February 14, 2011

NH battle over GHG emissions continues

In a sign of the significant political shift at the State House, three Republican-backed bills filed this legislative session would repeal or significantly alter three major renewable energy initiatives the former Democratic-controlled Legislature passed beginning in 2007.

While acronyms of those programs may be vaguely familiar to people in New Hampshire — PACE, RGGI and RPS — they have become the focus of a fierce political, ideological and economic battle over the proper role of government in enhancing alternative energy markets or dealing with potential climate change consequences.

Rep. Richard Barry, R-Merrimack, the main sponsor of a bill to pull New Hampshire out of the 10-state Regional Greenhouse Gas Initiative, believes RGGI is not accomplishing its environmental or economic goals and that government involvement interferes with free-market solutions. "RGGI is a stealth tax that never shows up. It's hidden on your electric bill," Barry said at a day-long committee hearing Thursday on House Bill 519. RGGI critics believe ratepayers are paying for projects that don't directly benefit them.

RGGI is a pollution-allowance cap and trade program for electricity-power-generation companies, with funds being recycled back to the state. New Hampshire joined RGGI in 2009 and it is believed to cost ratepayers somewhere between 36 cents to 40 cents a month. Gov. John Lynch said the state received $28 million in RGGI rebates while ratepayers paid an extra $11 million — most of which they would have to pay anyway because the state belongs to the regional power grid that charges RGGI fees regardless of participation. If the state withdraws from RGGI, it could lose $6 million to $13 million in funding depending on how much allowances can be sold to power-generating companies on the auction market (currently auction allowances are at an all-time low).

"Withdrawing from RGGI would be a blow to our economy and to our state's efforts to become more energy efficient and energy independent," Lynch said.

According to Conservation New Hampshire, RGGI funding contributed to creating 70 green-related jobs in the state in its first year of compliance in 2009.

The hearing Thursday drew scores of supporters and opponents of the RGGI repeal bill from around the state, including some who came to debate climate-change science. A hearing earlier in the week on changing the Renewable Portfolio Standards law — a measure requiring utilities to use increasing amounts of renewable energy sources to help the state reach a 25 percent goal by 2025 — turned into a debate over a transmission line project in the North Country to bring more power in from Canadian hydroelectric.

The renewable portfolio standards bill was essentially dropped by its sponsor before last week's hearing and received a unanimous inexpedient-to-legislate recommendation out of the Science, Energy and Technology Committee. The same committee is expected to make a recommendation on the RGGI repeal bill Tuesday.

Another bill would repeal the PACE measure passed last year to enable towns to create clean energy and energy-efficiency districts through low-interest loans for such projects for homes and businesses. The bill's sponsor, Rep. Carol McGuire, R-Epsom, said PACE is not good public policy, duplicates many existing state programs and doesn't allow the free-market process to work.

Former Democratic state Rep. David Borden of New Castle, a sponsor of both the PACE and renewable portfolio bills during his time in the Legislature, said he understands the ideological opposition to the three bills but believes they are off base.

"There's not much of an energy free market as I see it," Borden said. "All three of the bills were jobs bills and they are providing real jobs for people and it doesn't make any sense to stop them."

He said New Hampshire in particular needs to take action because it sends so much money out of state to pay for heating oil and electricity. He said the bills incorporate a public-private approach to bolster free-market alternative-energy solutions. He said this avenue is already paying dividends with decreased demand due to increased energy-efficiency methods and through a drop in solar energy cost installations due to an increase in demand.

"It doesn't do any harm to provide incentives for the free market, so it allows two solar panel installers to compete in the free market," Borden said.

In the case of PACE legislation, which is totally voluntary and has yet to be measured since it is so new, Borden finds it surprising opponents would take away local control from towns that seek to help their own residents and small businesses cut energy costs.

The fault line in the business community is not clear cut. "We have a pretty broad and diverse membership," said Michael Licata, vice president of the Business and Industry Association. "Some fully support RGGI and believe the funds have been spent appropriately. Others don't see the value and are concerned about the extra cost to their utility bills."

Licata said the PACE legislation could be meaningful to members because the low-interest loans for energy efficiency and renewable energy projects fill an access-to-capital void that members do feel.

What the BIA does oppose without reservation are further attempts to use RGGI funds, which are supposed to be for a specific purpose to increase energy efficiency and renewable energy options, as a budget balancing tactic. The Lynch administration grabbed $3.1 million of those funds last year to balance the budget.

A frequent criticism of legislation initiatives such as RGGI and renewable portfolio standards is that government is picking winners and losers. Rep. Andrew Manuse, R-Derry, a cosponsor of HB 519, said initiatives such as RGGI have "had and will continue to have a significant negative impact on the economy."

But from the perspective of a local alternative-energy business, it's about leveling an uncompetitive playing field.

"Ultimately, it boils down to how one values the allocation of their tax dollars. As someone who works in the energy field, obviously, I have a bias," said Jeff Haydock, of the alternative-energy division of the Waterline Companies in Seabrook. "In energy, there are few options. And if one doesn't use enough electricity to command purchasing power, there are no options."

Haydock said the current laws allow his company to be more competitive "with the much more heavily subsidized, and much less publicized, fossil fuel industry." He added that consumers with no options keep paying at an increasing cost. "Imagine having only one place to buy vegetables. What do you think a tomato would cost compared to what you pay now?"

During last fall's campaign, freshman Rep. Brian Murphy, R-Rye, said he wasn't aware of any voter groundswell for repealing RGGI or any energy-related bills. "I didn't hear a lot of clamoring" about RGGI, he said. "The issues were about jobs and the state budget."

But Murphy, who now holds the seat previously occupied by Borden, said he is hearing more now from constituents about the RGGI repeal — the Rye Energy Committee wants to maintain RGGI — and he is planning to take a close look at the issues before making up his mind.

"We are all concerned about the environment, but we need to have the right balance to see the long-term benefits to these programs," he said.

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