inside sources print logo
Get up to date New Hampshire news in your inbox

Experts Raise Concerns of Heating Oil Rationing in New England Amid Supply Shortage

In the worst-case scenario, some Granite Staters could run out of heating oil or electricity this winter as the nation grapples with the current energy crisis, experts warn.

ISO New England, the region’s power grid operator, warned last week the tight supply of natural gas could result in rolling blackouts this winter if the weather turns unusually cold.

“The most challenging aspect of this winter is what’s happening around the world and the extreme volatility in the markets,” said Vamsi Chadalavada, chief operating officer for ISO New England. “If you are in the commercial sector, at what point do you buy fuel?”

Then came a Bloomberg report that New England heating oil suppliers are already seeing supply rationing before the winter heating season starts as supply runs short free to high wholesale prices.

“The facts are this, supplies of heating oil are historically low,” said Michael Ferrante with the Massachusetts Energy Marketers Association.

New England heating oil suppliers are trying to hedge their bets, Ferrante explained. The wholesale market is anticipating higher prices through the next few months at least with prices possibly dropping in early spring. The suppliers are responding by not buying extra oil at the current high prices.

“They’re buying ‘just in time’ inventory, just enough to meet the needs right now,” Ferrante said. But what happens if there is a surge in demand during another blast of brutal arctic cold like in 2018

“During the two weeks of Arctic cold, New England generators burned through about 2 million barrels of oil,” noted ISO New England CEO Gordon van Welie in an after-action report. “That’s about 84 million gallons, more than twice as much as all the oil used by New England power plants during the entire year of 2016.”

If there is a surge in demand, larger oil distributors would have more access to the limited supply. But what about small heating oil suppliers around New Hampshire, the one-truck operators? Ferrante conceded they might get left out in the cold.

“The smaller companies might have a more difficult time finding supply,” Ferrante said.

The current average cost of heating oil in New Hampshire is more than $5.60 per gallon. That is expected to climb higher as the weather turns colder in the coming months. With smaller suppliers frozen out of the market, Granite Staters will have a tougher time keeping their homes warm.

Spikes in the cost of natural gas, which provides the fuel for much of New England’s electric grid, have already resulted in the doubling of electricity rates for New Hampshire ratepayers. Those same ratepayers face the prospect of shelling out double for electricity and not being able to buy oil for their furnaces.

Karoline Leavitt, the GOP congressional candidate running neck and neck with incumbent Democrat Rep. Chris Pappas, blames President Joe Biden’s administration for sky-high energy costs.

“As if the $600 being stolen from families every month because of inflation wasn’t bad enough, we are all living a nightmare as we watch our energy bills soar as the weather gets colder,” Leavitt said. “We were informed that this would happen months ago. And rather than develop a solution to solve this crisis, Chris Pappas continued to vote with Nancy Pelosi and Joe Biden 100 percent of the time, exacerbating this problem to its breaking point. With families being forced to decide between heating and eating, we cannot afford another term of Chris Pappas’ partisan leadership that leaves Granite Staters hanging out to dry.”

GOP U.S. Senate candidate Don Bolduc sees a lack of leadership.

“Less than two years into the Biden presidency, we’re having discussions about rationing here in the United States of America. New Hampshire is facing a major energy crisis all due to Sen. Maggie Hassan and President Biden’s failed leadership. Not only are Granite Staters having to choose between heating and eating, but they also now must worry about energy shortages that could leave them out in the cold with no way to heat their homes. Sen. Hassan has failed New Hampshire,” said campaign spokeswoman Kate Constantini.

Both Hassan and Pappas had been pushing Biden to release more oil from the nation’s Strategic Petroleum Reserve. Though Biden announced last week he was putting more of the nation’s stockpile on the market, it is unlikely to be enough to counter the high energy prices caused by Russia’s war on Ukraine and the decision by Saudi Arabia to pump less oil to raise prices.

“It’s a short-term Band-Aid, and it doesn’t solve the long-term problem,” said Phil Flynn, an energy market analyst with the PRICE Futures Group.

Ferrante said there is no relief coming in the short term, as the war in Ukraine continues driving the energy market in Europe and beyond.

“There are no guarantees it will get better. It’s a global economy,” Ferrante said. “Prices of crude oil are affected by what’s happening around the world.”

NH Legislature Passes $42 Million Energy Relief Plan in Bipartisan Vote

Granite Staters will get help this winter paying for heat and electricity after the legislature passed a $42 million plan to fund energy assistance for the middle class. 

