In the Feltes vs. Volinsky fight over natural gas, Feltes is right

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The two candidates seeking the Democratic nomination for governor are engaged in a heated dispute over natural gas. Though both support transitioning to 100% “clean energy,” state Sen. Dan Feltes would use natural gas in the transition; Executive Councilor Volinsky would not.

Feltes would rely on natural gas as a bridge fuel between dirtier-burning fossil fuels (coal and oil) and energy sources that emit no greenhouse gasses.

Volinsky opposes the use of natural gas in any circumstances. He portrays any use of natural gas as a win for fossil fuel companies and a loss for the environment. 

The historical record shows the opposite to be true. 

Last year, the International Energy Agency released a report on the environmental benefits of replacing coal with natural gas, showing that the switch has produced enormous environmental benefits. 

“Since 2010, coal-to-gas switching has saved around 500 million tonnes of CO2 – an effect equivalent to putting an extra 200 million EVs running on zero-carbon electricity on the road over the same period.” (EV = electric vehicle.)

Continued replacement of coal with natural gas would produce further emission reductions, the IEA report concluded. 

“Given the time it takes to build up new renewables and to implement energy efficiency improvements, this also represents a potential quick win for emissions reductions. There is potential in today’s power sector to reduce up to 1.2 gigatonnes of CO2 emissions by switching from coal to existing gas-fired plants, if relative prices and regulation support this potential. The vast majority of this potential lies in the United States and in Europe. Doing so would bring down global power sector emissions by 10% and total energy-related CO2 emissions by 4%.”

The IEA report found that “on average, coal-to-gas switching reduces emissions by 50% when producing electricity and by 33% when providing heat.”

In New Hampshire, coal is still used to produce electricity during periods of peak demand in summer and winter. The state has two of the only three remaining coal-fired plants in New England. Relying on natural gas instead of coal for those peak-use plant firings would bring a quick 50% drop in emissions during those periods. 

This emissions reduction would not require waiting for green energy production to scale up. It can be had just by increasing the use of natural gas, which emits almost 100 pounds less carbon dioxide per BTU than the cleanest-burning coal. 

Aside from electricity generation, more natural gas would help New Hampshire reduce its reliance on heating oil, which emits 44 pounds more carbon dioxide per BTU than natural gas. Two-fifths of New Hampshire homes are heated with oil, the second-highest portion in the nation (Maine is first.) 

More natural gas distribution lines would provide more homes with the ability to switch from oil to gas, which is both cheaper and cleaner. Consumers would save money and reduce emissions. But these distribution lines are routinely opposed by environmental activists.

Natural gas was made cheap and plentiful by the fracking revolution, which was a private-sector innovation no government regulator had thought to prevent. Yet the cleaner fuel often can’t get to consumers because of regulations and political activism, forcing New Hampshire to rely on dirtier coal and gas. 

Sen. Feltes is right that using more gas now would reduce both emissions and consumer costs. This is not theoretical. Government data show that it’s already happened.

From 1990-2017, New Hampshire’s energy-generated carbon emissions fell by 8.4% and the carbon intensity of the state’s energy supply fell by 29%, U.S. Energy Information Administration data show. 

The market-based transition to natural gas explains the bulk of that reduction, with a slower growth in renewable generation explaining a smaller portion. 

As regional power grid operator ISO New England states in its most recent report on New England’s energy mix:

“When the wholesale markets opened to competition, private companies invested billions of dollars in the development of natural-gas-fired power plants because they used advanced technology that made them run efficiently; were relatively inexpensive to build, site, and interconnect; and their lower carbon emissions compared to coal and oil helped the region meet state environmental policies. As nearby shale gas emerged as an inexpensive and plentiful fuel resource in the 2008 timeframe, natural gas generators became the go-to resource for New England, clearing as the largest resource type in the market year after year. Nearly half of the region’s electric generating capacity uses natural gas as its primary fuel (about 15,000 MW), and natural-gas-fired power plants produce about 40% of the grid electricity consumed in a year.”

The chart below, from ISO New England’s report, shows how natural gas grew into the region’s dominant energy source, pushing out dirtier-burning coal and oil. 

Aspiring to end the use of fossil fuels is fine. A realistic approach will get us there faster than one based on green fantasies. 

