New Hampshire biomass industry pushes for veto override

Much is on the line for New Hampshire’s biomass industry when state legislators reconvene in mid-September, and consider an override of SB 365.

Gov. Chris Sununu vetoed the bill in June, though he signed a similar, separate measure for Burgess Biopower in Berlin, New Hampshire. SB 365 would continue subsidies to six of the state’s independent biomass power plants, via mandated, three-year contracts with electric utilities. Sununu also vetoed SB 446, which would raise the cap on New Hampshire’s renewable net metering program. Avocates say it would allow municipalities and businesses expand or install new renewable energy projects to reduce energy costs, and become more energy self-sufficient.

While Sununu said his decision was focused on protecting ratepayers from new expenditures totaling $75 million over the three-year period, supporters of SB 365 believe the veto will have severe economic consequences, particularly on the state’s forestry industry. They also question the accuracy of the estimated cost impacts to rate payers cited by the governor, and assert that the shutdown of the state’s biomass plants will actually have much greater costs, which will be compounded by many unintended consequences and ripple effects.

Already, several of the biomass power plants have wound down operations for the time being, including plants in Alexandria, Bethlehem and Tamworth, and others have stated they will likely be forced to follow suit.

Mayors from the state’s 13 cities have signed a letter urging legislative leaders to overturn the veto, and state organizations representing forest-based businesses and stakeholders have been staunchly lobbying for an override. Jasen Stock, executive director of the New Hampshire Timberland Owners Association, released statements emphasizing the misinformation in the governor’s veto message. “If one is going to veto a bill affecting N.H. families and eliminating N.H. jobs, at least do it with an accurate understanding of the bill and the industry affected,” he said. “For example, the veto message concludes that SB 365 does not guarantee solvency of the biomass plants based on what a landowner receives for wood harvest income. It completely misses the fact that the power plant revenue comes from the sale of power—it has nothing to do with the landowner revenue. And to veto a bill in the name of economic prosperity, at least acknowledge the economic contributions timberland owners, the forest products industry, and small-scale renewable power projects make to the state.”

The NHTOA and other groups have highlighted these contributions, pointing to a 2016 Plymouth State University economic study that concluded the six independent biomass power plants covered in Senate Bill 365 support 931 jobs and produce $254.5 million in annual economic activity. These biomass power plants consume more than 40 percent of all the low-grade timber harvested each year in New Hampshire, according to the NHTOA, “and the low-grade markets these power plants support underpin the state’s forest products and sustainable forestry economy.”  

In an open letter published in the Laconia Daily Sun, Republican Sen. Bob Giuda,  a cosponsor of both SB 365 and SB 446,  said the Public Utilities Commission estimates the cost of SB 365 to be about $18.7 million per year, which averages out to about an extra $1.78 each year to Eversource residential ratepayers. “And the claimed ‘savings’ by vetoing SB-365 for the three-year term of SB-365 is almost totally wiped out by the $17 million increased cost for out-of-state producers to replace the lost in-state capacity,” he said. “And this cost is forever, not just for three years.”

Charlie Niebling, a wood energy expert who has worked extensively on renewable energy policy at the state and federal level, said he is confident the votes are there to override the governor’s vetoes. “Both passed the House and Senate with strong bipartisan majorities,” he said. “The forest industry has approached the override challenge with great energy and enthusiasm.”

Niebling, a partner at Innovative Natural Resource Solutions, helped found the trade organization Biomass Thermal Energy Council, and previously worked for the Society for the Protection of New Hampshire Forests. He said he has never seen an issue confronting the industry so galvanize people into action. “But the consequences of failure to override are stark—it is very likely that six independent biomass power plants will close by year’s end without the rate support provided by Senate Bill 365,” he said.

Niebling added that it has also been refreshing to see solar, hydro and biomass interests all working closely together to promote the override of both bills. “Regardless of the outcome, the coalition that has formed to encourage legislators to do the right thing bodes well for the future of renewable energy in New Hampshire,” he said.

Carrie Annand, vice president of external affairs at the Biomass Power Association, said several New Hampshire biomass plants have needlessly gone idle due to the veto of SB 365, but an override would keep these plants online. "Preserving a healthy biomass power industry is critical for the state of New Hampshire, both for its role in fostering healthy forests, and for the clean energy it puts onto the grid," she said. "We urge the New Hampshire legislature to support its own local, renewable energy source and enact SB 365. 

Legislature is expected to take up the override vote on Sept. 13. To pass, a two-thirds majority is required in both the House and Senate.