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Pipeline Policies, Green Politics Could Mean ‘Controlled Power Outages’ in New England

New England’s power grid won’t be able to sustain itself through a prolonged cold snap this winter, as fuel for generating electricity and heating homes becomes more expensive and more scarce, the grid’s operators warned Monday. The result could be “controlled power outages” leaving some Granite Staters in the cold and dark.

During a press briefing on the upcoming winter’s outlook, ISO New England president and CEO Gordon van Welie said when temperatures fall to the extreme, the region’s electric generation system relies on liquid natural gas (LNG) and fuel oil to power the grid. 

“In recent years, oil and LNG have filled the gaps when extended periods of very cold weather have constrained natural gas pipeline supplies,” van Welie said. “Higher prices globally for these fuels, as well as pandemic-related supply chain challenges, could limit their availability in New England if needed to produce electricity this winter. The region would be in a precarious position if an extended cold snap were to develop and these fuels were not available.”

So precarious, in fact, they could result in rolling blackouts.

One reason is the limited supply of natural gas via pipelines, which are the safest and most reliable way to move fuel. Policies in the blue states of New York and Massachusetts have all but blocked New England’s access to more of the abundant natural gas available from Pennsylvania, which produces more than a fifth of the nation’s supply.

Another issue is the global energy market, van Welie said, as Europe and Japan become more reliant on LNG. With prices for LNG in Asia and Europe nearly double what it is in New England, it makes sense that most LNG producers are shipping their supplies overseas.

“These limitations are in addition to typical logistical challenges, such as inclement weather, that can affect fuel deliveries into the region,” van Welie added. “A national shortage of truck drivers may also affect the speed at which some generators can replenish their fuel supplies, as the trucking system is shared by multiple industries, including commercial and residential heating and electric generation.”

Efforts to address this challenge by either building more power plants or natural gas pipelines have been blocked.

The net result is New Englanders pay some of the highest energy prices in the nation for power from a grid that’s under ever more stress. Five of the top 10 states for highest electricity rates in the continental U.S. are in New England. (Maine is number 11.)

Across the nation, home heating oil prices have risen from an average of $2.55/gal to $3.55/gal today. Propane prices have jumped from $1.88/gal to $2.71/gal in the past year.

New England is expected to see a mild winter during the 2021-22 season. However, according to van Welie, weather is uncertain and extreme cold snaps are not out of the question given climate change. And, he noted, the region came within days of running out of fuel in the winter of 2017-18, he said.

Peter Brandien, ISO New England’s vice president of system operations and market administration, said the COVID-19 pandemic is also playing a role. More people working from home means more power consumption, as more individuals turn a spare bedroom into an office rather than sharing a common space with many other people. And now more businesses have reopened and are using power, too.

“It’s a double whammy,” he said. “We’re trying to get everyone to understand the issues.”

Brendien said ISO New England will be issuing 21-day forecasts for utilities and governments to be able to make better choices about power needs in advance. One emphasis will be urging conservation during extreme weather. Brabdien said people could be encouraged to turn down their thermostats and limit using appliances like washing machines and electric stoves during cold spells. 

If not, controlled power outages are not out of the question.

“We operate in winter very close to the edge here in New England,” van Welie said. “The 15 million people in New England need to understand the precarious position we are in when we have an extended period of extreme cold weather.”

Van Welie acknowledged alternatives to fossil fuels are necessary, but there needs to be a plan in place. Hydroelectric power from Quebec could be part of the solution, but it’s not the complete answer, he said. The region needs to consider investing in a system that allows for up to two weeks of power generation using a source that doesn’t need to be imported. 

A modular nuclear reactor could take care of the problem, he said, but in the current political climate is unlikely to get approved. Green fuels, like green hydrogen, are prohibitively expensive. That means power generators need LNG and oil to bridge the gap, and those power plants need to have a reliable reserve.

“Lots of actions have been attempted over the years. Unfortunately, we still haven’t solved this problem,” van Welie said. “The region needs a more robust solution than what we have.” 

Will Energy Policy Politics (Finally) Heat Up in New Hampshire?

The U.S. government just told American households should expect to see their heating bills jump as much as 54 percent over last winter.

The many Granite Staters who rely on heating oil and propane could wind up spending $500 more to heat their homes this year, it reported.

Here in New Hampshire, a state that already pays the fifth-highest electricity prices in the continental U.S., the New Hampshire Electric Cooperative (NHEC) announced an overall bill increase for most residential members of about 17 percent starting next month.

New Hampshire’s Consumer Advocates Donald M. Kreis says “Your electric and natural gas bills are about to go up, substantially, and you are not going to be happy about it.”

State Rep. Michael Harrington (R-Stafford) a former member of the Public Utility Commission (PUC) agrees. “Regrettably, Don is correct. Rates are going way up this winter,” he told NHJournal.

And that’s on top of a 30 percent surge in the cost of gasoline in the past year, from $2/gallon to around $3.10.

