HB142 veto override failure deals devastating blow to biomass plants

That failure creates 'serious financial event' for Burgess BioPower and 'the entire economy of northern New Hampshire'

Speaking at an energy summit a year ago, Representative Michael Vose (R-Epping), chair of the House Science, Technology and Energy Committee, remarked, with a nod from Senator Jeb Bradley (R-Wolfeboro), who has shaped energy policy for three decades, “This feels very much to me like the year of biomass.”

But, the failure of the Legislature to override Governor Chris Sununu’s veto of a bill — HB 142 — to forgive the debt threatening the future of Burgess BioPower, has dealt a severe blow to an already reeling industry within the economy of the North Country while casting a shadow over the management of forested land throughout the state.

In 2011 the Public Utilities Commission, not without reservations, approved the Power Purchase Agreement (PPA) authorizing Burgess BioPower to sell electricity to Public Service Company of New Hampshire (now Eversource). Foremost among the the reservations was the risk that the cost of the power would exceed the price of electricity on the open market, increasing the charges to ratepayers.

To hedge against the risk the PUC added a rider to the PPA, stipulating that if Burgess BioPower charged more than $100 million above the open market price for the same amount of power, it would be required to reimburse the excess within 12 months.

Burgess BioPower began operating in 2014, and since 2017 has exceeded the $100 million cap. Twice, in 2018 and 2022, the Legislature suspended the provision, granting the company more time to make repayment. Vose said that this year the company’s debt reached between $60 and $70 million, well beyond its financial means.

In his veto message, Sununu claimed the company has received more than $200 million in subsidies at the expense of ratepayers since 2014. “Enough is enough,” he said.

Sarah Boone, speaking for Burgess BioPower, said that the failure to override the veto “creates a serious financial event for the company and the entire economy of northern New Hampshire.” She was echoed by Paul Grenier, the mayor of Berlin, who called the vote “a kind of a stake in the heart to the economy of Coos County.”

If Burgess BioPower were to close, nowhere would the shock be greater than in the City of Berlin. The plant supports some 240 jobs, apart from the foresters who harvest biomass in 150 towns across all 10 counties in the state. The company pays 16% of the property taxes, 40% of the water works revenue and 20% of the sewer fees in the city.

At the same time the company partnered with the city in undertaking to enhance the downtown infrastructure, a project supported by a $19.5 million federal grant. Work would include improvement of streets and sidewalks, replacement of underground utilities and rehabilitation of bridges and culverts. The project includes routing excess heat from Burgess BioPower through a system to melt and clear snow from streets and sidewalks in winter.

Since peaking in 2015 the number of biomass plants and the tonnage of biomass used have shrunk, according to data compiled by Charles Levesque of Innovative Natural Resource Solutions, LLC. In 2015, there were nine plants operating in New Hampshire together using 2.7 million tons of biomass, 30% of which was the 800,000 tons used by Burgess BioPower, easily the largest of the plants. Since then four plants have closed. Levesque said along with Burgess BioPower, four plants are operating, if sporadically, in Bridgewater, Springfield, Tamworth and Whitefield on the open market without subsidies.

Levesque’s data indicates that, from 1997 to 2006, about 1.3 million tons of biomass was consumed and by 2012 usage had reached 2 million tons. When Burgess BioPower began operating in 2013 usage began to climb and by 2016 peaked at near 3 million tons with the Berlin plant burning the largest share. Then, usage began a steady decline, dropping by a third to 2 million tons by 2018 and to little more than a million tons by 2022, with Burgess BioPower accounting for almost of it.

The dwindling demand for biomass has taken a toll on the forestry industry. Jason Stock, executive director of the NH Timberland Owners Association, likens managing timberland to gardening. He explained that to ensure space for healthy trees to grow, weak and diseased ones must be culled. But, as traditional markets for low-grade wood have shrunk — first the pulp and paper mills and lately the biomass power plants — so have the cost-effective means of managing healthy, sustainable forests.

Meanwhile, critics argue that biomass is not only an inefficient source of energy but also a source of greenhouse gas emissions — including CO2 — which compromise efforts to address climate change.

Weighing the competing interests and arguments led Vose to wonder “if Burgess BioPower may be a dinosaur whose time is about up.”