Distant Dome is co-published by InDepthNH.org and Manchester Ink Link
By GARRY RAYNO, Distant Dome
At times there is a stark contrast between the two New Hampshires with different cultures and economies, one above the notches and the other below: and an indication the on-going economic boom has left the station without all residents on board.
Northern New Hampshire, especially Coos County, has seen slow economic growth if any at all, while the southern portion from Concord to Nashua to the Seacoast experiences an ever expanding economy.
Thousands of jobs have been created in the golden triangle in the past six years, while employment in Coos County until recently has been declining.
Garry Rayno
State government has done several things to try to spur economic activity in the North Country like a $28 million loan guarantee for the Balsams redevelopment project, but made sure the economic incentives could be applied across the state.
Also state government built a new prison in Berlin followed by the federal government and built an all-terrain vehicle (ATV) park at Jericho Mountain State Park.
But perhaps the biggest incentive from Concord is aimed at helping one of the remaining significant industries in the North Country, forest products or logging, through the subsidized electric rates for wood burning or biomass generating plants like Burgess Biopower plant in Berlin and other smaller, wood-burners in Whitefield, Bethlehem, Tamworth, Bridgewater and elsewhere.
This past legislative session, lawmakers decided to continue the subsidized power purchase agreement with Burgess and the other smaller wood-burning generating plants as well.
Gov. Chris Sununu signed the bill to direct the Public Utilities Commission to extend the agreement with Burgess that was about to reach its subsidy cap, but vetoed the bill that would have continued the subsidy for the other wood-burning facilities.
Sununu also vetoed a bill that would have allowed non-commercial, larger solar, hydro or wind generators to participate in the net metering program which requires electric utilities to buy their excess power.
In vetoing the bills, Sununu said they would add $100 million to electric rates over three years.
“New Hampshire has some of the highest electric rates in the country, placing financial strains on the elderly, those on fixed incomes and the business community,” wrote Sununu in his veto message for the two bills. “These bills send our state in exactly the wrong direction. We need to be taking steps to lower electrics rates, not passing legislation that would cause massive increases.”
After the vetoes, generators, the logging industry and North Country and other supporting lawmakers and officials pushed to override the wood-burning veto, with a number of plant operators saying their facilities will close eliminating many jobs both at the mills and in the logging industry if the governor’s action stands.
For his part, Sununu’s re-election released an ad about the “wood tax” showing lots of money on the table. Business organizations like the Business and Industry Association also stood with the first-term governor.
The political pressure from both sides will continue until lawmakers return Sept. 13 for veto day.
However, this is not a new issue. It has been around almost since the subsidy’s inception under President Jimmy Carter when an oil embargo spurred a program to help wood and trash burning power plants in order to diversify electric-generating sources and move away from fossil-fuel burning plants.
In New Hampshire the problem was compounded by the assumption that electric rates would continue to rise at their then-current levels, which was ultimately much higher than actual rate increases.
The so-called stranded costs from the high-cost power purchase contracts with the wood-burners was one of the key stumbling blocks to the state’s deregulation efforts in the late 1990s. And the subsidies have been under discussion since that time.
If you look at the state’s population, those benefitting from lower rates greatly outnumber those benefitting from the subsidies.
But public policy should be about the state’s greater good, not what is best for the largest number of people. A look at how lawmakers have handled their response to the Claremont education funding lawsuit indicates helping the greatest number of residents has dire consequences for school districts in property-poor communities with growing disparities.
The wood-burning subsidies have both good and bad consequences and lawmakers are paid — however little — to weigh the arguments and decide what is best for the state.
The state’s largest electric utility, Eversource, supported the continued subsidies for the Burgess plant but opposed both the wood-burning and net metering bills that Sununu vetoed.
That probably will not help Eversource’s standing in the North Country which is still celebrating the likely defeat of the Northern Pass project as currently proposed.
However, one element of Northern Pass would have helped the North Country’s economy: the planned upgrade of the Coos Loop transmission line which would have allowed more wind farms to operate and would have helped draw more industry.
If you live in the North Country, you can lose for winning.
A similar situation exists with the Balsams redevelopment project spearheaded by former ski resort mogul Les Otten.
Several years ago Otten sought and received a $28 million state guarantee which he and others say is critical to the $170 million project’s financing.
The Business Finance Authority has put off a vote several times on the guarantee financial institution Service Credit Union says is required if the project is to move forward.
And in June the developers asked to delay a vote on the guarantee in order to discuss possible alternatives with the BFA. Before the resort closed, it employed hundreds of North Country residents, while the fully developed project is projected to create about 1,000 new jobs.
The BFA rules and fiduciary duty are meant to ensure the state’s taxpayers are not needlessly at risk of having to repay $28 million.
Backfired
While the loan and guarantee program has a successful history of helping businesses on the edge of accessing financing from a private lender, one of its first guarantees backfired.
The state guaranteed $15 million in bonds to attract Business Express, a regional airline, to be the first anchor tenant at Pease International Tradeport several years after Pease Air Force Base closed.
Several years later, the airline went bankrupt and the state was out $15 million.
Prior to the establishing the BFA, Public Service of New Hampshire used state-backed pollution control bonds to help finance the Seabrook Station nuclear plant.
When PSNH filed for bankruptcy in 1989, the bonds were outstanding and the state was on the hook for the money.
The decisions to grant Business Express and Public Service the money were intended to benefit the entire state or in the case of Business Express the greater Portsmouth area as it faced the ramifications of the closed military base.
Again that is why lawmakers are paid — however little — to make those decisions just as they will for the wood-burning power plants and larger solar, hydro or wind generators.
But the question remains: “Just what is the good public policy in these two bills?”
The majority of the legislature will not decide that question because Sununu vetoed the bill.
Now it will take a two-thirds majority of both the Senate and House to support the public policy passed originally by a simple majority.
That’s a much higher threshold.
Garry Rayno may be reached at garry.rayno@yahoo.com.
Distant Dome by veteran journalist Garry Rayno explores a broader perspective on the State House and state happenings. Over his three-decade career, Rayno covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat. During his career, his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries. Rayno lives with his wife Carolyn in New London.