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N.H. Veto Override Split Decision: Biomass Bill Becomes Law, Bill to Expand Net Metering Falls Short
N.H. Veto Override Split Decision: Biomass Bill Becomes Law, Bill to Expand Net Metering Falls Short

On Thursday September 13, the New Hampshire legislature overrode Governor Chris Sununu’s veto of SB 365, a bill that requires New Hampshire electric utilities to purchase power generated by in-state biomass (wood) power plants and waste-to-energy plants up to 25 megawatts (MW) in size at eighty percent of the default energy service rate for three years, but failed to override the Governor’s veto of SB 446, a bill that would have raised the maximum size of a net metering project in New Hampshire from 1 to 5 MW.

The Governor had vetoed both bills in June on the grounds that they imposed unnecessary costs on New Hampshire ratepayers.  The Senate voted to override each veto by a 21-3 margin.  The House then voted to override the veto of SB 365 by a vote of 226-113, barely meeting the necessary two-thirds threshold, and fell short of the two-thirds vote needed to override the veto of SB 446, 213-128.

There are six wood-fired power plants in New Hampshire less than 25 MW, most of which have operated since the 1980s and are important to their local economies.  For fuel, these plants rely on networks of local loggers to supply wood chips.  The wood chips are a product of logging and forest management operations. Wood that is not suitable for lumber (tree tops, branches, small trunks) is sent to the biomass plants.  Biomass is in most cases carbon-neutral or nearly so (methane emissions avoided by removing dead tree remains from the forest offset plant CO2 emissions) and is critical to sustainable forestry practices.  For this reason, the Society for the Protection of New Hampshire Forests supported SB 365.

Responding to the Governor’s veto, the operators of three New Hampshire biomass plants announced plans to stop wood fuel purchases immediately and shut down in the near future if the veto was not overturned.  Many associated with the timber industry and the biomass energy industry made the case to the legislature that SB 365 was a job-saver and generated significant economic activity that benefited the state.

The inclusion of waste-to-energy in SB 365 sparked opposition to the bill in some quarters.  One waste-to-energy plant, the Wheelabrator plant in Concord, currently operates in the state.  Another, in Claremont, stopped operating a few years ago.

SB 446 would have provided a needed boost for solar energy, hydroelectric and other renewable energy projects between 1 and 5 MW in the state.  Projects between 1 and 5 MW would have qualified for net metering at the utility’s default energy service rate through 2030.  Such projects could supply renewable power at a cost savings to large customers such as municipalities, educational institutions and large companies, or to smaller customers via group net metering (New Hampshire’s version of community solar).  Several New Hampshire municipalities exploring solar projects larger than 1 MW on their closed landfills were planning to utilize net metering on those projects if SB 446 had passed and are now expected to downsize or defer these projects.  Opponents argued that net metering is an opportunity designed for smaller renewable energy projects, not projects sized between 1 and 5 MW.

Solar energy development in New Hampshire has been modest as compared to neighboring states like Massachusetts and Vermont, mainly because New Hampshire’s solar incentive policies are far less robust. Nearly all operating solar projects in New Hampshire are less than 1 MW in order to qualify for the New Hampshire net metering program.  Solar companies have begun to develop large solar projects (mostly 10 MW and above) in New Hampshire, with the intention of exporting their power to Massachusetts because large solar commands a higher price and can receive a long-term contract (critical to financing a solar project) there. SB 446 represented a chance to create a market for solar projects larger than 1 MW in New Hampshire for the benefit of in-state customers.

Advocates for expanded net metering in New Hampshire announced that they will renew efforts to pass a bill to expand net metering in 2019.

Links:

SB 365, relative to the use of renewable generation to provide fuel diversity. [Docket]

SB 446, relative to net energy metering limits for customer-generators. [Docket]

Chuck Willing is a shareholder of the firm and a member of the firm’s Energy Practice group, specializing in the purchase, sale and financing of renewable energy projects. He can be contacted at (603) 410-4346 or at cgw@rathlaw.com.

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