PSNH, others await North Country power vote

Competitors are lining up to challenge Public Service of New Hampshire in a possible state-refereed bidding war to offer 50 megawatts of wood-fired electricity in Coos County.

A management team from Hanover-based New Energy Capital has made several scouting trips to the area.

Dan Reicher, New Energy president, former U.S. assistant secretary of energy in the Clinton administration, said his people have the expertise, funding capacity and vision to earn a piece of the New Hampshire market.

“We’ve looked at Berlin and other sites,” Reicher said. “We’ve also met with the governor and Senate president (Ted) Gatsas to let them know of our interest in North Country projects.”

Reicher said his firm wants “a level playing field with an RFP process. I’m pleased to hear that’s now a live possibility.”

The Senate Finance Committee votes Tuesday on an amendment to let Public Service, New Energy and the state’s five remaining small wood-fired power plants submit requests to supply the 50 megawatts of power.

“PSNH would have an advantage over us if the law made them the only one who can proceed,” Reicher said. He’s looking to build a plant or buy and renovate an existing one.

“If a nearby user could take our surplus heat or steam, that would be plus,” Reicher said.

Four of the wood-fired plants, which sell a combined 80 megawatts of power to PSNH, view an RFP process as their chance to survive after they lose their favorable long-term contracts with PSNH. Attorney Bob Olson represents Pinetree Power in Bethlehem, Pinetree Power-Tamworth, Bridgewater Power Company and Hemphill Power and Light in Springfield, which will stop supplying PSNH by the end of 2007.

They burn 1.2 million tons of wood a year among them. Those facilities will soon compete in the merchant energy market, selling into the daily spot market.

Olson was pleased a senate amendment might let his clients and any newcomers get into the bidding.

He represented the AES Corp. a few years ago when it sold off its 16-megawatt wood plant in Whitefield. That independent facility was the first to lose its PSNH contract, but it survives by selling out-of-state renewable energy credits as a second revenue stream.

“The bidding process gives them all a fair chance to stay in business,” Olson said.

Similar wood plants in Alexandria, Hopkinton and Barnstead have closed since losing their supplier deals with PSNH. Olson was sorry lawmakers voted recently to delay for at least a year an ambitious plan to let producers earn New Hampshire renewable energy credits. Maine, Connecticut, Massachusetts and Rhode Island have such systems in place.

Ian Wilson, PSNH communications director, said a proposed $150 million plant located somewhere in Coos County would use 450,000 tons of wood a year. He welcomed a competition to tap a supply big enough for three plants that size.

“Do the math,” he said. “It’s enough to soak up 120 megawatts.”

The firm’s 50-megawatt wood plant in Portsmouth is nearly finished.
“We know biomass now,” Wilson said. “Count us in. There is urgency to this. There are dozens of businesses and hundreds of jobs associated with bringing those wood chips to market. Those won’t be there if we delay.”

New Energy has found its niche in backing projects too small for the major energy and fuel companies to jump into, Reicher said.

His firm bought a 16-megawatt wood-fired plant last fall in Greenville, Maine, and is spending $12 million to clean its emissions and add a megawatt of output. Those changes will qualify the plant to sell out-of-state renewable energy credits to coal and oil-burning power companies.

Three weeks ago, the Hanover-based firm made a major investment with some partner companies to build a $142 million ethanol plant in Indiana and make 110 million gallons a year from corn. The move exploits the new federal energy bill, which calls for replacing MTBE with ethanol as a gasoline additive.

In two years, New Energy has helped plan and finance ethanol, solar and wood-burning facilities in Massachusetts, Michigan, Delaware, New Mexico and California. – CHRIS DORNIN/GOLDEN DOME NEWS