CONCORD — Sen. Bob Giuda, one of the sponsors of Senate Bill 446 who is pushing for an override of the governor’s veto, said the net-metering bill poses an existential threat to the distribution monopoly that is responsible for the largest portion of New Hampshire’s electric bills.
Gov. John Sununu vetoed that bill, along with a companion bill that would increase the incentives for biomass plants, contending that businesses and residents cannot afford the higher electric rates that passage of the bills would bring.
Giuda said the biomass veto achieves a savings of $1.78 on the average homeowner’s electric bill, but the long-term impact of forcing the closing of the biomass plants will far exceed the estimated $18 million in savings. Not only would their closing result in the loss of jobs at the plants, he said; without a way to get rid of the low-grade wood in logging operations, forestry operations will not be profitable, putting logistical support positions in jeopardy — truckers, loggers, chippers, sawmills, and wood manufacturers.
A study by Plymouth State University found that more than 900 jobs would be directly affected — a finding that matched a regional study.
In a letter to Sununu, Giuda and co-sponsor Kevin Avard wrote that forest products form part of a “three-legged stool” that also includes tourism and recreation.
“The annual value of sales and output of New Hampshire’s forest products industry totals nearly $1.4 billion, while the forest-based recreation economy adds approximately another $1.4 billion to the state economy. Approximately 7,700 workers are employed in the forest products, maple and Christmas tree sectors while another 10,800 jobs are found in the sectors that support the forest recreation industry,” they wrote, saying Sununu’s vetoes may inflict “irreparable harm” in dozens of communities.
In a telephone interview, Giuda added, “You have to look, too, at the lack of other jobs to replace the ones you’re going to lose, and you start seeing stress on relationships, an increase in substance abuse — all the things that aren’t captured in the money we’re ‘saving’ at $1.78 per household,” Giuda said.
Of the $18 million in total savings, Guida subtracts $17 million in the loss of electric generating capacity. He expects the loss of jobs will result in home foreclosures to make up the other $1 million. Then there will be the loss of timber tax revenue which makes up a significant portion of income for many New Hampshire communities, he said.
Beyond the economic impact is the end of best-forestry practices, leading to a decline in forest health. Giuda does not dispute what one letter-writer said about the forest being able to survive, but he said the quality of the timber will decline, and landowners do not want to see dead trees lying around on their property.
“One could argue that the forests will be fine on their own, but the forests would get choked up and there would be a degrading of the lumber,” he said.
The other thing biomass plants provide is a stable energy source, since there is a perpetual source of fuel. They generate electricity by burning the low-grade wood that otherwise would be left behind in logging operations.
The bill’s sponsors say biomass provides a hedge against “the ever-increasing regional transmission and capacity charges being shifted onto New Hampshire ratepayers, and the cost volatility of natural gas generation, which comprises almost 50 percent of New England generation capacity.”
Giuda said the net-metering bill represents a chance to challenge the monopolies that are responsible for the largest portion of electric costs. He pointed out that, shortly after the governor’s veto, the New Hampshire Public Utilities Commission approved a 19.2 percent increase in electric rates to cover the cost of long-distance transmission.
SB 446 would encourage an expansion of smaller power producers who would not require the long-distance transmission of power, Giuda said. It would increase the limit on the net metering program – which allows small power producers to sell excess electricity back into the grid – from a peak capacity of 1 megawatt to 5 megawatts.
New Hampshire Union Leader editorial page editor Grant Bosse said that expansion would allow larger power generators to become eligible for net metering, extending the program from homeowners and small businesses to commercial and municipal customers.
“So what?” asked Giuda. “A large local company would be profiting, rather than an out-of-state monopoly.”
He conceded, “There is an argument to be made that, because the net-metering setup puts energy back into grid, if you sell at retail rates, you’re not picking up a fair cost of transmission and distribution.”
SB 446 sets the purchase rate at 80 percent of the default power rate that the distribution company is charging its customers.
Giuda said he has attempted to get a breakdown of the default power rate for the different sources of electricity — nuclear, natural gas, hydro, wind, solar — but the utilities will not release that information, saying it is in the interest of competition.
“My question is then, ‘Who are you competing for?’ The competition they’re talking about is other electric providers,” Giuda said. “Don’t we, as customers, have a right to know?”
He also argues for building locally because, when a plant shuts down, it pays a penalty equal to a full year’s base load capacity.
“For example,” he explained, “if a plant shuts down for two weeks, it is charged for a year’s worth of an out-of-state power supply.”
Having in-state capacity to handle New Hampshire’s electric needs is a worthy goal, he said.
“It’s really important because it’s a dagger aimed at the heart of the monopolies in the transmission of power,” he said.
David vs. Goliath
To those who argue that the state should not be providing subsidies to businesses that cannot survive on their own, Giuda responds, “Yes, biomass requires subsidies, but so do oil and gas, with federal subsidies.”
The subsidies cover the risk that companies face with their investments, he said. In the case of biomass and net metering, it is important to make sure the state has a range of energy sources, he said.
He again referred to his letter to Gov. Sununu: “SB 446 supports wood processors and all New Hampshire businesses and municipalities by creating opportunities for them to expand existing, or install small renewable energy projects, whether they’re cogeneration, hydro, solar, or wind. This bill will allow businesses to make investments in New Hampshire and control their energy costs.”
While the governor vetoed the general biomass bill, he signed the bill that provides the subsidy to Burgess BioPower of Berlin, the only plant that has a contract with Eversource.
“The reason Burgess was selected was because it won’t increase electric rates, but it’s still a subsidy,” Giuda said. “Read between the lines. It’s not all that it seems; it’s much more.”
The agreement means that Eversource becomes the exclusive biomass power producer, he said.
“It’s David vs. Goliath, and you’ll hear much more about that in the future,” he said. “Opposition to these bills is a maneuver by Big Power to remove any element of competition.”