Every time you pay your electricity or heating bill, you’re lighting your money on fire. That is, you’re trading money for the energy released by burning some combustible material — natural gas, home heating oil, wood pellets, etc. So in effect, you’re burning your money.
That’s OK, it’s how a market economy works. You don’t make your own clothes or slaughter your own food or build your own home by hand, you pay other people to do those things. (Excepting some of you in the North Country.) When you trade money for energy, you’re basically burning money. The priority, then, is to burn as little of it as possible.
In New Hampshire, politicians keep preventing you from doing that. In fact, they continue to force you to burn more money for electricity than you would otherwise choose to burn.
On Thursday, legislators overrode Gov. Chris Sununu’s veto of Senate Bill 365. The bill forces electric utility companies to buy power at above-market rates from the state’s six biomass power plants and municipal solid waste incinerators.
The bill’s own fiscal note projected that it would cause electricity rates to rise by between $15 million and $20 million a year. So legislators knew exactly what they were doing. They knowingly voted to make you burn more of your money than necessary when buying electricity.
They’re very practiced at this. Over the years, legislators have passed one law after another to prohibit electric utilities from buying power at the lowest available price.
All of these costs add up. Here are just two examples.
A 2015 study by the Beacon Hill Institute found that New Hampshire’s Renewable Portfolio Standards would raise electricity prices by 3.7 percent by 2025, for a total impact of $70 million.
A previous biomass subsidy bill passed just last year, SB 129, also forced utilities to buy additional power from biomass plants. Its costs were estimated at around $75 million to $100 million.
To understand how these mandates make electricity more expensive, imagine you’re a cave man who needs to build a fire. Og is willing to offer you a bundle of wood he chopped himself for one rabbit pelt. Unk is offering you a bundle of organic, cured, and deodorized buffalo chips for one rabbit pelt and a handful of arrow heads.
You just need a fire. You’ve got a fresh squirrel in your deer-skin sack, you’re hungry, and you’ve got to make a new spear to replace the one you lost when that mammoth ran off with it dangling from its side. (WHY WON”T THOSE THINGS JUST DIE??) So you turn to Og.
At that moment, the clan’s code enforcement officer strides up to remind you of the clan leader’s decree that everyone has to use organic buffalo chips as a fuel source once a week. (Unk is the clan leader’s cousin.) You used wood every day this week. You’ve got to buy the dung.
You give Unk your worst arrow heads, naturally, but now you’re out all those arrow heads and will have to make more. You’re no warmer than you were before. The fire didn’t cook your meat any better. It just cost more because someone with power ordered you to support the organic dung industry.
There are other ways politicians and regulators force prices higher. They can even be politicians and regulators in neighboring states.
Across the country, electricity prices have fallen thanks to the natural gas boom. But the prices fall faster and farther in places where politicians don’t block pipeline construction. In New England (and New York), politicians and regulators have made it extremely difficult to build new pipelines.
As ISO New England has pointed out, though natural gas power generation has grown tremendously in in the last 20 years, “the natural gas pipelines that deliver low-cost shale gas into the region have not been expanded at a commensurate pace.”
Public policy is a major reason why New Hampshire has the fifth-highest electric rates in the country.
Politicians could immediately lower those rates by repealing laws and withdrawing regulations that prohibit utilities from buying power at the lowest available market price.
Instead, legislators continue to add new laws that push prices ever higher.
Utilities want to sell us power for less money. They would if they could. But the state forbids it. This needs to stop. We shouldn’t allow our politicians to force us to light our own money on fire.