Renewable energy fund reaps a windfall for '13

This year, fewer than 100 homeowners will receive a 30 percent rebate on their purchase of a wood pellet furnace.

Next year it could be a lot more, if the Legislature leaves the state's Renewable Energy Fund law alone. Or lawmakers could amend the law and grab the nearly more than $13 million now in the Renewable Energy Fund to help balance the state's budget.

In 2012, the fund contained $2.3 million, but next year it's expected to grow substantially, and the Legislature approved spending about $5.6 million in 2013.

But the fund got even more than expected — $19.1 million, and with some remaining from 2012, the fund's size is nearly 10 times the amount spent in 2012 and at least $13 million more than anticipated.

But nobody is counting on this money quite yet.

The Legislature has raided designated funds to fill in general fund budget gaps before, most notably the Regional Greenhouse Gas Initiative. Like the Renewable Energy Fund, the RGGI money did not come from the general fund. It comes from power generators that buy allowances at quarterly auctions. The allowances essentially give them permission to emit a certain amount of greenhouse gases (primarily carbon) into the atmosphere.

In 2011, lawmakers took about $3.1 million from RGGI to balance the budget. Last year, they took the program away from Public Utilities Commission oversight, and the money was returned to utilities for conservation and toward a ratepayer rebate.

At the time, Republican lawmakers complained that the PUC was picking winners and losers and wanted to do away with RGGI altogether, despite the support of some business groups — like the Retail Merchants Association of New Hampshire — that benefited from the RGGI conservation fund.

Democratic Gov. John Lynch wound up vetoing an outright repeal of RGGI

Biomass energy demand

The Renewable Energy Fund is slightly different. Its money comes from fees paid by utilities that don't meet the state's renewable portfolio standard, which requires that almost a quarter of the energy generated in New Hampshire must come from renewable sources by 2025. Utilities that don't meet certain benchmarks must pay into the Renewable Energy Fund.

In 2011 (on which the funding for fiscal year 2013 is based), the benchmark rose more than 2 percent, to 9.6 percent of all power generated.

That includes a 2 percent requirement for "new" renewables (from plants built after 2006) and a 6.5 percent requirement for "old" renewables (primarily from biomass plants built before 2006). The hydro energy requirement is 1 percent.

It is the demand for biomass power in other states with renewable portfolio standards that is the main reason behind the surplus.

That demand, particularly in Connecticut, makes it harder for utilities to meet the 2011 standards in New Hampshire, where utilities are penalized $30.46 per megawatt hour.

Money from the Renewable Energy Fund, administered by the PUC, is used for commercial, industrial and residential renewable energy projects.

Of the $5.6 million the fund is authorized to spend next year, the biggest chunk ($2.5 million) would go to a competitive grant program for commercial and industrial projects. Some $1 million would be dedicated as home solar and wind rebates, while the remainder would be spent on rebates for thermal projects — solar hot water and wood pellet furnaces.

What becomes of the remaining $13 million is an open question.

"The law says it's a non-lapsing dedicated fund, and it would enable us to significantly expand our program offerings," said Jack Ruderman, director of the PUC's Sustainable Energy Division. "But of course, we are planning for both contingencies" – a much larger amount of money to dispense or a decision by the Legislature to do something else with the funds.

Developing a plan to spend 10 times more than was spent in the previous year takes time, said Ruderman, so any request to the Legislative Fiscal Committee won't be submitted until next year — a year when the Democrats just won back control of the House and Republicans in the Senate hold a bare majority.

As NHBR went to press, organization of the Legislature for 2013 was just under way, and attempts to contact House and Senate leadership were unsuccessful.

Categories: Energy and Environment