Defenders of continued taxpayers subsidies for the Burgess Bio Mass Generating Plant continue to play fast-and-loose with the numbers, and with taxpayer dollars.
Prior to construction, Burgess pursued and obtained a purchase power agreement with Eversource. The contract contained a strike price of $0.08 per kilowatt hour (KWh). Over the 20-year length of the agreement, Eversource would buy the output of Burgess and charge or credit Burgess based on where wholesale electric rates are at the time of purchase relative to that price.
For example, if 10,000 kilowatt hours were purchased when the wholesale price was $0.10/KWh, $200 would be credited to Burgess. If, on the other hand, the wholesale price was $0.06/KWh Burgess would be charged $200.These credits and charges are passed directly onto the ratepayers. When the net amount owed to the ratepayers exceeds $100 million, Burgess was supposed to start paying it back.
The problem is that the wholesale price has been substantially lower than $0.08/KWh the majority of the time the plant has operated. For example, the wholesale price during last January, which was historically high, was just $0.05/KWh.
Now Burgess owes the ratepayers almost $150 million. All under an agreement they sought and signed with a public utility and its ratepayers.
House Bill 142, backed by Burgess and its allies, is yet another bailout. Instead of paying its bill, ratepayers would be expected to write off $48 million. Worse, it would leave this contract in place, allowing Burgess to continue to operate as they have been, racking up more and more charges, and with no plan to pay them off.
When asked at the hearing how they planned to pay off the future shortfalls, Burgess offered no plan. Instead, a state representative said supporters of the current arrangement plan to be back next session asking for yet another bailout. It’s a familiar story in the state house. Last year Burgess was given 18 months to come up with a plan but the only thing offered was more ratepayer subsidies.
HB 142 will lower the amount owed to ratepayers but it won’t change the economic fundamentals. The strike price of $0.08/KWh is, and most likely will continue to be, much higher than the wholesale price. And Burgess will continue to rack up more debt with no plan to pay it back.
A recent news article reported that “ratepayers could be on the hook for $100 million in payments that Eversource has made to Burgess according to supporters of the owners.” This is completely false.
If the plant goes bankrupt, the ratepayers will owe Burgess nothing. Instead, they’ll finally be freed of paying millions in subsidies for a facility that simply doesn’t make any fiscal sense for the state of New Hampshire.
We must hope that Gov Sununu will stop the bleeding and veto HB 142