Why the governor’s energy vetoes must be overridden

His actions on SB 446 and SB 365 were simply wrong on the merits and wrong on the facts

Fact: On June 19, 2018 Gov. Sununu vetoed Senate Bill 446 and Senate Bill 365, two energy measures crafted to 1) expand self-generation for larger businesses and municipalities in New Hampshire and 2) to keep existing biomass-fueled power plants operating in New Hampshire. Both passed the NH House and NH Senate with strong bipartisan support.

Fact: On March 19, 2018, Gov. Sununu sent a letter to Senate President Chuck Morse and Senate Majority Leader Jeb Bradley, prior to the initial hearing of the bill in the Senate, stating that if they passed SB 365, he would veto it. 

Fact: Throughout the entire process of hearings in the House and Senate for SB 446, neither the governor nor his staff nor the NH Office of Strategic Initiatives would make any comment on the bill, other than it was being “monitored.”

Fact: On June 13, 2018, 16 state senators signed and delivered a letter to Governor Sununu, in a bipartisan way, and urged him to sign both bills.

Neither one of these bills passed the Legislature without first undergoing major changes from their original filings.

In the end, SB 446 excluded any participation from plants larger than 5MW, which then excluded all existing biomass and trash-to-energy plants in New Hampshire. In the end, SB 365 eliminated all other existing plants not powered by biomass or trash, and the bill now sunsets after three years without further legislative action. Both bills were thoroughly vetted and received large bipartisan approval in both legislative branches.

SB 446 was not without its controversy, as twice Rep. Michael Harrington (a board member of, and consultant to, the New England Ratepayers Association) attempted to amend the bill on the House floor to lower the compensation rates for energy placed on the local distribution company's system to “wholesale” power rates (which are ISO-New England rates). Other powerful people, like former Speaker Bill O'Brien (a registered lobbyist for Edison Electric Institute) and Grover Norquist (president of Americans for Tax Reform), weighed in at the House to support Harrington's amendment, but not a public word from the Governor's office. In the end, the Harrington amendment was wisely defeated, and the final bill passed on a voice vote.

There is quite a bit of history in New Hampshire surrounding NERA's attempts to see net metering rates (used in SB 446) set to “wholesale rates.”

During the 2017 NH Public Utilities Commission hearings on the resetting of net metering rates, Harrington and Michael Sununu (a Newfields selectman), both representing NERA, tag-teamed to testify and advocate for “wholesale rates.”

Marc Brown, NERA's executive director from Newfields, has testified and written extensively for several years advocating for “wholesale rates” for net metering projects, and in support of Northern Pass and new gas pipelines. 

As early as April 5, 2015, Dave Solomon penned a story in the NH Union Leader titled, “Lawmakers want to know who is financing NERA.” As a 501(c)(4) organization, NERA has no legal responsibility to reveal its funding sources or disclose its “members.” However, it has been speculated by many for years that NERA is actually funded by investor-owned utility interests, based on the timing of its creation in 2013, just prior to the Northern Pass route release, and their clearly slanted advocacy efforts against renewables and for transmission lines and pipelines.

Governor Sununu's vetoes were simply wrong on the merits and wrong on the facts. His written statement that SB 446 “would cost ratepayers at least $5 to $10 million annually” is without factual evidence and was not estimated by any state agency. SB 446, championed by prime sponsor Sen. Kevin Avard, will in fact save money for ratepayers and taxpayers, and there are no subsidies or cost-shifting.

Under SB 446, the investments in self-generation projects will provide additional power, keep our energy dollars in the state, drive economic activity, support jobs and increase state and local business tax and property tax revenues.

His assertion that SB 365, which pegs biomass-powered supply payment rates at only 80 percent of default service supply rates, “would cost ratepayers approximately $25 million a year for the next three years,” overstates the numbers that the Legislative Budget Assistant estimated of “$15 million to $20 million a year for Eversource and $2.7 million for Unitil,” which in itself completely ignored millions in offsetting costs as testified by experts during the Senate hearing.

Expert testimony concluded that if New Hampshire lost 100 MW of biomass power, the state’s ratepayers would be responsible for approximately $17 million in additional regional capacity costs – annually and forever.

And the governor erroneously wrote that “Senate Bill 365 doesn't even guarantee solvency of these facilities” and “those who supply the wood product have confirmed that the maximum impact to their revenue would be a mere 3.5 percent.”

The industry and suppliers have stated publicly that SB 365 makes them viable to continue operation. What is also ignored by the veto is the annual economic impact of the biomass plants, which was the subject of an economic study by Plymouth State University in 2016. The plants support over $250 million in annual economic activity statewide and over 900 jobs. They also pay state taxes, local property taxes, air permit fees, etc.

Finally, the energy policy in SB 365 is critical to New Hampshire’s natural resource policies promoting and protecting healthy and sustainable forests. These economic benefits far outweigh the real three-year cost of SB 365. These vetoes are especially unfortunate, coming after the recent designation of his “long-time friend and confidant” and co-chair of his transition team, Jamie Burnett, as a registered lobbyist for Eversource – a company that strongly opposes these bills and has a history (aka Northern Pass) of providing less-than-accurate information to support its own energy agenda.

How did we come to such an impasse? I believe the governor was ill-informed prior to making his decision to veto these important bills that would have done much to stabilize the New Hampshire economy, offer larger businesses and municipalities the opportunity to save money on energy, and economically support the very important North Country, the heart of our recreational and tourism industry. However, we are all capable of making bad decisions using bad information, so I will give him a pass on these bills. 

Unfortunately, the governor can’t later decide to reverse his own vetoes. The Legislature worked hard on these bills. Therefore, our legislators will need to overlook “politics” in an election year and simply vote to override the vetoes in September. I especially urge my conservative Republican colleagues in the House to move past their prior amendment battles and to get on board and vote for these bills.

Harold Turner, a business owner who lives and works in Concord, is also a board member of the Granite Institute, a 501(c)(3) registered economic think tank based in New Hampshire. 

Categories: Opinion