“New Hampshire just delivered the largest energy relief package this state has ever seen, helping families in need this winter – using our state surplus funds,” said Gov. Chris Sununu as he signed a bill passed during the “Veto Day” session Thursday.

Democrats, on the other hand, used the news to repeat the debunked claim that Sununu is responsible for setting the state’s utility rates.

“The legislation the House just passed is critical to helping Granite Staters affected by Governor Sununu’s record electric rate hikes this fall,” said House Democratic Leader David E. Cote (D-Nashua).

Utility rates are set by the independent Public Utilities Commission.

Partisan rancor ahead of the midterm elections was not enough to prevent the legislature from enacting utility relief at a time when energy costs are soaring in New Hampshire and nationwide. The 12-month inflation rate is currently 15.8 percent for electricity and 33 percent for natural gas.

The new law uses surplus New Hampshire state budget funds to expand energy assistance this year, allowing middle-income New Hampshire residents to qualify for aid. Previously, the aid was only available to households earning up to 60 percent of the state median income. Lawmakers expanded eligibility to families earning up to 75 percent of the median, who can now apply for up to $450 in heating assistance and another $200 in electricity assistance.

Sununu originally wanted to use $60 million in surplus funding to send every home $100 in energy assistance, but that plan was rejected by lawmakers who came up with a more targeted proposal.

“That seems like a meaningless political gesture to me,” Rep. Steve Smith (R-Charlestown), said of Sununu’s initial plan.

Instead, lawmakers passed their proposal that will use $25 million on emergency fuel and electric assistance, $10 million on aid for electricity bills, and $7 million on an electric assistance program. The state’s surplus will be at around $120 million after the assistance is paid out.

Rep. Marjorie Smith (D-Durham) said the bill is not a long-term solution to high energy prices in New Hampshire, but it will help.

“Maybe it’s just a band-aid, but if you scrape your knee a band-aid helps,” she said.

House Speaker Sherman Packard (R-Londonderry) said not only will the bill help people pay for heating this winter, but it does so in a responsible manner.

“The fiscally responsible leadership of the General Court of New Hampshire has produced a budget surplus which allows us to create this one-time emergency relief package that will help offset rising fuel and electric costs this winter,” Packard said. “This bill provides direct relief to those in need and reduces the anticipated burden placed upon municipal welfare programs – a cost that would otherwise be passed along to property owners at the local level. We believe these surplus funds will alleviate some of the financial pressure for NH families who would otherwise not qualify for existing assistance programs. By coming together today, we chose New Hampshire citizens over party politics.

House Majority Leader Rep. Jason Osborne (R-Auburn) blamed President Joe Biden and members of New Hampshire’s federal delegation for making inflation worse.

“Due to no fault of their own, many Granite Staters who have not previously needed assistance may find themselves unable to pay their bills this winter and do not qualify for the federal assistance programs. We want to ensure those people have some help,” Osborne said.

New Hampshire Democrats, however, point the finger of blame for rising utility costs at Sununu.

“New Hampshire has become an outlier in New England with record rate increases because Gov. Sununu has consistently rejected efforts to increase energy efficiency and production of renewable energy,” Cote said. “Granite State families cannot afford the 50 percent increase that will hit them this fall, and this bill provides temporary relief for lower-income households that are ineligible for existing programs.”

In fact, New Hampshire currently has the second-lowest electricity rates in New England and historically had lower rates than Massachusetts.

The legislature also failed to override any of Sununu’s eight vetoes.

CLINE: When It Comes To Preparing for Winter, Squirrels Think We’re Idiots

Squirrels don’t understand Thanksgiving. 

They see us loading our homes full of food for days, and they feel a sense of tribal solidarity. They get that. Then, suddenly, we sit down and EAT IT ALL IN ONE DAY. 

What are we thinking?!!

This really confuses squirrels. How will those tall, furless bipeds survive the winter?!! They just ate all their food! It hasn’t even snowed yet! THEY’RE ALL GOING TO DIE!!

Chipmunks, by the way, just hope we all die soon so they can move into the basement. 

Squirrels and chipmunks, not to mention bears, think we’re idiots because they know nothing of markets. If they wandered into a supermarket, they’d think it was a place where humans stored locally gathered food for the winter. The idea of a place where creatures trade money for food, and then more food appears the next day, brought from all over the world, would blow their little minds. 