Innovation is making alternative energy sources cheaper and is improving battery technology. Some day, we might have the ability to generate large amounts of wind and solar power and store it for use in cloudy and windless periods. But tomorrow won’t be that day. 

In the meantime, natural gas is reliable, storable, affordable, and cleaner than other fossil fuels. There is a lot to dislike about Feltes’ energy plan, but to his credit he recognizes the practical environmental gains that can be made by relying on natural gas for now. 

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Study estimates N.H. cost of Green New Deal at more than $74,000 per household in first year

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Two weeks after a supporter of the Green New Deal won the New Hampshire primary, a new study finds that paying for only a few of the Green New Deal’s largest mandates would cost the median New Hampshire household more than its entire annual income in the first year of implementation.

“The Green New Deal is a politically motivated policy that will saddle households with exorbitant costs and wreck our economy, said Kent Lassman, president of the Competitive Enterprise Institute (CEI) and co-author of the study. “Our analysis shows that, if implemented, the Green New Deal would cost New Hampshire households more than $74,000 in just the first year alone. Perhaps that’s why exactly zero Senate Democrats, including Senators Jeanne Shaheen and Maggie Hassan, voted for the Green New Deal when they had the chance.”

The study, by CEI and Power the Future, analyzed the cost of just a portion of the Green New Deal’s energy mandates. It estimated New Hampshire’s costs at $74,723 per household in the first year. That’s slightly ($666) higher than New Hampshire’s median household income.

The Green New Deal sets extraordinarily ambitious goals for combatting climate change. It would mandate that all power come from zero-emission energy sources, the electric grid be converted to a “smart grid,” every building in the United States be retrofitted “to achieve maximal energy efficiency,” the government “eliminate pollution and greenhouse gas emissions from the transportation sector as much as is technologically feasible,” the government remove greenhouse gases from the atmosphere through “low-tech” solutions (planting trees, potentially), and the government eliminate greenhouse gases from the agricultural sector as much as is technologically possible.

Those are just the environmental goals. The legislation also guarantees, among many other things, a job with high pay and paid family leave, strengthened labor laws, a halt to “the transfer of jobs and pollution overseas” and high-quality health care, affordable housing, economic security and affordable food for every American.

The study leaves out all of the non-environmental goals and examines only a portion of the environmental mandates. It estimates costs for converting residential housing to Green New Deal efficiency standards (leaving out all commercial and industrial buildings, which are covered in the law), replacing non-compliant household vehicles with electric vehicles, making ground shipping compliant with the Green New Deal, and switching to green power. 

This extremely conservative estimate that excludes most Green New Deal mandates comes up with a per-household cost for New Hampshire of $74,723 in the first year, $47,310 in years 2-5, and $39,821 per year after year five. 

After reaching these figures, the authors conclude that “the Green New Deal is an unserious proposal that is at best negligent in its anticipation of transition costs and at worst a politically motivated policy whose creativity is outweighed by its enormous potential for economic destruction.”

You can read the study here.

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Transportation and Climate Initiative a bad deal for New Hampshire

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The regional cap-and-tax scheme called the Transportation and Climate Initiative (TCI) is a bad deal for New Hampshire, the initiative organizers’ own projections show.

Modeled on the Regional Greenhouse Gas Initiative, the TCI would cap carbon emissions from transportation sources (vehicles) and force fuel distributors to buy carbon allowances. A declining cap would force distributors to buy more allowances annually. The hope is to compel a switch to non-fossil fuels or to discourage driving by making it uncomfortably expensive.

Naturally, the costs of buying the allowances would be passed on to consumers. In effect, the TCI imposes an additional fossil fuel tax on top of the state and federal gas taxes consumers already pay.

The cost to consumers would be enormous. On December 17th, the TCI organizers released the results of their own analysis of the program’s impact. They project that the carbon allowances would generate revenue of between $1.4 billion and $5.6 billion annually in the 12-state TCI region (plus the District of Columbia), which covers Mid-Atlantic and Northeastern states, including New Hampshire.

That would be a cost of between $14 billion and $56 billion over the decade spanning from 2022-2032.

