House easily passes biomass industry-backed energy bill

Measure goes to Senate as BIA urges governor to veto it

The NH House has overwhelmingly passed Senate Bill 129, a bill that boosts the wood and solar industry, but could also raise electric bills.

The bill, which was approved a 222-84 vote on June 1, has pitted the Business and Industry Association of New Hampshire against other business groups, such as the NH Clean Tech Council and the NH Timberland Owners Association.

The fight is far from over yet. The Senate still has to approve of House changes to the bill – which could happen on Thursday – or the measure could go to a committee of conference. And whatever emerges still could face a gubernatorial veto, if the BIA has its way.

SB 129 tinkers with the state’s renewable energy standards, which require that utilities gradually increase the percentage of renewable sources of energy in their portfolio to 25 percent by 2025, or go out and pay into the Renewable Energy Fund, which the state uses to subsidize the renewable energy industry.

First, SB 129 would mandate that 15 percent of the REF be dedicated to low-income solar projects, in answer to the criticism that solar energy primarily benefits the wealthy.

Second, it increases the percentage required from solar sources from 0.3 percent to 0.7 percent by 2025. However, since solar is quickly growing on its own as the price of solar panels and installations fall, this isn’t the most controversial part of the bill.

No, that comes from increasing the amount that utilities would have to pay for biofuel-generated energy, which could means millions of dollars more for wood-burning plants, which are increasingly becoming the only local customers for wood chips due to the demise of the paper industry.

How much would this would cost ratepayers depends on who you talk to. One Public Utilities Commission estimate said it could cost $100 million, but at an earlier hearing, another official put the number at $75 million, which would amount to about an additional 60 cents on an average residential customer’s bill, or about $600 a month for a large industrial user.

That is the worst-case scenario, but opponents of the bill claim that that is the scenario that is likely to occur in the future.

In any case, this is a small price to pay to preserve hundreds of jobs in the wood industry, which has been lobbying hard for the bill, and encourage the creation of jobs in the solar industry, testified Sen. Jeb Bradley, R-Wolfeboro, the bill’s prime sponsor and the Senate majority leader.

But the BIA worries that the bill might result in a loss of jobs in the manufacturing industry, already frustrated by the high cost of electricity in New Hampshire.

“When the state mandates the purchase of a certain kind of energy, like biomass, at an over-market rate, they're not making the cost per kilowatt-hour go down. It will go up. This is exactly the opposite of what's needed to keep manufacturers and other large energy users growing in New Hampshire. Manufacturing alone employs 68,000 people in the state and drives our economy in ways no other sector does,” wrote BIA President Jim Roche in a recent op ed piece.

Competitive suppliers are also opposing the bill because it doesn’t grandfather some of the changes, meaning that those locked into long-term contracts with their customers thinking they will be getting electricity at one price, may now have to buy it at a higher price, swallowing the difference.

The BIA is urging the governor to veto the bill should it reach his desk.