Although bears are pretty smart, so they might figure this out one day. They can already open car doors. The inevitable next step is driving to the corner store for salmon jerky and a six-pack of honey wheat ale.  

But bears don’t do this yet. Instead, they store fat for a long winter’s nap. Sounds awesome. Unfortunately, humans can’t get through winter by lowering our metabolism and reducing our energy consumption. We increase our energy consumption to stay warm. 

We can hoard food. We could salt meats and store corn like our ancestors did, or fill our garages with canned goods, bottled water and ammo (you know who you are).

But thanks to global trade, we don’t have to do this. We can get bananas from Ecuador, bacon from North Carolina, coffee from Brazil, and crazy snack foods from Japan whenever we want.

What about the other thing that keeps us alive all winter: warmth?

Humans survive long, cold winters by building, then powering and heating, shelters. Mostly we power and heat them by burning things (oil and gas, a tiny bit of coal) or splitting atoms.

Now, New England does not supply its own oil or gas. Like those crazy Japanese snacks, our winter fuels come from far away places where people speak different languages — places like Texas and Louisiana.

One might understand that in a region reliant on importing the fuel that keeps us warm, it’s not a terribly good idea to try to hurt the people who bring us these fuels. 

And yet… 

In Boston, the new mayor has signed an ordinance requiring the city to divest from fossil fuel companies, as if the people who keep Boston habitable during the winter are evildoers. 

U.S. Sen. Elizabeth Warren, D-Harvard Faculty Lounge, portrays oil and gas companies as sinister malefactors who prey on Americans for fun and profit. Harvard also has divested from fossil fuels, by the way. 

You wouldn’t know from talk like this that natural gas generated more than 50 percent of New England’s electricity last year, or that Northeastern states consume 86 percent of the nation’s home heating oil. 

Wind and solar power, as nice as they are, generated 6 percent of New England’s electricity last year. They won’t replace oil and gas anytime soon. 

This winter is projected to be mild. ISO New England, the region’s power grid operator, expects energy use to be lower this winter than last, and our power supply to be adequate. 

Still, that prediction came with what is now an annual warning. The winter of 2017-18 brought a cold streak so long that the region came within two days of rolling blackouts. Why? Because we have put unnecessary constraints on our energy supply by blocking new pipelines and scaling back nuclear plants. 

ISO New England has a whole page of its website devoted to explaining how the region is in a dangerous position because of constraints on its natural gas supply.

A study by Carnegie Melon’s Tepper School of Business earlier this year found New England’s artificial constraints on natural gas have caused routine power plant outages and cost the region $1.8 billion during the cold winter of 2014 alone.

“Gas supply issues have affected the ability to generate electricity during times of high demand,” professor and study co-author Jay Apt said at the time. 

They recommended building natural gas storage facilities (with battery storage being another possible option). They didn’t ask the squirrels, but the squirrels would approve.

ISO New England points out that a mild winter is a time to plan for the future — because a cold winter is coming eventually. And if our economy grows, energy demand will grow with it, increasing the need for more reliable supplies. 

Building more base load energy capacity is the way to prepare for the cold winter that we all know is coming eventually. 

Some mammals, though, seem oblivious to the tremendous amount of planning, preparation, and investment it takes for their species to survive New England winters. They say we can do without more base load power and without more reliable access to the fuels that generate the lion’s share of our electricity and heat most of our homes.

The squirrels think they’re nuts.   

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.” 

A “Bridge” Too Far For Anti-Pipeline Movement In New Hampshire?

In the politically divided purple state of New Hampshire, getting 22 of the legislature’s 24 state senators to agree on anything is nearly impossible. Maple syrup, the Red Sox, sure. Maybe motherhood and apple pie (depending on where the apples are from)…but a utility company’s natural gas pipeline?

No way.

Except that’s exactly what happened. In May, all but two members of the New Hampshire state Senate—including all 10 Democrats–endorsed Liberty Utilities’ “Granite Bridge” pipeline project. Support from Republicans like Senate President Chuck Morse and Majority Leader Jeb Bradley for this 27-mile natural gas pipeline from Stratham to Manchester is hardly a surprise. But when a liberal environmental activist like Sen. Martha Fuller Clark is on board, that’s definitely news.

“Granite Bridge will make it possible to store and deliver natural gas to a greater number of New Hampshire customers, especially during a cold snap like we experienced this past winter, at a lower cost and with fewer greenhouse gas emissions than home heating oil, the current alternative,” Sen. Clark said in a press release endorsing Granite Bridge. 