But the TCI organizers’ own projections show that almost all of the carbon emissions reduction projected during that decade can be attributed to existing trends and not to the TCI scheme.

In August, they projected a baseline reduction in carbon emissions of “roughly 20 percent” without the TCI.

“Total gasoline and diesel consumption and CO2 emissions both fall by roughly 20% from 2022 through 2032 as a result of increased fuel economy in light and heavy-duty vehicles and increased LDV EV shares,” according to the organizers’ own analysis. (LDV EV = light duty vehicle electric vehicle.)

In a presentation released on December 17th, TCI organizers projected that the TCI would cause carbon emissions to fall by approximately 1-5 percentage points above the roughly 20 percent that will occur under existing policies.

The worst-case scenario projection was a 20 percent drop in carbon emissions from 2022-2032, which could be as little as a fraction of a percentage point above the baseline projection. The best-case scenario projection was a 25 percentage point reduction, which would be, at best, 6 percentage points above the baseline.

Understanding the baseline is critical because groups that support the TCI are already claiming it will produce up to a 25 percent reduction in carbon emissions in the region. That is false. Roughly 4/5ths of that reduction will happen anyway, the TCI organizers’ own projections show.

At best, the TCI would reduce carbon emissions of a little more than 5 percent in 10 years — at a cost of $56 billion in that best-case scenario. Without the TCI, carbon emissions are projected to fall by roughy four times that amount. If the TCI’s worst-case scenario occurs, the cost would be $14 billion to achieve an emissions reduction roughly 1/20th the size of what would happen anyway.

The TCI organizers projected that their initiative would cause gas taxes to rise by 5-17 cents per gallon if distributors passed the costs on to consumers (which they would). That seemingly small figure would extract billions of dollars from the economy, giving it to governments to distribute to projects that they favor but that consumers might not. In fact, the whole point is to replace consumer and investor choices with those made by government officials.

The program’s assumed effectiveness relies heavily on the premise that government officials will spend billions of dollars in ways proven to be effective at generating additional carbon reductions. Not only would those projects have to be effective on their own, they would have to be more effective than the choices that otherwise would have been made by business, entrepreneurs and consumers in the absence of the TCI.

Rather than forcibly extract billions of dollars from consumers in yet another heavy-handed attempt to control people’s behavior, governments should scrap this carbon tax scheme and let the market continue to generate solutions.

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Who’s to blame for biomass plant closures?

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A handful of Democratic politicians on Wednesday stood in the snow outside an obsolete power plant and reversed their party’s customary line of attack when an industrial facility closes. Instead of blaming greed or billionaires or out-of-state corporations or winged monkeys for the recent closure of two N.H. biomass power plants, they blamed the government.

Wait, what?

Yes.

Well, not the government in general, just Republican Gov. Chris Sununu. They objected to his having vetoed bills that would have forcibly taken money from average people and given it to large, out-of-state corporations.

Wait, what?

Yes.

These Democratic politicians were attacking a Republican for opposing corporate welfare.

Specifically, the vetoed legislation would have created new ratepayer subsidies for biomass power plants. The vetoes caused two of the six plants (ones owned by a private New Jersey corporation) to close, they alleged.

Never mind the plants that didn’t close (one of which did get new state subsidies).

Never mind that the governor doesn’t run the shuttered power plants, didn’t make the decision to close them, and didn’t prevent their parent company from investing in them more heavily.

Also ignore a 2018 study published by none other than the State of New Hampshire, which showed the state’s biomass power plants to be expensive and inefficient compared to rival power producers.

The Office of Strategic Initiatives study showed two unmistakable trends, both driven by consumer demand for lower energy prices:

The removal or reduction of artificial price supports over many years.
The innovation-driven drop in the cost of other fuel sources.

Supposedly, the state has to force all Granite State residents and businesses to subsidize biomass power plants because they buy and burn wood pulp, thus keeping New Hampshire’s tiny timber industry alive.

But the state doesn’t have similar subsidies for paper companies or home construction, which are more important for the timber industry. Biomass accounts for only 3 percent of the value of a timber harvest, but sawlogs account for 90 percent, according to New Hampshire Business Review.

