Do my elected representatives have my back? Answer: It all depends upon who YOU are. Energy policies, like so many others, have opposition forces on both sides of every issue. Sometimes it is a “business” class v. “residential” class battle; sometimes it is a “provider” v. “consumer” battle: and sometimes it is a “Big company” v. “Small” company battle. Since this series centers around “business” energy issues, assume for the most part this discussion is currently a “provider” v. “business consumer” battleground ………. and inside of that subset, we’ll go one subset further and drill down into the “provider” v. “industrial rate consumer” battleground as this is the most dynamic energy front in New Hampshire today.
People vote their elected public officials into office………..companies don’t. However, companies (and/or their executives) spend far more money supporting and influencing New Hampshire political candidates that the average voter does. On the NH citizen legislative side, where both our NH House and NH Senate members serve for the total sum of $100/year, individual citizens (voters) have equal access to their elected representatives, which as a citizen is a very good thing. However, sometimes that works against “corporate interests” in NH, at least more so that in other states. For example, in New Hampshire, businesses pay a business income tax (a high one) and people pay no income taxes. However, BIG business interests do hire lobbyists and donate a lot of money to candidates. Among the biggest businesses in the state are investor owned regulated electric utility “businesses”, and hence they hold a disproportionate share of the influence over energy policy in New Hampshire. To counterbalance the legislative “clout” of these regulated industries, our statewide business associations and local chambers of commerce need to align their own state legislative advocacy efforts toward their respective unregulated industries member’s interests……….. while leaving the regulated industries interests to be pushed by their own lobbyists for their shareholder interests. It is the responsibility of the elected Officers and Board Members of these many business/commerce groups to guarantee that this happens, and that must be well known to state legislators.
In previous blog segments we have talked about electric rates, specifically about high (compared to national averages) electric rates in New Hampshire. Higher rates are synonymous with being in New England, and more broadly speaking, the Northeast. We are where we are geographically, and that is not going to change. Where New Hampshire really comes up short (for the consumer) is our high industrial electric rates as compared to Maine and Vermont, who are our east and west competitors for attracting industrial class companies with both blue and white collar jobs. On this score, our elected government representatives and business representatives have specifically failed (i.e.-not been successful) in advancing energy policies that could keep NH industrial companies competitive with ME and VT companies when it comes to electricity rates. More has to be done in New Hampshire to keep our high intensity (electrical) energy industries in the state. There are numerous proposals/actions that could be passed into law to directly help this vital subset of our business economy. Some of those initiatives will require legislators to choose support for regular private company interests overs those of the “regulated” public utility company interests, if New Hampshire is to retain or attract certain kinds of industrial operations in our state and the jobs that go with them.
Here are a couple examples of 2017 “DRAFT” proposals that could have been advanced this year, but were legislatively passed over for consideration in deference to bigger utility corporate interests in building Electric Transmission lines and Natural Gas pipelines:
1) NH TAX CREDITS FOR INDUSTRIAL CLASS ELECTRIC CONSUMERS
Legislation would provide for sun-setting tax credits for the targeted class of industrial electric ratepayers to construct/install self-generation. NH credits would be in addition to the Federal tax credits available for the same projects.
PURPOSE: To lower the payback period to purchase and install self-generation for industrial class customers in order to encourage those investments.
2) CHANGES TO CHAPTER 362-A LIMITED ELECTRICAL ENERGY PRODUCERS ACT
Legislation would expand access to in-state renewable energy sources for in-state retail sales.
PURPOSE: To expand the growth of in-state private Distributed Energy Resources (DER) and facilitate access to these lower cost resources for Industrial and Municipal consumers.