That’s a lot of economic pain, which would traditionally mean an opportunity for political gain. So, why aren’t any New Hampshire politicians talking about energy prices?

It’s not hard to make the case that New Hampshire’s congressional delegation is on the wrong side of the issue. The top reason for rising prices is the lack of access to natural gas, and New Hampshire’s federal legislators are supporting policies to restrict natural gas production.

“In New England, most of our electricity is produced by burning natural gas,” Kreis notes, observing that on a typical day, “56 percent of the electricity in New England was being produced by natural gas generators.  So when the price of natural gas goes up, our electricity rates increase as well.”

That is certainly the case for co-op customers. “Natural gas and electricity prices in New England are closely linked,” said Brian Callnan, NHEC Vice President of Power Resources & Access. “As the price of natural gas has risen over the past several months, so has the cost to purchase electricity to serve our members.”

Natural gas prices are soaring in part because we had a relatively warm summer. Gas that would have been stored for the winter was used to generate electricity for AC. But they’re also rising because global demand is surging, while the Biden administration and Democrats in Congress are discouraging natural gas production and transportation.

Pipeline politics are popular among Democrats. On his first day in office, President Biden issued an executive order canceling the Keystone XL pipeline. In July, Dominion Energy and Duke Energy announced they were canceling the Atlantic Coast pipeline due to “legal uncertainty” in the face of repeated challenges from progressive pipeline opponents. And the plug was pulled on the PennEast pipeline just months after winning a major victory before the Supreme Court for similar reasons.

Then there are the restrictions on production. “Under the Biden administration, no new drilling has been allowed on federal lands,” Harrington says. “Remember, the Bureau of Land Management owns about 10 percent of the land west of the Mississippi River. So over the past eight months, existing wells have closed, as all wells do eventually. But unlike last year, new ones didn’t open. As this continues, prices for natural gas will continue to go up.”

If this looks like a perfect storm of pain for energy customers, the forecast is actually worse. The Build Back Better plan backed by Sens. Maggie Hassan and Jeanne Shaheen includes huge increases in energy costs for consumers, according to analysts. A big one is the $150 billion “Clean Electricity Performance Program,” which will raise costs on utilities that don’t increase their level of carbon-free electricity each year.

That, in turn, will force Granite State utilities into price competition for that in-demand power and costs are all but certain to rise — thanks to policies pushed by Democrats. Those policies can be defended as part of the fight against climate change, but it’s hard to argue they aren’t adding to consumers’ costs.

If you’re a member of Congress running for re-election, this is not an argument you want to have. And in the past, Reps. Annie Kuster and Chris Pappas, along with Hassan and Shaheen, have largely been able to avoid the most extreme green politics in their party. The “Green New Deal” resolution in the House has more than 1oo cosponsors, but none of them are for New Hampshire. Hassan and Shaheen have repeatedly refused to take a position on the legislation, either.

But if the expensive green policies currently in the Build Back Better reconciliation bill are still there when Democrats pass the bill, the Granite State’s delegation will have no place to hide.

 

Two Energy Issues Facing the NH Legislature Under Gov. Sununu’s Term

It’s New Hampshire Energy Week in the Granite State. Throughout the week, lawmakers and energy policy advocates discussed some of the challenges facing the state, solutions to solve these problems, and important pieces of legislation coming up in the next two years.

Under the Republican-controlled Legislature, it’s not exactly clear what energy policy issues the GOP leadership and Gov. Chris Sununu are going to prioritize, but there are some interesting bills that could come up for a vote during Sununu’s term.

Here are two controversial energy bills in front of the Legislature this session:

 

REPEALING RGGI

Rep. Michael Harrington, R-Strafford, is sponsoring House Bill 592, which would end New Hampshire’s participation in the Regional Greenhouse Gas Initiative (RGGI). RGGI is a cap-and-trade program where utilities pay for carbon dioxide emission allowances. This serves to control and reduce greenhouse gas emissions. The funds from these allowances are used for energy efficiency projects and ratepayer rebates.  Currently, eight other states in the Northeast participate in the program. New Jersey was also a member of RGGI, but pulled out of the program in 2011.

This bill has been opposed by pro-energy and environment groups like the NH Sierra Club and the New Hampshire Sustainable Energy Association (NHSEA).

“Repealing RGGI would be a mistake for New Hampshire in terms of our economy, our environment and our public health,” said Michelle McCarthy, campaign organizer of Environment New Hampshire, at a hearing on the bill in February in front of the House Science, Technology and Energy Committee.

Opponents of the bills point to an Abt Associates report that was released in January, which estimates that the state avoided $100 million in higher health care costs by reducing pollution. They claim that since RGGI’s inception in 2008, electricity prices have decreased in the participating states by 3.4 percent, while costs nationally have increased by 7.2 percent.

Supporters of pulling out of RGGI say New Hampshire still has some of the highest energy costs, especially for commercial and industrial companies. With high energy costs, businesses are looking to move or expand in other states.

