Americans for Prosperity Foundation: NH should dump energy-efficiency efforts

Organization’s new report backs nuclear, coal and Northern Pass

A new report from Americans for Prosperity Foundation-NH calls for scrapping the state’s renewable portfolio standards, or expanding them to include nuclear power and low-carbon coal, cutting or eliminating energy-efficiency programs and building the Northern Pass.

The reforms, the report argues, would lower the cost of the state’s electricity rates, which are the fifth highest in the nation.

“These high electricity prices also deter investment and slow economic growth, making the region less attractive for businesses to start,” according to the report, “Practical Reforms to Provide Affordable Energy in New Hampshire, which was released Monday. “This dims the state’s economic outlook and makes New Hampshire an unfriendly business environment.”

But advocates for renewable energy challenged the reports data and its sources.

“This report is just another cut-and-paste iteration of the Koch-funded work this group has done all around the country. It isn't accurate or helpful to New Hampshire,” said Kate Epsen, executive director of the NH Sustainable Energy Association.

AFP receives much of its funding from Koch family foundations, which in turn are funded in large part by Koch Industries, a major large provider of fossil fuels. Both the renewable portfolio standard and the state’s energy-efficiency programs’ major goal is to cut the state’s reliance on fossil fuels.

‘Hurting the economy’

While the report does back the state’s decision preventing electric ratepayers for paying for gas pipelines, its first target is the renewable portfolio standard, or RPS, which require utilities serving the state to obtain 25 percent of their energy from renewable sources by 2025. If the utilities don’t meet the goals, they must purchase renewable energy credits, or RECs, or pay a penalty.

The report declares, “New Hampshire’s RPS hurts its economy,” quoting a study from Beacon Hill Institute that estimates the total cost of New Hampshire’s RPS at $704 million from 2015 to 2025.

The Koch Foundation lists Beacon Hill Institute, a free-market think tank that questions most of the current research on climate change, as a partner. The institute had previously been affiliated with Suffolk University but is no longer after a dispute over where it accepts its funding.

When asked about the estimate and its source, Josh T. Smith, principal investigator of the report, said that even if the estimate was an “outlier, it’s far from being alone in its (RPS) economic estimations.”

He noted that the report also provided two other sources, a 2017 paper by two researchers from Louisiana State University, which was based on a study of the experience of states that implemented an RPS and control states. That report estimates that RPS “is associated with” increasing prices by about 11 percent, but would lower demand by as much as 7 percent.

The other source is by Carolyn Fischer of the International Association of Energy Economics, which indicates that studies differ on the effect of RPS on prices, with several indicating that they actually reduce costs. Her study shows that prices go down at first, but increase substantially as the standards get more stringent. But Fischer said there are a host of other factors that could change all that, especially a demand reduction, possibly caused by increased energy efficiency.

“Thus the effect on effective stringency for the RPS is not entirely clear,” she said

Northern Pass

However, the AFPF-NH report doesn’t favor increasing energy-efficiency programs, since it says that they also increase prices.

“These are expensive policies,” the AFPF-NH report asserts, adding that, in terms of renewable reforms, “the first and most obvious is to remove RPS entirely.” But the report also lists some secondary reforms: changing the RPS from a mandate to a voluntarily goal, rebating all the funds to ratepayers, grouping all renewables into one goal, rather than have certain targets for certain technologies, and including nuclear energy, “carbon capture technology paired with coal factories” and Canadian hydro as part of a low-carbon mix.

In fact, in a separate section, the report highly recommends the construction of the Northern Pass project, to bring in hydropower from Quebec to the region.

The report doesn’t mention other proposals to bring Canadian hydro to New England via other states, or a similarly sized project to bring Canadian wind power through New Hampshire.

According to the report, Massachusetts and Connecticut, both of which have more stringent regulations than New Hampshire, have higher electricity costs, but it also shows that Vermont, which is also far more stringent than New Hampshire, has lower costs. When asked about this, Smith replied that the very stringent policies in the surrounding states are increasing New Hampshire’s costs.

“You can't divorce a single state from others that fall under the same regional regulatory regime, since the nature of the electricity grid is inherently interconnected,” said Smith.