By GARRY RAYNO, InDepthNH.org
CONCORD – Lawmakers this week will address two electric generation issues that may not be as controversial as they once were, but still need vigorous discussion before determining the long-term goals.
The issues are subsidies for wood-burning electric generating plants and net metering – or the practice of selling surplus electricity generated from renewable sources such as solar panels or wind turbines – to your utility.
Taken together the two items would nudge the state toward more renewable energy and a smaller carbon footprint, while the wood-burners subsidy would also preserve a forest products industry in the economically challenged North Country.
But they would also increase the cost of electricity for everyone from the smallest to the largest users, and from the least capable of paying to the wealthiest customers.
Like many things in the utility universe, it is not a black and white decision but rather a delicate balancing act among competing interests, some better connected (sorry) politically than others.
Both the subsidy and net-metering expansion were hotly debated by lawmakers last year and Gov. Chris Sununu weighed in by vetoing Senate Bill 365, the wood-burning subsidy, and Senate Bill 446, expanding the net metering limit from one to five megawatts.
The Senate voted 21-3 to override the vetoes, but the House only mustered the two-thirds majority needed to override for SB 365.
While that bill became law, it has yet to be implemented.
The bill requires utilities to buy electricity from six biomass or wood-burning plants for three years at 80 percent of the default electric rate, which is higher than the wholesale rate utilities would pay in the open market.
Eversource has yet to reach agreements with the six plants although they have solicited proposals, but is waiting for the Federal Energy Regulatory Commission to rule on a petition filed by the New England Ratepayers Association.
The petition asks federal regulators to find that SB 365 violates the Federal Power Act which gives FERC the exclusive power to set wholesale rates.
The petition created a ripple effect essentially freezing everything until there is a ruling and the power plants say they are in danger of closing. The biomass plants recently asked the state Supreme Court to intervene.
“These delays prevent the plants from operating under the law’s benefits and, instead, force the plants into economic shutdown. The litigation efforts are causing major job losses and issues in our forest economy,” said Sen. Jeb Bradley, R-Wolfeboro, one of a group of bipartisan senators who will introduce an amendment this week to to preserve the state policy enacted in SB 365, while attempting to avoid a protracted legal fight.
In a statement Bradley said the litigation is undermining jobs in the forest products industry and harming the diversity of the state’s generation mix.
The over-market costs of the wood-burning plants have been an issue for some time. Utilities were required to buy the power to make the state less reliant on fossil fuels to generate electricity during fuel shortages in the 1970s.
The number of plants have diminished, ownership has changed and some wonder who is being served by continuing their operations. But supporters note the plants’ boost to the North Country’s economy and the forest industry and plant operation jobs as reason to continue the subsidy.
The bottom line is ratepayers are paying a little more for the subsidies, the question is if the benefits are worth the additional costs.
Net metering, which both the House and Senate agreed to expand to five megawatts this year is a little more complicated in terms of the delicate balance.
The federal and state governments have offered homeowners subsidies and tax breaks for solar panels in recent years with the Obama administration offering significant incentives both for homeowners and large installations as a way to help boost a fledgling American industry in an arena dominated by China.
The Obama administration also offered significant tax breaks for wind farms causing a proliferation of projects in New Hampshire most owned by European energy conglomerates, but most of those incentives no longer exist.
Federal subsidies are like state subsidies in that users pay a little more but the cost of federal grants are spread over a far larger base, which lowers the individual cost.
Net metering is another way to subsidize solar panels or wind turbines on a small scale that significantly reduce the payback time for investments.
In New Hampshire, subsidies were done through Public Utilities Commission’s renewable energy fund, which provided money for solar arrays. While the program was intended to help spread solar energy around the state, much of the money went to Dartmouth and other large institutions. One proposal from Manchester and Eversource would have drained the fund for several years but was rejected.
So now incentives are more modest and perhaps the biggest is net metering which allows small solar generators to “sell” surplus power to the utilities at the retail rate to offset what the owner uses when the solar panels are not working such as during a snow storm.
Legislators and regulators have grappled with the rate issue for years and changes will be coming in the future but it currently is a one-to-one offset of retail price.
The price of solar panels has been a disincentive for low-to-moderate-income homeowners who have found it difficult to get into the market.
The price is coming down significantly and solar energy is much more affordable than in the past, but low-income residents still have few alternatives to buying their electricity from a utility.
Some communities have solar generating arrays that are used to reduce the cost of electricity for the entire community which to some extent reduces costs for all residents, but if you are a renter, the savings may be hard to discern.
Many colleges and businesses have taken advantage of solar energy as places like Dartmouth, Plymouth State University, Southern New Hampshire College and Colby-Sawyer College produce a portion of their own electricity, lowering their costs in the long term and reducing their carbon footprint.
And many communities have a policy of not taxing residential solar arrays on roofs or small ground units.
Net metering also reduces demand, which is good and bad.
Reducing demand during peak usage reduces costs, but reducing demand overall means less volume, which increases prices.
This week the House will vote on several bills expanding the net metering program and another dealing with storage for self-generators that will revolutionize the renewable energy industry in the next decade.
Like wood subsidies, there are tradeoffs.
Net metering can save money and lower the carbon footprint, but low-income residents reap few if any benefits.
In both cases, lawmakers will have to determine the greater good, whether the upside is greater than the downside, and who benefits.
That is what lawmakers will have to decide this session and in coming years.
Garry Rayno may be reached at email@example.com
Distant Dome by veteran journalist Garry Rayno explores a broader perspective on the State House and state happenings for InDepthNH.org. 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. InDepthNH.org is New Hampshire’s only nonprofit, online news outlet dedicated to holding government accountable and giving voice to marginalized people, places and ideas.