I have decided to support the Governor’s veto on SB446. Initially, I supported the bill, but after reading the Governor’s veto message, and digging deeper into the details of this bill, I’ve decided that the veto is in the best interests of the state and electric ratepayers (residential, commercial and industrial). Here’s why:
- First, the Josiah Bartlett Center for Public Policy’s recent article points out the issues with this bill: “…SB 446 would further increase electricity rates (by an undetermined amount) by letting these biomass plants and other producers build large-scale solar systems — and then forcing utilities to buy that solar power at inflated prices…Supporters say the bills are needed to save jobs. But jobs are plentiful in New Hampshire right now. What they really mean is that they’d like everyone to pay more for electricity so about 400 people can keep very specific jobs.The unemployment rate is 3.2 percent in Coos County, 2.3 percent in Carroll County and 2.1 percent in Grafton County…The issue is not whether jobs are available in the most thickly forested parts of New Hampshire. They are.
The issue is whether the state should forcibly confiscate tens of millions of dollars a year from 1.3 million people in an attempt to preserve specific jobs for about 400 people…”
- Increasing from 1MW to 5MW is a significant increase. Under current law, projects of a size between 100kw and 1mw can receive the default energy service rate for the excess power they produce. The utilities are required to purchase the excess energy at the current rate of 9+ cents per kwh. Since the utilities do not need the power, they sell it into the market, which is currently selling between 3 – 4 cents per kwh. The difference between the higher 9 cent and lower 4 cent rate is a 5 cent subsidy PER KWH. Other customers who are not net metering are paying for that subsidy. SB 446 increases the cap of 1mw to 5mw whereby there are many more power plants that qualify for this subsidy than without the passage of SB 446. It is also notable that the revised net metering rules issued by the PUC were largely the result of settlement positions taken by the various parties. Those positions were heavily influenced by the existing 1MW limit. If the expanded limit of 5 MWs was known during that PUC investigation, the positions of many parties would have been different.
- This bill claims to support fuel diversity through efficient energy generation statewide and can reduce traditional power demand and save resources long-term. However, the solar energy increase under this bill is only a 15% capacity factor and can hardly be called “efficient energy generation”. Also, if some communities are relying on this bill to help lower their town’s energy costs, other towns and residents in them should be reminded that they are paying for these other towns’ reduced electric costs.
- The bill’s Fiscal Note has no dollar value which would lead one to believe there is no monetary impart. However, the Fiscal Note ONLY reviews impacts to state and local government, not to residential or business ratepayers. Because some communities have an interest in adding net metering projects with a subsidy to defray some local costs, there is a chance these communities could see a lower cost. That lower cost however comes at a higher cost to other ratepayers. Where do they think the money for the subsidy comes from?
- The claim that this bill will not result in cost shifting or provide subsidies to the renewable energy industry is not entirely correct. The claim comes from a statement taken out of context. The complete statement made by the PUC gives a clearer picture about cost shifting and emphasizes that net metering is temporary until further studies are completed. The PUC statement:
“Avoidance of Unjust and Unreasonable Cost-Shifting. With respect to the avoidance
of unjust and unreasonable cost-shifting, based on the evidence presented in this proceeding and the current, relatively low DG penetration levels in the State, we find that there is little to no evidence of any significant cost-shifting. Nevertheless, we agree with the parties and believe it is prudent to adopt new net metering tariff provisions to mitigate the potential for future cost shifting, and we believe the new net metering tariff provisions we have approved further that objective by requiring net-metered small customer-generators to pay non-bypassable charges based on all of their electric energy imports and by reducing by three-quarters the distribution
charge credit for their electric energy exports. We will continue to monitor potential cost shifting and other customer rate impacts of net metering over the next several years, and review the issue once again in conjunction with development of future net metering tariff and rate designs.”
So whether you agree or not, these are the facts as I understand them and after reviewing them, are the reasons I’ve decided to support the veto.