Rules, infrastructure needs pose big hurdle to North Country power projects 

The lack of necessary infrastructure means that Coos County won’t see ground-breaking anytime soon on hundreds of megawatts generated by proposed wind farms and wood-fired power plants.

According to Public Service of New Hampshire officials, the utility’s big loop of transmission lines from Littleton to Berlin and back can handle only 100 megawatts more of production before somebody has to pay big bucks to boost the capacity.

Nobody knows who will fund that infrastructure, and the uncertainty has thrown off the financing for some of the dozen New Hampshire power plants lined up for future review by the state Public Utilities Commission.

Joshua Levine, project developer for Tamarack Energy, said his work on a 45- to 75-megawatt power plant in Groveton is in limbo because of the limited infrastructure. He had hoped to submit an application to the Energy Facilities Site Evaluation Committee by the end of summer, but now he’s not sure when that will happen.

“Our transmission upgrades could cost $2 million or $60 million,” he said.

Farrell Seiler, chairman of the New Hampshire Wind Energy Association, said nothing will develop in the wind sector of the market until some huge barriers are removed.
“Nobody will have the transmission capacity,” he said. “All those projects will die on the vine.”

Stakeholders left a packed State House energy forum Wednesday in general agreement that state, regional and federal regulations for electric generation must change. Otherwise regulatory snags could derail plans for three wind farms totaling 280 megawatts in Coos County, three biomass power plants, nearby with a combined 138 megawatts, and a six-megawatt landfill gas power plant. Several projects in the Upper Valley are at risk for the same reason.

In a policy left from the days of monopoly utilities, the regulatory agencies handle each project on a first-come, first-served basis, and the suppliers have to build their own power lines if more are needed. That’s fine for the first 100 megawatts of new North Country projects. They can soak up the existing capacity. As Levine fears, the rest of the players in line might have to pay heavily just to get their product out to the rest of New England.

State Sen. Martha Fuller Clark, D-Portsmouth, chair of the Senate Energy, Environment and Economic Development Committee, called for regulations and laws that work to benefit the people.

“The process is messy and contradictory,” she said. “You’ve created this forward capacity market without dealing with the transmission problems.”

She referred to a policy in which the federal government pays New Hampshire power plants alone roughly $100 million a year combined to make sure they stay in business as a hedge against brownouts. Early next year, ISO-New England will auction off these coveted forward-capacity market slots to the lowest bidders, making all power plants compete for any share of the incentives. Some call these bonuses customer-funded subsidies, because ratepayers foot the final cost of the federal incentive.

Under a new law, the state Public Utilities Commission is working on a Dec. 1 report to suggest how to site the new renewable energy plants and build their power lines. According to PUC commissioner Clifton Below, his group could recommend state legislation and changes to the regional rules to achieve those goals.

ISO-New England has been holding forums in the six states it administers to make sure the region produces at least 8,000 more megawatts within the next 10 to 15 years.

By Chris Dornin
Golden Dome News

New Hampshire Business Review

30 August 2007