Though it’s years away from final approval, the broad, bipartisan support for Granite Bridge stands in stark contrast to the reaction to most of the energy infrastructure projects in the past few months. Even renewable energy projects like Northern Pass (hydro-electric), NextEra (solar) and Spruce Ridge (wind) have been shot down in recent weeks—a fact that makes Liberty’s steady progress on Granite Bridge even more surprising.

It is also a cautionary tale for Green-action groups, showing how they can find themselves fighting alone out on the political fringe. There are still many Public Utility Commission filings, hearing and debates yet to come, but it’s not too early to ask: How did Liberty Utility and Granite Bridge come so far with so little opposition?

IT’S THE WEATHER, STUPID.

 The first thing to remember about New Hampshire and energy policy is this: It’s cold.  Really cold. Too cold, in the opinion of many homeowners, to rely on electricity for heat. In places like Florida, electric heat is fine. But at the border of Canada, many believe…not so much.

The most common home heating fuel is heating oil, used in more than 44 percent of New Hampshire homes. Propane, another carbon-based energy source, heated another 15 percent.

Heating oil is both relatively expensive and emits a relatively high CO2 output. Not only is it used to heat homes, but it also plays a significant role in providing electricity when demand is unusually high.

“During the two weeks of Arctic cold [in 2017], New England generators burned through about 2 million barrels of oil. That’s about 84 million gallons. That’s more than twice as much as all the oil used by New England power plants during the entire year of 2016,” according to ISO New England CEO Gordon van Welie. Even worse, during that cold snap, energy from coal or oil shot up from about 2 percent of New England’s grid total to 33 percent.

All this is bad news for climate activists and energy customers. How can New Hampshire, which has committed to reducing its carbon footprint even as the state’s economy continues to grow, turn this around and still meet its energy needs? One potential solution is natural gas.

While it’s not carbon neutral, burning natural gas for fuel generates less CO2 than any of the carbon-based fuel sources like coal, heating oil or propane. It’s also significantly cheaper to heat your home with natural gas than heating oil.

Which explains why even progressives like President Obama’s Energy Secretary Ernest Moniz say “Natural gas has shown itself to be an important bridge to a clean energy future.” New Hampshire state senator Clark echoed that sentiment in her statement supporting Granite Bridge:

“Increasing access to natural gas will reduce air emissions and help to fight climate change, as well as lowering our high energy costs in the short term while we work to create an energy future that will rely solely on true renewables, including solar and wind.”

The opportunity to get more New Hampshire households off heating oil and onto natural gas would seem like a win for the green movement. And yet, as Mark Perry of the American Enterprise Institute notes, “the trouble is there isn’t enough pipeline capacity to bring in natural gas from the Marcellus shale in Pennsylvania to New England in times of high demand. Even as America’s natural gas production has soared, the pipeline capacity to get it to where it’s needed hasn’t kept up.”

Holman Jenkins of The Wall Street Journal makes the same point: “New England is in the worst shape [in the nation], having killed multiple projects for new pipelines and even a transmission line to bring hydropower from Canada. Local electric prices are 50% higher than the national average. Every winter, thanks to an overtaxed pipeline network, the six-state region descends into a ‘precarious position,’ according to New England’s grid manager.”

And a 2018 report from ISO-New England is filled with references to “fuel shortages” and “fuel availability” (not to mention the possibility of brown outs and load shedding in harsh winter weather 10 years from now), all of which translates to “customers who need natural gas, but there’s not enough pipeline capacity to get it to them.”

How did New England become America’s energy-grid basket case? “Political obstacles driven by environmental groups,” says Perry.

“THE ENEMY OF THE GOOD”

“There are just so many reasons why a pipeline is just not the right choice.” So says Stephanie Scherr, founder and director of EchoAction.org, a self-described “environmental justice” organization in New Hampshire.  At a public hearing in Epping earlier in the year,  Scherr said “when we choose gas we are complicit in what happens to other people.”

In a statement to NHJournal, The Conservation Law Foundation calls Granite Bridge “a bad deal for New Hampshire residents.”

When asked about the argument made by people like Secretary Moniz and Sen. Clark that natural gas should be a bridge to renewables, Scherr bristles. “I have nothing to say about Senator Clark’s decision. I think it was a most unfortunate decision and we were very disappointed,” Scherr said.

