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Even after victory in Statehouse biomass battle, Springfield, N.H., power plant goes idle

  • Trucks carry chipped wood from logging jobs within 75 miles of the Springfield Power biomass plant to be burned to generate electricity, Wednesday, August 2, 2018. The plant burns about 640 tons of the chips per day. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Valley News file photograph — James M. Patterson

  • A trailer carrying between 25 and 30 tons of wood chips from a logging job, enough for about one hour of electric generation, is emptied at the Springfield Power biomass plant in Springfield, N.H., Wednesday, August 1, 2018. The facility is one of the 6 independent biomass plants that have been impacted by Sununu's veto of S. 365 that would have required utilities to purchase a portion of their electricity from the biomass plants. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Valley News File photograph — James M. Patterson

  • Control Room Supervisor Barry Cantlin monitors equipment at Springfield Power Wednesday, August 2, 2018. The power plant, which came online in 1987, burns chipped logging waste to fire a boiler and create steam that runs a turbine generator, putting out 15 MW of electricity per hour. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Valley News Staff Writer
Published: 5/11/2019 10:27:39 PM
Modified: 5/14/2019 3:24:37 PM

SPRINGFIELD, N.H. — Last September the timber industry in New Hampshire scored a big win when the Legislature overrode Gov. Chris Sununu’s veto to push through a controversial biomass bill designed to subsidize the wood-burning power plants and save them from closing.

The bill became law, giving wood chip suppliers and power plants a boost — but now, in a twist of fate, the biomass plant in Springfield, N.H., is idle anyway, as implementation of the law has been stymied by legal challenges and a failure to reach a power purchase agreement with Eversource, the state’s largest electric utility.

Springfield Power, whose 17-megawatt plant is visible just south of Exit 13 on Interstate 89, shut down on May 1. Its sister plant in Whitefield, N.H., closed a few weeks earlier.

Springfield Power General Manager Chuck Theall said that until he stopped purchasing wood chip fuel in early April, his plant was receiving about 125 truckloads of wood chips per week. (One truckload holds 32 tons, and chips have been selling for anywhere from $22 to $32 per ton, depending on the time of year and plant demand.)

“I deal with approximately 20 companies who now don’t have a buyer” for their wood fuel, Theall said. “I even got some mom-and-pop suppliers I buy from.”

Theall said Springfield Power employs about 16 people — he has four to five open positions — and even though the plant is not currently generating electricity, owner EWP Renewable Corp. is continuing to pay workers. They’re using the downtime on maintenance and painting.

Meanwhile, the state’s other four independent biomass power plants have stopped purchasing wood chips, too. And it’s hitting wood producers’ bottom line.

“It’s more than a little frustrating for us,” said Jasen Stock, executive director of the New Hampshire Timberland Owners Association, which represents landowners and forest industry employers and who lobbied aggressively last year to persuade a majority of lawmakers to overturn Sununu’s veto.

“You got people jumping up and down saying, ‘We debated it,’ ” Stock said of those who supported the veto override only to later find biomass plants idled. “They don’t get how this could happen.”

At stake, the timber industry contends, is thousands of jobs and livelihoods tied to forest management, logging, chipping and transportation, as well as businesses that service them, from heavy equipment suppliers, mechanics and fuel sellers to roadside markets and general stores that sell coffee and sandwiches to truckers.

Electric utilities and the state’s consumer advocate counter that the biomass law, known as SB 365, amounts to a lawmaker-imposed subsidy of an antiquated, minor contributor of electric power that can’t compete with cheaper and more efficient sources of power generated by hydro and natural gas.

Last week, a bipartisan group of state senators proposed an amendment to a bill that originated in the house dealing with a separate electricity issue that would seek to break the legal logjam that has prevented implementation of biomass law.

“The biomass industry is at a crisis point and these legal challenges are undermining jobs in the forest products industry and reliability in New Hampshire’s generation mix,” Sen. Jeb Bradley, R-Wolfeboro, said in a statement.

Under the biomass law the state’s utilities are mandated to purchase electricity at above-market rates from New Hampshire’s six in-state biomass plants. But execution of the contracts has been sidelined by legal wrangling among various parties with a vested interest in its outcome.

Not long after lawmakers overrode Sununu’s veto of the biomass bill last fall, a Concord-based advocacy group called New England Ratepayers Association petitioned the Federal Energy Regulatory Commission, arguing that SB 365 runs afoul of federal energy law by usurping the regulatory agency’s “sole jurisdiction to set wholesale prices.”

The state’s consumer advocate and the Electric Power Supply Association, a Washington-based lobbyist representing oil and energy producers, also filed with regulatory commission in support of the NERA’s petition, claiming that SB 365 will cost New Hampshire ratepayers between $20 million to $30 million more annually for their electricity.

Another blow for the state’s biomass plants came in January, when the New Hampshire Public Utilities Commission sided with Eversource and agreed the law could not take effect without signed agreements between the producers and the utilities and while the matter was being adjudicated at the federal level.

Resorting to the courts, a group of biomass plants appealed to the New Hampshire Supreme Court to intervene with the PUC and require Eversource to buy power at the discounted rate. The appeal is pending.

Eversource spokesman William Hinkle said via email that the utility has negotiated “in good faith” to comply with SB 365’s requirements but wants at the same time customers to be “protected if the law is invalidated by federal authorities.”

He said that the company has a legal obligation to protect ratepayers from excessive charges — Eversource maintains under SB 365 the “above-market” cost it would be required to pay the biomass plants over a three-year period totals $75 million — until the conflicts are resolved.

“If the legislature finds a solution that addresses the pending constitutionality questions and ensures that above-market costs can be recovered, we will continue working to implement the goals of the New Hampshire legislature,” Hinkle said.

In an effort to do just that, Bradley last week introduced an amendment to an unrelated bill that Stock of the NHTOA described as a “workaround” to the legalities that have bogged down SB 365’s implementation. The amendment replaces the utilities’ direct purchase of electricity from the biomass plant with the purchase of “renewable generation credits.”

Utilities would recover the money spent on purchase of the credits by tacking on a charge — estimated by supporters at $1 to $2 per month — to customers’ electricity bills, according to the amendment.

But in the meantime New Hampshire loggers say they are losing valuable business as biomass plants have stopped purchasing their wood chips.

Heath Bunnel, owner of HB Logging in Monroe, N.H., in northern Grafton County, said his shipment of wood chips is off 50% and he is losing “thousands of dollars a week” as he has only two customers left — a biomass plant in Ryegate, Vt., and another in Berlin, N.H., operated by Burgess BioPower, which is covered under a separate contract with Eversource.

“It’s going to impact the state in a big way,” Bunnell said. “We have all these families, loggers and truckers whose income is really going to drop.”

Theall said he’s hopeful the amendment proposed by lawmakers will lead to Springfield Power coming back online, although he said he’s mindful of the fate of Indeck Energy’s biomass plant in Alexandria, N.H.

When that 15-megawatt plant was shut down in 2017, its owner cited unsustainable economics. At the time the owner described the plant’s idling as a “temporary closure” and expected the plant to restart once market conditions improved. It never reopened.

“Tough business,” Theall said.

John Lippman can be reached at jlippman@vnews.com.

Correction

The New England Ratepayers Association is based in Concor d, N.H. An earlier version of this story misidentified the state where the organization is based.




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