Sullivan County considers renewable energy offer that could cut costs

By FRANCES MIZE

Valley News Staff Writer

Published: 12-06-2023 3:40 AM

NEWPORT — Sullivan County Commissioners gave County Manager Derek Ferland the go-ahead on Tuesday to negotiate a contract with a solar energy project that could lower the electric bill at the county complex in Unity.

The deal with Freedom Energy Logistics, of Auburn, N.H., could return around $15,000 in rebates to the county. It was made possible by a law passed this summer that shook up the landscape of electricity generation in New Hampshire by making local governments coveted customers for large-scale solar projects.

Under the new law, “virtual group net metering” solar projects of up to 5 megawatts can recruit customers from anywhere within a shared utility service territory, so long as those customers are governments or school districts. Previously, solar net metering projects of that size had to be in the same municipal boundaries as its customers.

The law (House Bill 281) expanded the customer base — and therefore, the viability — of large-scale solar. It’s one of ways that New Hampshire is trying to incentivize renewable energy generation.

For government entities such as Sullivan County, however, there are strings attached when deciding to take advantage of rebates that come from such projects.

Net metering reduces the energy bills of renewable energy system owners by crediting them for any excess energy they put back on the electrical grid, which is used by other utility customers.

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With virtual group net metering, the energy can be generated in a different area of the state from where it’s consumed, as would be the case, for example, for participants in large solar arrays like the one potentially involving Sullivan County.

Customers of group net metering receive rebates — a portion of the money paid by utilities to the project owner for the energy it sends to the grid.

Virtual group net metering doesn’t make sense for every municipality.

Many Upper Valley communities won’t benefit from the new law because they already have their own renewable energy investments. Lebanon, for instance, has a number of solar projects online and is anticipating more in the future, said Tad Montgomery, the city’s energy and facilities manager.

“Our hope is to transition the entire city’s load to solar in the next year or two,” he said.

That would free up power generated by the landfill gas project — which converts methane from the Lebanon Solid Waste and Recycling Facility to energy and is estimated to come online sometime in mid-2024 — for other customers, such as the city’s schools, Montgomery said.

In Hanover, a 1-megawatt solar array near the water plant offsets the energy used for wastewater treatment, Howe Library, and the R.W. Black Community Center, said Peter Kulbacki, the town’s director of Public Works. It was the largest array the town could build in the days before net metering allowances were expanded to 5 megawatts, he said.

A number of vendors like Freedom Energy offering virtual group net metering reached out to Hanover, Kulbacki said. “But we wanted to keep the flexibility.”

The priority for the town is building out more renewable energy projects of its own, rather than reducing the rate it pays for electricity, he said.

In order to qualify under the new law, a virtual net metering project must indicate in advance that it has secured qualifying customers. That has made municipal clients into “hot commodities” for clean energy developers, said Sam Evans-Brown, executive director of Clean Energy NH, a nonprofit clean energy advocacy group.

As far back as 2021, when New Hampshire approved large-scale hydroelectric net metering – a signal from the state that it was warming up to the concept writ large – solar developers began lining up at the barricade. They were staking out land, waiting for the restrictions on their projects to be dropped, Evans-Brown said.

“You find a good place to build first, and then customers second,” he said.

When the solar allowance became law this summer, what Evans-Brown characterized as a “gold rush” commenced.

But virtual net metering can be confusing at first encounter, Evans-Brown said. It’s sometimes difficult to come to terms with the fact that a solar project built in one town could benefit another far away.

Clean Energy NH is working to educate municipalities about their newfound purchasing power. Evans-Brown’s message is this: Municipal leaders should “shop around” to try to get the best deal they can for local taxpayers, he said.

If Sullivan County decides to strike a deal with Freedom Energy to connect with a net-metered solar project, the county would receive a 12.5% rebate from the project on the rate it currently pays to Eversouce, its electric utility. It’s not clear yet where the project would be built.

“We’re not buying anything,” Ferland said, emphasizing that the county wouldn’t have to put up any capital of its own. “Instead (the renewable energy project owner) gets a better rate. As a result of getting that better rate, we get a rebate of that added value.”

Currently, Sullivan County is contracted with Freedom Energy for a net-metered hydro project that returns about $10,700 a year to the county, which uses around 2 million kilowatt hours a year. The company sends Sullivan County a rebate check quarterly.

If the county were instead to sign onto a solar contract, which returns higher rebates than hydro projects, Freedom Energy would “just shut off the hydro and turn on the solar,” Ferland said.

But there are additional considerations, he said. Sullivan County is looking to build its first solar array in the next two to three years. The project would reduce its energy consumption, limiting the kilowatt hours it could pledge to Freedom Energy.

Like officials in Lebanon and Hanover, Ferland is thinking long term.

Frances Mize is a Report for America corps member. She can be reached at fmize@vnews.com or 603-727-3242.