The state’s report showed that biomass plants might not have become so reliant on subsidies if they had invested more cost-savings initiatives or experimented with new business models. To conclude that the governor alone, rather than company officers and directors, was responsible for the fate of 1/3 of New Hampshire’s biomass plants (just the ones that closed) is a rather interesting position to take.

The state’s report concluded that biomass plants would continue to struggle because they inefficiently produce expensive electricity while most competitors, even other renewable power generators, more efficiently produce cheaper electricity.

“As new projects are connected to the grid, predominantly wind and solar, biomass will cede its market share to other forms of generation. These more flexible resources will contribute to more volatile, but lower market prices, leaving biomass generation at a steeper competitive disadvantage. New Hampshire ratepayers would likely need to provide continuous subsidies at above market prices to sustain Class III biomass generation.”

In short, burning wood (at least with existing technologies) is not the way to power a 21st century economy. A March U.S. Energy Information Agency report on the future of U.S. power generation didn’t even mention biomass, concluding that “most of the electricity generating capacity additions installed in the United States through 2050 will be natural gas combined-cycle and solar photovoltaic (PV).”

Biomass power generation is dying a natural death. That’s why companies that own biomass plants are reluctant to sink any more money into them. Forcing ratepayers to make up the difference between what people are willing to pay for power and what biomass power costs is neither compassionate nor morally defensible. It is massively wasteful — of other people’s money.

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50 years after start of anti-Seabrook protests, a turn toward nuclear power

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If San Francisco tech bro hipsters invented a carbon-free way to generate power 24/7, they would be hailed as saviors of the planet. Though they might yet come up with some use for a venti Matcha Green Tea Frappuccino, the energy technology in question predates them and even their retro clothes. In 1951 in Idaho, scientists for the first time used a nuclear reaction to generate electricity.  

Though 59 nuclear power plants generate about 55 percent of the non-carbon-emitting power in the United States, they are still opposed by environmental activists who came of age in the 1970s.

Some of those greens are celebrating 50 years of activism in New Hampshire this month. As they celebrate, there are signs that younger Democratic politicians and activists, fearing climate change more than nuclear meltdowns, are ignoring them and embracing the promise of carbon-free nuclear power. 

This spring, the Pilgrim nuclear plant in Plymouth, Mass., closed. It followed the retirement in 2014 of Vermont Yankee. The closings leave only two nuclear plants in New England: Seabrook Station in Portsmouth and Millstone in Connecticut. 

These closures have left New England more reliant on carbon-emitting fossil fuels. 

When Pilgrim closed, ISO New England, the region’s power grid operator, concluded that three new plants that burn natural gas or oil would more than make up for Pilgrim’s 680 megawatts. 

Vermont Yankee’s closure increased carbon emissions in New England as the 604 mw of nuclear power was replaced with natural gas, ISO New England confirmed. 

As the Springfield Republican reported at the time, “while replacing coal with a natural gas plant reduces carbon emissions, replacing a nuclear plant with natural gas-fired generation has the opposite effect.”

That’s why some politicians and activists on the left are questioning the wisdom of anti-nuke extremism.

Seabrook Station offers a cautionary tale. 

Scheduled to open in 1974, New Hampshire’s only nuclear power plant did not come online until 1990. In those 26 years, carbon-free power was replaced with carbon-emitting power. 

A planned second reactor at the site was scrapped after lengthy legal battles. The additional 1,150 mw of power that would have been generated by a second reactor were instead generated by fossil-fuel-burning plants. 

Coal-burning Merrimack Station and oil/gas-burning Newington have a joint capacity of 918 mw. Had the second reactor been finished, they might have been made redundant.  

In fact, instead of opening a nuclear plant in 1974, PSNH opened its oil-burning plant at Newington. The announcement of plans to build this plant came in 1969, shortly after activists formed the Seacoast Anti-Pollution League to fight the nuclear plant, according to Peter Evans Randall’s history of Hampton. 

To get an idea of how the anti-Seabrook movement led to unintended consequences, one need only look at NextEra Energy’s license renewal application for Seabrook. It estimated that replacing the nuclear plant with coal would create 9.5 million tons of carbon dioxide emissions per year and replacing it with natural gas would create 3.5 million tons. Those estimates were based on modern technologies, not the higher-emitting ones under which Merrimack Station and Newington operated for the 26 years before Seabrook opened. 

