Lack of power lines puts Coos engergy plans in limbo

The North Country could wait three or four years before groundbreaking on several proposed wind farms and renewable energy power plants. A few wood-fired boilers might employ loggers idled by the close of a pulp mill and a paper mill last year.

The construction might take even longer if the state hopes to sell other New England states on paying up to 90-percent of the costs for transmission line upgrades.

To obtain this cost sharing, New Hampshire officials would have to make a strong case the extra energy would help the whole regional power market. It could do that by protecting against rolling brownouts. Or it ensure a good supply of the renewable energy credits the regulated utilities have to start buying under clean-power laws in every New England state. New Hampshire could also build the lines faster with no outside aid, but that would likely cost New Hampshire residents more in the end.

An ad hoc group of energy stakeholders convened this week in the Statehouse at the request of Senator Martha Fuller Clark, D-Portsmouth, who chairs the Senate Energy, Environment and Economic Development Committee. She wants the legislature to do all it can to speed things up. Rep. Bill Remick, R-Lancaster, agreed.

“Unless we go faster than this, the people who have the equipment to work in the woods will probably go somewhere else,” Remick said. “All this discussion will be academic. The people up there need jobs right now.”

The challenge is to figure out who pays for potentially hundreds of megawatts of new power line capacity to carry the added electricity to population centers. The Public Utilities Commission is hosting a series of related listening forums to develop a report by Dec. 1 defining the transmission shortage and some approaches to it. Tom Frantz, director of the electric division at the commission, said the next meeting of his study group is early in November.

“I don’t see us working out a New Hampshire-only solution by our deadline,” Frantz said. “But we’ll be looking at a number of options.”

Public Service, which now owns a 100-megawatt power loop around Coos County starting and ending at Littleton, is working on a feasibility study with several scenarios to boost its capacity in the area to 400 or more megawatts. The huge unknown is the physical impact of the extra current along two major trunk lines south from the 115-mile loop in Coos County. The one on the west side of the state is owned by National Grid, the other by Public Service.

“It will likely impact our system,” said Lisa Shapiro, an economist advising National Grid. “It would be great to have a regional solution and share the cost.”

Meanwhile, executives at renewable power suppliers like Tamarack Energy and its competitors are looking for ways they can voluntarily share the investment in transmission upgrades so all their construction plans can advance. Joshua Levine, project developer for Tamarack, said a proposed 75-megawatt, wood-fired plant in Groveton is on hold. Tamarack hopes to build the facility north of the center of town near the Lost Nation transmission substation. It would be a $200-million joint venture with XGenesys Development Corporation.

“We’re not looking for a free ride,” Levine said. “We want to pay our portion of the transmission improvements. We’re all competitors, but we’re putting a lot of ideas on the table. None of us will win unless we collaborate.”

Harry Smith, a vice president at XGenesys, said the cost to build enough long-term power line capacity is unknown, but he’s heard a ballpark figure of $200-million.

“Whatever the amount is, none of us can afford to do the whole upgrade alone,” Smith added.

Donna Gamache of Public Service said the hard part is guessing which players are serious and have the stamina to wait out the regulatory approval process.

“The California model would be the easiest way to absorb the risk,” she said.

The Federal Energy Regulatory Commission this April authorized one of the regional electric grids in California to underwrite the cost to transmit new solar and geothermal power to the populous Pacific coast. The gamble is that future private developers will repay the state in full as they hook into the lines. If Public Service tackles a project like that alone, experts fear ratepayers might eat some stranded costs should too few plants come on line.

“We need to find out who really wants to move forward,” Gamache said.

Rep. John Thomas, R-Belmont, suggested the projects waiting in line, if serious, might prove it by taking out performance bonds. That would lower the risk for taxpayers or ratepayers.

“We don’t want to build a bridge nobody uses,” Thomas said.

Rep. Gene Chandler, R-Bartlett, sits on the House Capital Budget Committee and said a state commitment in the $200-million range would be almost prohibitive.

“Obviously, bonding would be the only way to do it,” Chandler said.

Attorney Doug Patch lobbies for Noble Environmental Power, which hopes to build several hundred megawatts of wind farms in Coos County. Its projects rank first and second in the ISO-New England planning queue under the current rules. Noble might soak up the existing power line capacity if it built first.

“We might even have to spend $10- to $15-million to tighten up the lines in the existing PSNH loop,” Patch said. The wires would expand and sag from their poles under the heat of a stronger current. “Noble is willing to pay its share, but we prefer a regional socialization (sharing) of the costs.”

On a parallel track, policy makers at the national and regional level are meeting with utilities and power plant owners this fall to deal with the biggest catch-22 in energy policy. The country seeks carbon-neutral, renewable sources of energy to prevent global warming and free the economy from foreign oil. But most of the future renewable power plants will occupy remote ridge lines, deserts and forests in places like Coos County and Death Valley.

Worse, only fairly sure renewable projects can bid for tens of millions of dollars in yearly forward-capacity-market payments from the ISO-New England power grid. Ultimately, that money will come from customers in the form of higher energy bills. It’s to ensure the region keeps its existing plants and adds 8,000 megawatts of production in the next 15 or 20 years.

The 525-megawatt Newington plant will get an estimated $19-million in forward-capacity payments this year. The 720-megawatt Granite Ridge plant in Londonderry would be getting $35-million and the 1250-megawatt Seabrook nuclear plant $46-million, according to legislative testimony by Public Service officials this spring.

“If you need a solid commitment on your renewable energy project before you can get this kind of funding, clearly that’s a huge barrier,” Fuller Clark said.

Levine wondered if the state could start out funding its own power lines, find out the new plants would benefit all New England states, then get them to partner with New Hampshire.

“Are those two ways of doing it mutually exclusive?” Levine asked.

Franz said not necessarily, but New Hampshire might get stuck building the whole thing if it looks too willing to do the project alone.

“So there might be a fork in the road soon?” Levine asked.

“That’s certainly possible,” Franz said.