The decline and fall of North Country power plant bill

One of the most lobbied pieces of legislation this term – the oft-amended bill paving the way for Public Service of New Hampshire to build a North Country power plant — never came to a floor vote as expected last month. Why it didn’t speaks more about the legislative process than about the intents of the measure.

The measure, House Bill 1690, would have permitted PSNH to build a power plant in the Berlin area, which was hit hard economically with the closing last month of the Fraser Papers pulp mill. Under the bill, the utility would have been allowed to build a regulated power plant – ensuring a guaranteed rate of return on its investment — which under current law it cannot do.

PSNH had been seeking to build a 50-megawatt plant.

HB 1690 was killed on May 19, after Deputy House Speaker Mike O’Neil refused to sign a conference committee report that would have sent the measure to a vote by the Senate and House. O’Neil objected to a late, non-germane rider providing fuel assistance to the needy, but he pledged to back the same proposal as a new bill, which would have needed two-thirds support to be put before legislators for a vote.

The new bill never emerged – at least not one to O’Neil’s liking. He said that, in its last version, the proposal did nothing to help the North Country economy.

“I’m not introducing any legislation of any sort,” O’Neil said of his change of heart. “There’s not a need to do it. Public Service can participate through their subsidiaries.”

Under current law, PSNH can build another plant through an unregulated subsidiary. But spokesman Martin Murray said the company’s strategy has been to sell off such merchant facilities as unprofitable.

“We made that business decision months ago, and it’s recorded in the annual report,” he said. “We were seeking a change of statute to allow us to be build a regulated plant. I agree the final bill would not have changed one thing from the status quo.”

Not everyone has been critical of the demise of HB 1690.

Derek Amidon, president of Tamarack Energy, said the failure to pass the bill boosts his firm’s partnership with New Energy Capital to build or buy some wood-fired energy production in the same region.

“It will take us a good six months to look at all the issues and build a business model,” Amidon said.

He said he hoped the state will approve a program establishing renewable energy credits, such as those already in existence in other New England states. They give a wood plant, hydro facility, wind farm or other renewable energy plant an extra revenue stream by selling the credits.

Dan Reicher, president of New Energy, agreed the defeat of HB 1690 clears the way for an aggressive North Country project.

“Depending on how a renewable energy bill is written, it could be further impetus for a wood-fired power plant,” he said. Lawmakers scrapped an energy credits bill this spring but agreed to study the issue and hammer out a report in time for next term.

Tom Bessette, lobbyist for Constellation Energy, opposed HB 1690 because his company eats all the risk when it builds or buys a plant. He has his eyes on the four wood-fired power plants that currently sell to Public Service under long-term contracts that will lapse soon. Constellation might want to sign its own deals with those firms, which produce about 60 megawatts.

“We’d be interested in their energy, but also in the renewable credits they could accumulate under a favorable state energy policy,” Bessette said.

Amidon is watching a slowly maturing industry that might some day help New Hampshire loggers: making ethanol from wood.

“Cellulosic ethanol is still at an early stage of development,” he said. “But it will likely come to New Hampshire in the long term.”