“This is not rocket science, and companies like Sig Sauer are doing the math and realizing it’s cheaper to move jobs out of New Hampshire to cheaper-power states,” said Greg Moore, state director of American’s for Prosperity, at the hearing.

In December, Sig Sauer announced it was expanding its operations in Arkansas, and New Hampshire’s high electric rates was a motivating factor. The company is still retaining its offices in the Granite State, though, and it was announced this year that the company was awarded with a whopping $580 million, 10-year contract with the U.S. Army to manufacture its pistols.

A University of New Hampshire research study released Tuesday determined that New England does not need to increase energy use to continue to grow its economy.

“It is important to prevent further increases in the cost of energy and ideally to reduce the overall cost of electricity in New Hampshire, especially for customer groups adversely affected by the state’s relatively high electricity prices, including more intensive commercial and industrial users as well as low-income households that pay a greater portion of their income for energy,” the researchers noted.

Kate Epsen, a member of the NHSEA, said it’s time to quash the belief that just because of New Hampshire’s energy prices, businesses are leaving or not coming to the state.

“We hear a lot of clamor over these high rates, but the bottom line of the bills people receive is that they are the same or lower than the national averages,” she told NH Journal. “We need to weigh the risks versus rewards of a single, very large type of project or more energy efficient technologies that are more broad based and keep jobs and dollars in the state economy.”

Epsen alluded to the ever controversial Northern Pass project — the 192-mile proposed hydroelectric line from Canada to Deerfield. Proponents of the project says the power would reduce energy costs for residents and businesses, but opponents cite possible environmental issues from putting the lines underground to high towers ruining New Hampshire vistas and impacting tourism. The state’s Site Evaluation Committee (SEC) is expected to decide in the fall if the project will move forward or not.

However, Moore and supporters of RGGI agreed that perhaps the program shouldn’t be repealed, but could be made better to fit New Hampshire’s needs.

He said all the money collected should be rebated to customers, which could save homeowners $1.3 million a year and commercial and industrial customers could save $2 million.

Catherine Corkery, chapter director of the NH Sierra Club, said the program should be made better, not eliminated.

“The politically motivated repeal bills are putting the program at risk every year, making it unstable and difficult for users to rely on,” she said. “Repeated repeal threats exhaust resources and delay helping people.”

The bill has been retained in committee, meaning after working on the bill during the summer months, it could come up again for a vote in the next legislative session. A complicating factor to the debate is the federal Clean Power Plan (CPP), former President Barack Obama’s initiative to reduce carbon dioxide emissions. RGGI currently satisfies the federal requirements for the plan, yet President Donald Trump has pledged that he would dismantle CPP and could do so as early as next week.

Sununu indicated on the campaign trail that he would consider withdrawing from RGGI, but only if other states also left.

 

REPEALING ELECTRIC RENEWABLE PORTFOLIO STANDARD

House Bill 225 would repeal the state’s renewable portfolio standard (RPS), which would require 17 percent renewables to be used by the state’s utilities this year. Those renewable energy sources include wind turbines, hydroelectric dams, solar panels, and even biomass plants.

If a utility does not meet its quota for renewable energy, it must make payments to the renewable energy fund, which is then spent on grants and rebates for individuals and businesses working on renewable energy projects.

New Hampshire’s RPS sets annual targets for electricity providers, and they meet targets by earning renewable energy certificates (RECs) for selling renewable power to retail customers. They can also buy RECs from other providers to comply.

Supporters of a repeal say renewable energy is more expensive than other energy sources, so the RPS forces consumers to pay for more expensive electricity. When utilities do not buy enough renewable energy, they essentially pay to subsidize more renewable energy projects. Due to these subsidies, there is little incentive for renewable energy sources to lower their prices. The legislature has also used money from the renewable energy fund to pay for unrelated budget items in the past.

Supporters of the RPS argue the law is necessary to ensure the development of renewable energy. A shortage of natural gas in New England caused electricity rates to spike over the winter months, highlighting the need for more diverse and renewable energy sources. Grants from the renewable energy fund also contribute significantly to the North Country economy, for the biomass and forestry industries.

Rep. Bart Fromuth, R-Bedford, sponsored a similar bill in 2015, but the House tabled it. However, the bill with an amendment was passed by the House in a Thursday executive session.

The Citizens Count, NH’s Live Free or Die Alliance — a nonpartisan organization looking to give citizen’s a voice in their local government — conducted a Facebook survey of New Hampshire residents on their support for the bill in January.

Approximately 55 percent said they were opposed to repealing the RPS, compared to 45 percent who were in favor of repealing, the survey found.

Senate Majority Leader Jeb Bradley has been a leading voice of energy policy in New Hampshire. He said he understand the concern of high energy prices, but doesn’t believe the bills repealing RGGI and RPS will ultimately pass.

“When all is said and done, the current laws will largely stay in place,” he told the Associated Press. “What we need to do in New England is to site new sources of generation in a way that protects people’s property values and their rights. That is a tough needle to thread.”

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