Environmental activists still claim the 26-year delay and the killing of the second reactor as wins for the environment. The ironically named Seacoast Anti-Pollution League, formed in 1969 to oppose Seabrook Station’s construction, is holding a 50th anniversary celebration next week. 

But this week’s CNN climate town hall showed that some Democratic politicians are not buying the anti-nuke nostalgia. 

Some presidential candidates, like Elizabeth Warren, remain steeped in the ‘70s.  

“The problem is it’s got a lot of risks associated with it, particularly the risks associated with the spent fuel rods,” she said on Wednesday. “In my administration we are not going to build any new nuclear power plants.”

Fears such as Warren’s are misguided, author Ben Rhodes documented for the Yale School of Forestry and Environmental Studies last year.  

Other candidates seem to have been swayed by more recent research such as Rhodes’. The Washington Post identified five remaining Democratic presidential candidates as open to nuclear power development. At the CNN town hall, Andrew Yang and Cory Booker embraced the promise of new nuclear technology.

“Right now nuclear is more than 50 percent of our non-carbon causing energy,” Booker said, accurately. “So people who think that we can get there without nuclear being part of the blend just aren’t looking at the facts.”

“We can actually go to the kind of innovations that make nuclear safer or safe,” he said.

That one word — “innovation” — marks the change in mindset. 

For generations, environmental activism has been guided by a fixation on government control. Protesters believed that the only path to Eden led backwards into the past, formed by state suppression of disfavored technologies. 

New nuclear technology is showing the old greens to be wrong. MIT Technology Review reported in February that nuclear power is critical for reducing global carbon emissions, a fact being recognized even by some environmental groups: 

“If the current situation continues, more nuclear power plants will likely close and be replaced primarily by natural gas, causing emissions to rise,” argued the Union of Concerned Scientists—historically nuclear skeptics—in 2018. If all those plants shut down, estimates suggest, carbon emissions would increase by 6%.

At this point, the critical debate is not whether to support existing systems, says Edwin Lyman, acting director of the UCS’s nuclear safety project. “A more practical question is whether it is realistic that new nuclear plants can be deployed over the next several decades at the pace needed.”

The recognition that the path to Eden will be cleared by innovators, not regulators, is a huge insight. It hasn’t permeated the presidential field — or even Sen. Booker’s own environmental plan — yet. But the fact that some candidates and environmental organizations are embracing it at the risk of angering Prius-driving, Pete Seeger-listening Baby Boomers is encouraging. 

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Eliminating coal is a gas, gas, gas

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On Tuesday, a few protesters dumped a few buckets of coal at the State House. It was, they said, a bold act of civil disobedience because they stole the coal from the Merrimack Station power plant in Bow. Yes, they admitted this. They even helpfully provided the Bow Police with evidence by posting an incriminating photo on their own website.

Activists organized by the Climate Disobedience Center routinely commit crimes against fossil fuel infrastructure. They theorize that a rapidly arriving climate catastrophe justifies the criminality. The Tuesday publicity stunt was orchestrated to pressure the state to shut down the coal-burning Merrimack Station.

’60s-style protesting is a gas, as they said back then. But sometimes logic and clear thinking get lost in all the excitement of “sticking it to the man.” Inconvenient truths are hard to see when blinded by self-righteousness. Among them: these activists have helped prolong the life of Merrimack Station and increase the number of days it operates.

Merrimack Station is no longer in daily use because fracked natural gas is cheaper to burn than coal. The station remains online only as a backup generator for when the region’s natural gas plants can’t meet demand, primarily during winter and summer spikes.

The station is most needed during periods of peak demand, and New England’s peak electricity demand comes in… August. Last year’s heaviest day of electricity use was August 29. Activists demanded the closure of New Hampshire’s most important backup power plant right when it is most needed to prevent blackouts. Genius.

Environmental activists demand that the coal plant be shuttered and replaced with renewable energy. But wind and solar cannot fill this spot need because they are not on-demand power sources. They generate power when nature dictates, not when humans flip a switch.

Ironically, coal remains a go-to backup power source in large part because activists have succeeded in restricting New England’s supply of the cleaner, cheaper fuel that has nearly displaced coal entirely: natural gas.