Patricia Martin, EchoAction’s Energy Policy Coordinator, is even more direct. “I am actually quite upset that Liberty lobbyists manipulated these senators into ENDORSING [emphasis in original] the project before they’ve heard any good arguments against it or probing questions about it,” she told NHJournal via email. “Now their egos and reputations will be tied to being named in that press release as endorsing the project.”

EchoAction is part of a broader environmental movement across New England, including the Conservation LAW Foundation, Citizens Climate Lobby and others who oppose virtually all pipelines—period. “They’ve decided to make the perfect the enemy of the good, which is a shame because Granite Bridge can do a lot of good,” a source close to the project told NHJournal.

The strategy is simple: Oppose any expansion of the carbon-energy infrastructure and force New Hampshire to expand renewable energy to meet future needs.

‘I oppose any expansion of fossil fuel infrastructure,” Martin says. “If we want to transition away from fossil fuels, we need to stop expanding its usage as a first step. If you know there’s a stop sign coming up, do you step on the gas and then brake hard at the last moment?”

Echo Action plans to protest outside the New Hampshire Democratic state convention on Saturday, June 23 in response to the Democrats’ lack of fealty to their zero-carbon-infrastructure stance.

The problem is that renewables are nowhere close to covering the region’s energy needs. In a statement, the CLF says of Granite Bridge:

“Rather than lining the pockets of another utility, New Hampshire should support the many small businesses providing low-cost clean technologies like heat pumps for heating and cooling.”

But even if New Hampshire were somehow converted to an “electric heat” state like South Carolina or Virginia (remember the “it gets really cold here” part?), in 2016 the state got a mere 2.3 percent of its electricity from wind—one-tenth the amount of electricity generated from natural gas. While renewables are close to providing 20 percent of total energy consumed in New Hampshire (a figure that excludes nuclear—which makes no sense, but that’s a topic for another day), by far the largest source isn’t wind, solar or geothermal. It’s biomass. Biomass generates three times more electricity than the other three sources combined.

Not to mention the fact that these “many small businesses” all get subsidies for their biomass/electric/wind from current ratepayers, pushing the cost of electricity in one of the most expensive states in the country even higher.

The reality is that New Hampshire businesses and homeowners aren’t going to sit in dark, unelectrified buildings and wait for wind and solar technology to catch up with current demand. The lights are going to come on, the stoves are going to be lit.  Opposing smart pipeline projects won’t stop that from happening. It just means the natural gas will get to New England in dumb ways.

Like tanker ships from Russia.

Earlier this year, the left-leaning Boston Globe  ran an editorial decrying “pipeline absolutism” and urging the region’s environmentalists to end their knee-jerk opposition to all projects.

Their coverage included the story of a Russian tanker bringing liquified natural gas 4,500 miles from the Arctic to Boston because of a lack of pipelines in New England.

“Climate advocates have put short-term tactical victories against fossil fuel infrastructure ahead of strategic progress on reducing greenhouse gas emissions. They’ve obsessed over stopping domestic pipelines, no matter where those pipes go, what they carry, what fuels they displace, and how the ripple effects of those decisions may raise overall global greenhouse gas emissions,” the Globe argued. [emphasis added]

Why would environmentalists support shipping LNG (via diesel-powered tanker) through the pristine Arctic region when there’s plenty of home-grown natural gas in North America? According to the Globe, a lawyer for the anti-pipeline Conservation Law Foundation “shrugged off” the issue of Russian gas being transported to New England.

“On the plus side, though, they didn’t offend Pittsfield or Winthrop, Danvers or Groton, with even an inch of pipeline,” the Globe noted wryly.

A good way to avoid New England NIMBYism. But how is that a smart strategy for the environment?

THE GRANITE BRIDGE PROJECT

Enter Liberty Utilities and Granite Bridge. On paper, it appears to be a no-brainer. Taking advantage of the state’s “Energy Infrastructure Corridor” program, the pipeline’s 27 miles are mostly located in the Route 101 right-of-way and buried underground, thus avoiding many of the NIMBY issues that have plagued other projects.

And the pipeline will serve a densely populated area from Stratham to Manchester, where natural gas demand is going to climb with or without a new pipeline. Liberty currently serves 90,000 customers from Laconia to Nashua with a single pipeline that is nearing capacity. And that’s a problem.

“Look at what’s happened in California when you refuse to invest in infrastructure,” former New Hampshire Speaker of the House Bill O’Brien told NHJournal. “Energy, water, whatever. You can refuse to build it, but demand is going to rise. In California, they’ve got water shortages, brownouts—it’s a disaster. New Hampshire environmentalists should learn that lesson and support the right projects, not just oppose everything,” the Republican said.

