What business people and legislators need to understand before the veto override vote on October 26
Governor Sununu’s recent veto of HB 142 derails a bipartisan fix to a problem New Hampshire regulators helped cause and threatens to put Burgess BioPower, a vital north country power plant, out of service.
The veto message says “enough is enough with the ratepayer subsidies” for this plant. But as a member of the House committee who heard the bill, I can tell you that HB 142 was an agreement by the parties to prohibit any future subsidies while absolving the plant of its “on paper only” debt which has been accruing for the past 10 years of the plant’s 20-year power purchase agreement (PPA) with Eversource.
Burgess agreed to deliver their 75 megawatts of clean base load to Eversource for a rate of approximately 6.9 cents/kWh for the length of the contract. The New Hampshire Public Utilities Commission (PUC) inserted a last-minute clause into the power purchase agreement (PPA) that let Eversource recover any difference between the day-ahead-market price and the PPA price from their customers.
This last-minute clause basically indemnified Eversource from missing out on lower energy pricing in the day-ahead market. It changed the deal. Burgess BioPower’s 20-year stable price was supposed to be Eversource’s hedge against price changes. But the PUC forced Burgess to carry any price difference as an accrued debt on the plant’s books, even though there was no actual debt, and Eversource was still recovering any difference from its customers. The plant asked Eversource to come back to the negotiating table because it knew it had been pushed into a bad deal, and when that did not work, they turned to the Legislature.
Governor Sununu’s veto comes after the bill passed both the House and Senate, and 10 years of sunk costs have been paid by Eversource customers, to Eversource, to meet the burden of this clause.
Eversource has been selling Burgess’s power directly into the energy market rather than using it to serve customers for some time now, and no one is sure who gains the benefits of those transactions.
But rather than use his considerable influence to bring the parties to the table, the governor has chosen to lay the blame for this regulatory snafu on our last, essential biomass plant. The plant New Hampshire loggers and sawmill operators depend on for their business model, especially since the governor forced our other six biomass plants to close in 2019. Those plants were also shuttered by veto (HB 183), for which the Governor lobbied his own party to overcome the House’s veto-proof majority!
The hearings for HB 142 were compelling. Berlin’s mayor told us of the huge tax, water/sewer and job losses that Berlin and Coos County would suffer if we close this plant with our votes. We heard of the multimillion dollar impacts on the timber industry in all 10 counties and the delicate balance biomass helps the state maintain through sensible, synergistic forestry management.
If there’s nowhere in-state to sell low-grade timber products, the economics of an entire industry unravels. The beauty, health and value of our wooded lands will be diminished on our watch. Ask yourselves, for what good reason? We’ve agreed to no more subsidies and Eversource has already recovered the difference between the PPA price and the lowest spot price from its ratepayers — so that’s water under the bridge.
When did we decide that state officials have no duty to our communities when they warn us of harm to New Hampshire’s economy, jobs, tax base, industry (timber/tourist/forestry), energy mix and environment? Aren’t these the very things elected representatives profess to care about?
Please ask your legislators, in the House and Senate, to leave politics aside and uphold the will of the people on veto override day, October 26. Our constituents will thank us and the people of the award-winning Burgess BioPower plant and the City of Berlin, NH, will be thrilled that Granite Staters still support our valuable, home-grown businesses.
— — NH Business Review
NH State Rep. Kat McGhee (Hillsborough 27, Hollis) is a ranking member of the House Science, Technology and Energy Committee.