Huge supplies of cheap natural gas produced by fracking dramatically dropped the price of electricity in New England in the last decade, dropping coal to just 1 percent of the region’s energy generation.

“The high efficiency of natural-gas-fired generators and the generally low cost of nearby domestic shale gas (which emerged as a resource in 2008) are largely responsible for a 46% decrease in the average annual price of New England’s wholesale electricity over the past 10 years,” ISO New England, the region’s non-profit electric grid operator, wrote in this year’s Annual Energy Outlook. “Lower wholesale prices translate into lower power-supply charges for consumers.”

Abundant, cheap natural gas was the single biggest factor in the almost complete collapse of coal use in New England.

“Since 2000, electricity generation from coal has declined and the contribution from natural gas has increased markedly, primarily because two large natural gas-fired power plants came online in 2002 and 2003,” the U.S. Energy Information Administration has concluded. “However, as increasing amounts of natural gas are used to generate electricity, in New Hampshire and in New England as a whole, assurance of natural gas supply has become a critical energy issue for the region.28“

Critically, the EIA notes that after years of decline, coal use in New Hampshire has been trending upward as natural gas use has fallen.

“New Hampshire’s natural gas-fired generation has declined in the past three years and now is at its lowest level since 2002. The decrease has been compensated for primarily by increases in coal-fired generation and hydroelectric power.29”

In other words, we were on the verge of eliminating coal as a fuel source when a decline in natural gas generation caused a turn back to coal to fill the gaps.

Much of the credit for this goes to climate activists who have helped to block natural gas pipeline and import terminal construction. By slowing the construction of new natural gas infrastructure, activists from the Climate Disobedience Center and other groups forced electricity generators to turn to coal to meet demand on peak days.

Climate Disobedience Center activists have boasted about protesting, among others, the expansion of the Algonquin Pipeline, which would bring additional natural gas supplies into New England, further reducing the region’s dependence on dirtier-burning coal and fuel oil.

A few years ago, ISO New England commissioned a study of natural gas capacity. It projected that inadequate pipeline capacity would lead to gas shortages on 24-34 days per winter by the winter of 2019-20.

Days like those are when Merrimack Station is fired up.

The quickest way to close Merrimack Station is not to protest its operation. The quickest way is to stop blocking the pipelines that would supply New England with enough natural gas to replace coal permanently.

(Photo credit: Si Wilson, Flickr)

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Our legislators must be scientific super geniuses

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For years, legislators have been on a relentless quest to raise electricity rates for Granite Staters. Because unlike the rest of us, they are geniuses. 

None of us knows exactly what New Hampshire’s energy mix should be. None of us could say precisely how much of the state’s energy should come from solar or biomass. 

But they know.  

In the continental United States, only three states (Connecticut, Massachusetts and Rhode Island) have higher electricity rates than New Hampshire. There are lots of reasons why our rates are so high. One is that we don’t have enough pipelines to deliver natural gas to the state. Another is that we have multiple state mandates that raise rates by requiring utilities to pay higher prices for the type of power legislators prefer — instead of the type of power consumers prefer. 

Because they know. 

This week they issued their latest genius decree. Senate Bill 168 would amend the state’s Renewable Portfolio Standards (RPS) to require that at least 5.4 percent of New Hampshire’s electricity is generated from solar sources by 2025.

The Renewable Portfolio Standards, imposed in 2007, force utilities to buy certain percentages of power from renewable sources such as thermal, new solar, biomass and small-scale hydro. Utilities must buy 25.2 percent of their power from renewable sources by 2025, with that 25.2 percent broken down into specific classes.

The current standards require that 0.6 percent of power comes from new (opened after 2005) solar generation. Bumping that to 5.4 percent in six years, as SB 168 does, is a huge increase. An ignoramus might ask: why 5.4 percent?

Why not 5 percent? Or between 5-10 percent? Why exactly 5.4 percent? 

That’s amazing precision. 

How do legislators know that 5.4 percent is precisely the right percentage of solar for New Hampshire to have? 

They must be super geniuses. Like Wile E. Coyote. 

That has to be it. 

We respect our legislators too much to believe that this whole RPS scheme is like kids dressing up for Career Day at school. “We get to play electric company executive today! Yay!”