However, sometimes its good when the legislature votes to not pass proposed changes , as this NO vote can be equally as important to the same customers. This was the case recently when a NH House committee failed to pass SB128, as approved by the NH Senate. This legislation, in its current form, may lead to increases in energy costs in the future if energy supply “competition” is diminished, and regulated utilities choose to add their own capitalized projects into the rate base. Consumers do NOT have the upper hand at the NHPUC. Utility companies have the upper hand at the NHPUC and that is unlikely to change, as one group has far more financial resources at their disposal than the other. Litigating at the NHPUC is simply not a fair fight …….. not conjecture, just a reality demonstrated by history.
Hopefully, in 2018, we may see a greater appetite by our legislative and business leaders to advance changes that have a clearer and more immediate cost benefit to energy consumers than we saw demonstrated in 2017. As we have previously articulated in our earlier blog posts, New Hampshire is almost certain to continue to see higher than national average energy rates across all non-indigenous fuel options, due to the added costs of transporting those commodities into the region. This is compounded by higher than average regional (ISO-NE) transmission and distribution costs. However, that does not mean that New Hampshire is incapable of crafting its own plan …….and unique approach to lowering (or slowing the increase of ) the total costs of energy to industrial consumers on a annual basis. Rates are very important, but the actual total bill is what gets paid each month. As a “small government” state, we have the ability to implement strategies that meld together the best of what free enterprise and government can accomplish …… if we have the collective will to put our industrial consumer’s interests first.
There are achievable win-win solutions to be found inside of New Hampshire if we all pull in the same direction. Failing the passage of targeted industrial initiatives, like those examples above, it would take a very BOLD action, such as a comprehensive re-balancing of all three electric rate structures (industrial, commercial, and residential), to bring down the state’s industrial electric rates. Again, since people vote their elected officials into office, it’s highly unlikely there would ever be the political will to lower industrial rates while increasing residential rates to get there, even though that might be precisely what is needed to compete with Maine and Vermont.
Here is a recent open letter from one of New Hampshire’s large manufacturers with big energy loads……..asking for solutions:
An open letter on NH’s pressing energy needs
We must do something now to reduce costs, increase availability
To: Government officials and citizens of New Hampshire
New Hampshire is facing a crisis that is growing bigger every day!
The crisis is the availability and cost of energy. New Hampshire is the most expensive state in the nation for energy. This huge
energy cost and availability issue will soon have a very serious impact on the state of New Hampshire in maintaining the
manufacturing base of its economy.
Manufacturing contributes significant amounts of tax dollars to support the state. It also pays high (if not the very highest) wages to
its employees. To do either of these, manufacturing is going to need to reduce its energy costs, or we will gradually find these
companies moving to other states that can and will supply manufacturers with the required energy for as low as 25 percent of what
it now costs in New Hampshire.
The unwillingness or the inability of our elected officials at all levels to stand up and get something done really upsets me.
We have heard a lot about Northern Pass. In order to satisfy a small minority of the people in this state, we have more than doubled
the cost of Northern Pass construction, reduced the amount of power it will transmit, and will likely increase the cost of electricity,
not reduce it as it was promised to do.
So that solution now does not help manufacturing, and we may very well see the same thing for those who could use less
expensive natural gas with a pipeline. Both of these solutions should have been done many years ago.
Our elected officials had better look at what is good for the state and jump on the bandwagon that will benefit the state.
Representing the wishes of a very small minority and ignoring the needs of the working people is not a good political approach.
The working people in manufacturing need energy to keep their jobs, or we will see a rapid reduction in manufacturers in the state.
Manufacturers supply a large majority of the tax dollars. That tax revenue will disappear, and New Hampshire will be faced with
having only a sales and income tax, and that benefit will soon disappear.
Please put the pressure on the elected officials to get something going that will drastically contribute to reducing energy costs and
increase its availability.
John F. Olson
Executive Vice President
To their credit, Whelen Engineering has forged ahead (using their own capital) to undertake several biomass projects , with help from Froling Energy , to reduce their costs of energy in order to stay competitive in their markets and keep jobs in New Hampshire:
Cast Study Available: FEPR – Whelen Engineering Bsm
NH State House
Biomass Boilers – Froling Energy