NH House panel passes a new fix to net metering bill

Amendment would protect state utility tax revenues

A bill on the brink of passage that would open up net metering to larger businesses and public entities nearly foundered Tuesday after some unforeseen tax consequences were raised.

In the end, the House Science, Technology and Energy Committee recommended an amendment to fix the bill, but as a result it could end up hurting some municipal solar projects it was designed to help.

Senate Bill 446, which would increase the net-metering cap from one megawatt to five megawatts, was on the House’s consent calendar last week. That meant that it was grouped with other non-controversial bills to be voted on all at once.

The bill had once been controversial, since it originally would have allowed wood-burning generators to take advantage of net metering as well.

The committee earlier unanimously agreed on an amendment that would have cut out wood burners from SB 446 and instead voted to subsidize them in two other bills. But SB 446 is still a big change because it would allow businesses and municipalities to build more net metering projects than before, and larger ones than neighboring states allow.

In addition, the bill would allow smaller generators such as hydro plants to use net metering, giving them a better rate.

Tax consequences

But last week, in an unusual move, the bill was pulled off the consent calendar and sent back to committee to give it a chance to hold a public hearing on a floor amendment – an unusual move.

The amendment, sponsored by Rep. Michael Harrington, R-Strafford, would have paid those producing over one megawatt the wholesale rate, a lot less than the default rate that they would get under net metering.

Any facility over one megawatt is a generator, said Harrington, a former member of the NH Public Utilities Commission, and “if you act like a generator you get paid like a generator.”

Supporters came out in force to urge committee members to reject the amendment, arguing that it would defeat the purpose of the bill, which was to promote renewable energy and to allow larger businesses and municipalities to save money by generating their own power.

But those supporters were greeted with another problem: The bill inadvertently would exempt the hydro plants from paying a utility tax, which would mean the state would lose at least $850,000 in revenue. That would result in the bill going to the House Finance Committee, which at this late date would likely kill it.

Rep. Michael Vose, R-Epping, proposed an amendment that would have kept the tax in place. Hydro plant owners had no problem with that.

But the amendment also could possibly extend the utility tax to third parties who were servicing municipalities, diverting money that would have gone to towns and school districts to the state, testified Andrew Keller, of New England Solar Gardens, who testified that it would affect eight out of 10 of his projects, costing his clients about $1.3 million.

Representatives from several towns and cities echoed those concerns but most were confident that lawmakers would fix the tax problem, and ask that the bill go forward.

“Do not put this in to interim study,” urged Julia Griffin, town manager of Hanover, who hoped to use the new law to put together a five-megawatt solar project with Dartmouth College.

In the end, the committee recommended passage of the bill with the tax fix, 19-1.

“Overall it is good that the committee rejected Harrington’s amendment and voted again to help businesses and towns lower rate,” said Kate Epsen, executive director of the NH Sustainable Energy Association.

By the same vote, the committee passed an amended version of SB 577, which would continue for three years Eversource’s subsidy rate to the Burgess BioPower plant in Berlin. (The Senate version would have urged the PUC to consider it.)

And at deadline, it was on the verge of recommending passage of SB 365, which would have offered a subsidized rate for six smaller biomass plants that face risk of passage. Both bills might face a floor fight in the full House next week.