Because legislators mandate specific rates for specific classes of renewable energy instead of, say, encouraging utilities to reach an overall target (with no penalties), they must know everything there is to know about energy. 

They must have knowledge that we little people cannot understand with our little minds and parochial concerns, like what will we spend less on this year so we can afford to pay the electric bill? 

Such knowledge is a gift.   

As we noted in April, University of Chicago researchers have found that RPS laws raise energy prices by 17 percent within 12 years after passage. 

We shared that study with legislators. They ignored it. The University of Chicago researchers must be imbeciles too. 

Business executives and ratepayer advocates have explained to legislators over the years that mandates such as these raise New Hampshire’s cost of living, discouraging business investment and making it harder for families and employers to make ends meet. 

But legislators keep passing more mandates. Their vision is beyond that of mere retirees and employers, with their petty concerns about grocery bills and survival in a competitive market.

As electric rates continue to rise, we common folk should resist the urge to get angry. 

Just consider the higher rates a genius tax. They’re the price we pay for living under the benevolent guidance of brilliant elites who know best how to spend the money we earn.   

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Study: Renewable Portfolio Standards raise electricity prices substantially

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Renewable Portfolio Standards increase electricity costs more than was previously believed, a comprehensive study by the University of Chicago’s Energy Policy Institute has found. Moreover, the study concluded that the costs outweigh the benefits of whatever carbon reduction RPS laws can be credited with producing. 

Measuring both direct and indirect costs, the EPI study concluded that “electricity prices increase substantially after RPS adoption.”

RPS mandates cause electricity rates to rise by 11 percent within seven years and by 17 percent within 12 years, the study concluded. And the largest burden of RPS laws falls on residential ratepayers.

“The estimated increases are largest in the residential sector, but there are economically significant price increases in the commercial and industrial sectors too.” 

Studies of RPS impacts have failed to capture the full cost because they tend to measure only the direct cost of new renewable generation, the authors of the EPI study wrote. Their review included a comprehensive examination of indirect impacts such as transmission and stranded costs.

“A particularly striking finding is that the indirect costs of RPS programs, which have not been possible to comprehensively measure to date, appear to account for the majority of RPS program costs,” the study found.

When all costs are included, the study found that RPS laws are an extremely expensive and inefficient way to reduce carbon emissions.

When the carbon reduction attributable to RPS laws is tallied, “the cost per metric ton of CO2 abated exceeds $130 in all specifications and can range up to $460, making it at least several times larger than conventional estimates of the social cost of carbon,” the study concluded. 

“This study joins a growing body of evidence that demonstrates that when climate policies favor particular technologies or target something other than the real enemy—carbon emissions—the result is less effective and more expensive than is necessary. In contrast, the global experiences from carbon markets and taxes make clear that much less expensive ways to reduce CO2 are available right now,” study co-author Michael Greenstone, director of the Energy Policy Institute and former chief economist for President Obama’s Council of Economic Advisors, said in a statement.

In New Hampshire, Senate Bill 124 would raise the state’s RPS from 25% to 60% by 2040. The study suggests that this would produce significant electricity rate increases because rates have been shown to rise along with the percentage of renewable energy utilities are required to use.

“RPS program passage leads to substantial increases in electricity prices that mirror the program’s increasing stringency over time,” the study found.

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A solar subsidy double whammy

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Technological innovation has brought solar power to the brink of market competitiveness. It will never be as reliable as a gas or nuclear plant that can run 24/7, but as a supplement it doesn’t have to be. When its price is truly market competitive, individuals and businesses will rush to build their own facilities so they can lower their bills and make money selling power back to the grid. 

We appear to be on the verge of such a transformation, as the price of producing solar power has fallen dramatically in the last half century. By at least some measures, solar generation is already price competitive. And yet the Legislature appears set to pass two simultaneous subsidies that would raise New Hampshire’s already astronomically high electricity rates for the express purpose of creating huge new subsidies for the solar industry (and hydro too).

The first subsidy was passed by the Senate last week. The amended version of House Bill 365 would expand the state’s existing net metering subsidy. Under net metering, utilities are forced by law to pay above-market rates for electricity purchased from small-scale, consumer-owned renewable power generators (think rooftop solar). 

