The New Hampshire House’s passage of a renewable energy bill April 5 might spur even more wood-fired power plant projects, such as Public Service of New Hampshire’s 50-megawatt facility at Schiller Station in Portsmouth and several projects recently proposed in the North Country.
One of those North Country projects involves Laidlaw Ecopower, which hopes to buy the mothballed 11-story boiler in the former Fraser Papers mill in Berlin and construct a 50-megawatt wood-chip-burning power plant around it. The other, proposed by North Country Renewable Energy, involves plans for a similar renewable energy park in Northumberland that would make ethanol from wood chips and operate a biomass power plant in the 45- to 75-megawatt range.
The incentives in House Bill 873, the bill passed by the House, also could render the existing small biomass electricity generators in Bridgewater, Tamworth and Whitefield more viable and lead to the reopening of mothballed facilities like the former Timco plant in Barnstead. Landfill-gas burners might gain as well, as would help dozens of small hydroelectric dams sited all across the state.
Under the measure, all of these plants stand to receive valuable renewable energy certificates for their existing production and could sell these to boost revenue. The price for certificates would vary with supply and demand in a market brokered by ISO New England.
The legislation lets unregulated companies that produce hydro, wind, solar, wood, wave, tidal, landfill gas and geothermal energy earn and sell these “certs,” as they’re known in the trade. The New Hampshire bill, modeled on ones in every other New England state, would require utilities like Unitil and PSNH to retail up to 25 percent of their electricity from renewable power by the year 2025.
Currently much of their electricity comes from coal and oil. They would have to buy certs to meet the gradually increasing quotas in the bill.
The New Hampshire Senate had earlier all but killed a competing bill to let the regulated PSNH build one or more wood-fired plants of its own with a statutory 9.6 percent return on investment. The company was hoping to avoid buying renewable power from others. Any new plants would also increase the scale of investment the company could take its regulated return on.
Senate Bill 140 would have let PSNH recover its construction costs for new wood-fired facilities by charging residential customers for the investment.
The state’s current energy deregulation law bars PSNH from building any new plants that pass their cost automatically to ratepayers. But it can still replace an old boiler with the same output of new power.
An amendment to SB 140 added by Senate Energy Committee Chair Martha Fuller Clark, D-Portsmouth, radically changed the PSNH bill, which was scheduled to go to the senate floor on April 12. If her version wins out, it would spur the construction of more electricity transmission lines, especially up north. It also would require the Public Utilities Commission to write new rules governing renewable energy construction projects.
Clark’s SB 140 rider would do little to help PSNH build any new plants in the Berlin and Groveton region, where loggers and former paper mill workers are hard-hit by unemployment from the loss of two mills last year.
If those people get relief, it must come from the new and unregulated players like Laidlaw and North Country Renewable. To justify the risk to investors, these merchant plants or wholesalers typically seek an annual 25 to 35 percent return on capital investment.
Rep. Robert Theberge, D-Berlin, who co-sponsored SB 140, said the unamended bill would have leveled the playing field for PSNH, which operates 1,150 megawatts of power plants and dams. It buys another 500 or so megawatts from other suppliers and from the daily spot market for electricity.
“It’s unfair to pit regulated utilities against unregulated utilities,” Theberge said.
Theberge expressed mixed feelings about the Laidlaw project because he wasn’t sure how adaptable the existing paper mill equipment might be to the new use.
“I know the news it was going forward was premature,” Theberge said. “I think they have a couple more months of negotiations to go (with the current owner, North American Dismantling). I’m more comfortable about the one in Northumberland. It’s further along.”
Berlin Mayor Bob Danderson said he’s amused by the way lawmakers promise to help Berlin and then don’t provide that help.
HB 1690, a bill similar to SB 140 that emerged last year, died in a committee of conference after former Deputy House Speaker Mike O’Neil refused to sign off on it and, at the 11th hour, the Senate tacked on a non-germane fuel assistance bill.
“If PSNH can’t build here, the new independents will get to charge inflated costs,” Danderson said. “They can hold back their energy until the spot market price goes high enough. Ultimately, the Public Service and Unitil ratepayers will have to pay more. I hope Senator Clark knows that will affect customers in her district.”
PSNH spokesman Martin Murray said the company might have saved its customers a lot of money by earning certs instead of buying them to comply with the proposed renewable energy law.
“We’re disappointed the committee chairwoman (Clark) stripped out the elements of the bill we talked about in two public hearings,” Murray said. “It wasn’t just Public Service that needed the bill to build renewable plants. Unitil could have used it too. Those new plants being developed up north will bring absolutely no benefit to our customers.”
But Murray said Public Service supports the renewable energy bill because the company would gain more choice in how it uses the certs it already sells in Massachusetts from Schiller Station.
Senator Clark said the three wood-fired projects in Coos County and a proposed wind farm near them in Errol would ease the jobs crisis in the region without helping PSNH expand its regulated capacity.
“We need to give the deregulated market a chance to work,” Clark said. “A year ago we had no power projects in the pipeline up there. The amended SB 140 asks PSNH to work with the Public Utilities Commission and Federal Energy Regulatory Commission to expand our transmission infrastructure. It can only handle one additional plant up north.”
By Chris Dornin
Golden Dome News
13 April 2007
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