Would NH Senate bill allow costs of energy project construction to be passed to ratepayers?

Measure seeks to address PUC rejection of gas pipeline funding
Photo by Nancy West
Room 103 at the State House in Concord was too small for the crowd that turned out for a public hearing Tuesday on Senate Bill 128.

After this story was originally posted on Wednesday, there was some disagreement over whether Senate Bill 128 could in fact allow Northern Pass to pass on construction costs to consumers.

New Hampshire’s Consumer Advocate Donald Kreis told InDepthNH.org, “SB 128 doesn’t cover cost recovery for transmission projects.” But state Sen. Jeff Woodburn, D-Dalton, said he believes his comments were correct that SB 128, if passed, could allow Northern Pass to recoup construction costs from consumers.

Woodburn said he was briefed by two Democratic senators on the Senate Energy and Natural Resources Committee, Sen. Martha Fuller Clark and Sen. Dan Feltes. Woodburn said he checked back with Feltes to make sure he wasn’t mistaken.

“I stand by my interpretation. If there is no intention for ratepayer dollars to be used, there should be no reason not to clarify it. If someone shows me I’m incorrect, I am open to listening,” Woodburn said. “People choose to be clear and people choose to be unclear.”

On Wednesday night, Feltes said, “The bill as written would open the door for the PUC to consider approving any type of power purchase agreement, including for state-level approved construction costs.”

Sen. Jeb Bradley, R-Wolfeboro, vice chairman of the committee and the bill’s sponsor, disagreed.

“I don’t believe my legislation would allow the recovery of construction costs. Rather it allows the PUC to consider whether the purchase of power makes sense if it lowers rates, decreases price volatility and increases reliability.”

Bradley went on to say, “Those are the kinds of things the Public Utilities Commission would have to consider in approving any power purchase agreement.”

Sen. Kevin Avard, R-Nashua, chair of the Senate Energy and Natural Resources Committee, said because of the confusion surrounding the bill and concern that it could possibly benefit the Kinder Morgan pipeline, he is walking away from it, even though he is a co-sponsor.

“I’m backing off this bill. It was designed to lower rates. That was its primary function,” Avard said. “This bill is being hijacked. I can’t support it if it would allow Kinder Morgan to come through my district.”

Here is the original story:

There weren’t enough seats for the crowd that turned out for a public hearing Tuesday on a bill proposed by NH Sen. Jeb Bradley that would allow electric utilities to pass on the costs of new projects to consumers.

Senate Bill 128 is either the panacea that would finally lower New Hampshire’s high electric bills or it would set the state back 20 years, depending on who did the talking in crowded Room 103 at the State House for a hearing of the Senate Energy and Natural Resources Committee.

Sen. Jeff Woodburn, D-Dalton, said he opposed the bill because it would allow the Public Utilities Commission to consider whether Northern Pass could bill ratepayers for construction of the controversial 192-mile transmission line from Pittsburg to Deerfield.

Northern Pass has divided the North Country, Woodburn said.

“I respectfully request that the bill be retained … and not be in such a rush on this matter,” Woodburn said, adding that SB 128 is an overreach at a time when restraint is needed.

Wolfeboro Republican Bradley, the Senate majority leader, said that, “against the backdrop of higher electric rates … we have to consider a measure such as this if we are going to do something about retaining businesses.”

Bradley acknowledged that opponents of projects like the Kinder Morgan natural gas pipeline and Northern Pass were in the room, but insisted that the bill wouldn’t give an edge to any single project and no project was named in the bill.

He wrote the legislation, Bradley said, in response to the PUC decision to reject Eversource’s request to finance Spectra Energy’s Access Northeast natural gas pipeline with money from ratepayers.

‘An important tool’

Some people were upset because they couldn’t get into the hearing room because it was so crowded. An estimated 75 people attended.

Bill Duchano of Deerfield and Laura Lynch of Temple complained about not hearing what was going on.

“They locked out most of the opposition,” said Duchano, who has been critical of Northern Pass.

Lynch said she fought the Kinder Morgan pipeline proposal for two years. “We don’t want this to happen,” Lynch said of SB 128. “We already pay enough in taxes and pay enough in our rates.”

Attorney Doug Patch, former chairman of the PUC, was on hand to oppose the bill, representing the Retail Energy Supply Association.

“RESA believes it would result in a significant reversal of the current retail choices and cost savings benefits enjoyed by New Hampshire customers as a result of restructuring,” said Patch.

But Stephanie Lamb of the Business and Industry Association of New Hampshire, said high electricity rates are driving businesses out of New Hampshire and hindering new ones from coming in.

She said the BIA viewed the SB 128 “as an important tool for the PUC and utilities to work together to see what other opportunities are out there” to lower electric rates. “It’s factual that we are in a significant situation in the state. We don’t have the luxury to wait. We have to act now because our businesses are leaving.”

Sen. Martha Fuller Clark, D-Portsmouth, asked Lamb if she would provide the committee with data to show how many new businesses and startups there have been recently in New Hampshire.

Fuller Clark also asked Lamb if businesses were aware of other ways to cut electricity costs, such as implementing energy efficiencies and purchasing from other sources.

They were, Lamb said, adding, “It’s not enough.”

Fuller Clark said: “My concern is we are in a rapidly changing energy market.”

How can consumers be assured that long-term contracts “are not going to backfire as we begin to see more and more changes happening and end up with stranded costs in spite of the best intentions?” Fuller Clark said.

Although there was disagreement over exactly what the bill would do, SB 128’s analysis says:.

“This bill modifies electric utility restructuring policy principles by permitting electric utilities to pursue measures to mitigate the cost of electric service, reduce the price volatility of that service, and/or reduce the potential for disruptions in electricity supply, subject to the commission’s determination that such measures are in the public interest.” 

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