if it comes through and provides any relief for us to get some sort of funding, that would be appreciated,” he said.

A representative of Liberty Utilities said that “roughly half” of Concord Steam’s customers have converted already, almost all to gas.

The Public Utilities Commission is expected to hold a public hearing on the $1 million fund proposal early next year.

Concord Steam customers include the state office complex, several Concord government buildings around City Hall, and four city schools including Concord High School. Both the state and city government have approved emergency funds to pay for the conversion, although the timetable is too short for the buildings around the State House, which face historic district concerns.

The long-term solution for the downtown state buildings may involve burying a new boiler under the parking lot next to the New Hampshire State Library, using newly installed underground pipes to provide heat to the State House, Legislative Office Building, state annex and Department of Justice buildings. In the meantime, a temporary boiler may be placed in the parking lot next to the Department of Justice using existing steam pipes surrounding the four-block state office park to keep the State House and other buildings warm next winter.

Concord Steam has suffered in recent years from increasing maintenance costs for its wood-burning steam plant on the Hugh Gallen State Office Park, which was built in 1938, and a loss of customers lured by the low cost of natural gas. It says it faced a financial “death spiral” before Liberty Utilities offered to buy it.

(David Brooks can be reached at 369-3313 or dbrooks@cmonitor.com or on Twitter @GraniteGeek.)

David Brooks bio photo

David Brooks is a reporter and the writer of the sci/tech column Granite Geek and blog granitegeek.org, as well as moderator of Science Cafe Concord events. After obtaining a bachelor’s degree in mathematics he became a newspaperman, working in Virginia and Tennessee before spending 28 years at the Nashua Telegraph . He joined the Monitor in 2015.

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