The Senate’s version of HB 365 would allow this net metering “tariff” (read: subsidy) to apply to generators who produce up to 5 megawatts of power. (The current limit is 1 MW.) A 5 MW generator is not a home solar array. That’s large enough to power thousands of homes. Here’s a newly opened 5 MW solar plant in Egypt.)

Supporters say the bill would encourage the creation of new solar facilities. But that isn’t necessary given recent advances in solar technology. That also doesn’t explain why the bill contains a provision to allow existing power plants to convert from wholesale generators to net-metered generators in what can only be a blatant consumer rip-off. 

Most New Hampshire hydropower plants already qualify for net metering under the current 1 MW cap. But some, notably four of the hydro plants Eversource sold to Hull Street Energy last year, generate between 1 and 5 MW. The amended version of HB 365 would allow those facilities to legally reclassify themselves as net-metered generators after they fulfill their existing wholesale contracts. 

Once these hydro plants are reclassified, utilities by law would have to pay them at the default energy rate rather than the wholesale rate. The default rate — about 9 cents per kilowatt hour (kWh) — is roughly twice the wholesale rate — about 4 cents per kWh. Consumers would be forced by their own elected representatives to pay twice the wholesale price for hydropower generated by existing hydro plants. 

The New England Ratepayers Association estimates that the subsidies in this bill will cost consumers about $10 million a year. But legislators have still another plan to compound the subsidy. 

Senate Bill 124 increases the state’s Renewable Portfolio Standards. The bill would mandate that 18.9 percent of New Hampshire’s power come from new solar generation by 2040. That’s up from 0.5 percent this year. 

The double whammy, then, would work like this: The state by law forces utilities to pay twice the wholesale rate for net-metered solar power, then compels utilities to buy 38 times more solar power. 

Just like that, legislators would create a huge transfer of wealth from Granite State residents and businesses to a politically favored industry. 

Legislators considering these bills should take note of a study published this week by the Energy Policy Institute at the University of Chicago. It concludes that Renewable Portfolio Standards increase the cost of electricity far beyond the benefit of the carbon reductions they cause. The “cost per metric ton of CO2 abated exceeds $130 in all specifications and ranges up to $460, making it at least several times larger than conventional estimates of the social cost of carbon,” the study concluded.

With a retail electricity rate 60% higher than the national average, New Hampshire should be doing all it can to lower electricity rates. Instead, legislators continue pushing laws designed to raise rates even further.  

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Needless solar subsidies in HB 365 would push up electricity rates

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House Bill 365, scheduled for a Thursday vote in the state Senate, would require utility companies to pay above-market rates for solar power, thus forcing consumers to pay higher costs than necessary for electricity, the Josiah Bartlett Center for Public Policy cautions in a statement released today.
Such anti-consumer subsidies for a specific industry are not necessary for New Hampshire to encourage the development of alternative energy production. Solar technologies are approaching cost parity with more traditional forms of energy production and are increasingly able to compete without subsidies.
For example, Connecticut announced in December that it had entered into contracts with nine solar energy providers (including two based in New Hampshire) for an average cost of 4.9 cents per kilowatt hour (kWh), “which is approaching parity with the market price of energy,” the state’s Department of Energy & Environmental Protection pointed out.
HB 365 ignores this trend and would force utilities to buy net-metered solar energy at the default energy rate, which is about 9 cents per kWh. That is more than double the market price of about 4 cents per kWh.
Why would New Hampshire force its own citizens to pay more for solar power than the state of Connecticut is willing to pay?
This forced subsidy runs against the bill’s opening statement, which declares that “New Hampshire’s electricity consumers, including municipalities, manufacturers, commercial businesses, and other large users, strongly support more competitive retail options to lower their energy costs.”
Rather than encouraging alternative energy production that would compete on price, thus lowering energy costs, HB 365 would push prices higher by compelling consumers to buy solar power at above-market rates.
HB 365 represents a wealth transfer from all electricity consumers to net-metered solar energy producers. New Hampshire’s electricity rates are already among the highest in the nation. This bill would make the situation worse, not better — at a time when solar costs are falling and the case for subsidies is falling along with them.
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