N.H. governor vetoes energy bill citing high cost to electric ratepayers

Published on June 20, 2018 by Jaclyn Brandt


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New Hampshire Senate Bill 446 was vetoed by Gov. Chris Sununu on Tuesday, a move seen as a win for ratepayers and customer advocates. The bill, introduced by state Sen. Kevin Avard (R-Nashua), would have increased the size limit for net metered projects from 1 megawatt (MW) to 5 MW.

At 1 MW, the current upper limit in the state, the beneficiaries are mainly homeowners and small businesses. But if that limit were to increase to 5 MW, larger businesses or small municipalities could potentially be making money, a subsidy that would cost the ratepayers in the end, according to Marc Brown, president of the New England Ratepayers Association.

“Essentially what it would do is expand net metering compensation beyond the wholesale rate to generators from 1 to 5 megawatts,” Brown explained. “Those generators now can receive wholesale market compensation, but they can’t receive above market rates.”

In his statement regarding the veto, Sununu said Senate Bills 446 and 365, a separate bill providing subsidies to biomass plants, would collectively have cost electric ratepayers around $100 million over three years.

“While I agree that expanding net metering could be a benefit to our state, Senate Bill 446 would cost ratepayers at least $5 to $10 million annually and is a handout to large-scale energy developers,” the governor said in his statement. “These immense projects should use incentives already available and compete on their own merits.”

The rule currently in place is meant to give an opportunity for small customers to generate energy, encourage private investments in renewable energy resources, and to diversify the energy mix in the state. While many are in support of renewable energy generation, the expanded fees that would come with raising the limits are what the governor calls “unjust taxation” on businesses and families.

Despite the raised costs to ratepayers, Brown said the bill would have little effect on the revenue of utilities in the state.

“One of the misnomers out there is that this somehow affects their bottom line. It doesn’t,” Brown said. “They’re going to get their rate of return on their transmission and distribution regardless. They don’t make money off of energy.”

Carol Valianti, vice president of Communications & Public Affairs with New Hampshire electricity and natural gas utility Unitil Corp., agreed with Brown that “New Hampshire is a pass-through state so our utility would not be impacted in any way.”

“Our concern with the bill was the increase in rates, as the governor highlighted, that would impact our customers,” she said. “The cost of energy continues to be the main concern we hear from customers, the business community, and legislators.”

Gov. Sununu said raising energy rates in a state that “has some of the highest electric rates in the country” would put a financial strain on the elderly, those on fixed incomes, and the business community.

“We need to be taking steps to lower electric rates, not passing legislation that would cause massive increases,” he added.

Sen. Avard said he was disappointed that SB 446 was vetoed, and that the intention of the bill was to eventually lower costs for ratepayers.

“Communities across our state, like the City of Nashua, should be given the opportunity to build mid-size clean energy infrastructure and sell back unused energy to the grid. This would benefit businesses and municipalities by cutting energy costs while also creating greater energy diversity,” Avard said.

The New England Ratepayers Association said that the utilities did not support the bill because they were standing up for their customers, but there is still more work to be done. Brown added, “We’re thankful for the governor for vetoing this. It will stop rates from increasing. It’s obviously not going to lower rates, because it’s not removing an existing bill, but it’s a stopping of that piece of legislation from being passed.”