And Granite Bridge also fits in with the new 10-year Energy Strategy released by Gov. Chris Sununu, which prioritizes lower rates for businesses and consumers. The project also includes a large LNG tank in an abandoned quarry near Epping. According to John Shore, senior manager of marketing and communications for Liberty Utilities, this approach will let Liberty to buy natural gas during the summer when prices tend to be low, store it, then use that cheap, stored gas to save customers money in the winter when prices inevitably spike.

“We know the price patterns in the industry and, with this storage capacity, we can use that knowledge to save our customers money,” Shore told NHJournal. If the Granite Bridge pipeline had been in place starting in 2013, this “buy gas when it’s cheap” strategy would have saved Liberty Utilities customers more than $100 million by now, according to Shore. It also provides a cushion against price instability in the natural gas market for Liberty’s customers.

Plus, Liberty is putting the LNG tank in an old quarry, where it’s both safer and out of sight.

Lower CO2 emissions, lower prices, more price stability and all hidden underground on a highway right of way.  And green activists at CLF and Echo Action are against it? To the average New Hampshire consumer, ratepayer and voter—this opposition makes little sense.

By opposing projects that have a demonstrable environmental benefit in the name of still-unavailable levels or wind and solar, the anti-pipeline forces have pushed themselves to the political fringe.

And once they’ve marginalized themselves as the “We’d rather see tankers from Russia than a pipeline from Pennsylvania” movement, how much clout with they have in Concord? Won’t it be easier for utility companies to convince lawmakers to shrug off their objections, the way the New England CLF attorney “shrugged off” the impact of their anti-pipeline stance on the pristine Arctic environment?

Granite Bridge could be a turning point for the region’s environmental stakeholders, a path for the energy and environmental movements to find common ground going forward—avoiding clearly-unpopular projects like Kinder Morgan while supporting “win/win” infrastructure proposals.

Or it could be a breaking point, driving moderate voices away from the Granite State’s environmental movement.

BREAKING: Gov. Sununu Vetoes Two Energy Bills

As first exclusively reported here at NHJournal, Gov. Chris Sununu vetoed two energy bills this morning that would have put upward pressure on energy prices in the Granite State.

“Senate Bills 365 and 446 combined would cost New Hampshire electric ratepayers approximately $100 million over the next three years,” Sununu said in his veto message.  “New Hampshire has some of the highest electric rates in the country, placing financial strain on the elderly, those on fixed incomes and the business community.  These bills send our state in exactly the wrong direction.”

SB 446 raises the limit on “net metering” of power from solar generators covered by a state buy-back mandate from one megawatt to five.  “While I agree that expanding net metering could be a benefit to our state, Senate Bill 446 would cost ratepayers at least $5 to 10 million annually and is a handout to large scale energy developers. These immense projects should use incentives already available and compete on their own merits,” Sununu said.

The other bill vetoed by Gov. Sununu Tuesday morning,  SB 365, requires utilities to buy the entire output from a group of older biomass generators at above-market rates. “It would cost New Hampshire ratepayers approximately $25 million a year over the next 3 years, on top of the subsidy for these plants that already became law last year through Senate Bill 129,” Gov. Sununu said.  “It harms our most vulnerable ratepayers and our job creators for the benefit of a select few.”

“Consistent with our state’s 10 Year Energy Strategy, I am committed to working to encourage and advance renewable energy generation and fuel diversity without unjustly burdening the ratepayers of New Hampshire,” Sununu said.

Given that both of these bills passed the New Hampshire legislature with large, bipartisan majorities,  there was some question about whether Gov. Sununu–who is up fo re-election this November–would veto them or let them become law without his signature.  For Republicans in states carried by Hillary Clinton in 2016 (like New Hampshire), the current political environment is challenging.  Vetoing bills with a green/progressive constituency carries risk, particularly given the political turmoil of the Trump era and its impact on the Republican Party’s standing.

At the same time, the Cook Political Report just revised their analysis of the NH Governor’s race from “Leans Republican” to Likely Republican.” Sununu is one of the five most popular governors in the US and he’s taken steps–like signing the transgender bill two weeks ago–to show he’s not a movement ideologue.  As Saint Anselm College political science professor Christopher Galdieri said when he signed the transgender rights bill, “He feels like he is comfortably ahead enough that he can afford to lose a few social conservative votes.”

By vetoing these energy-subsidy bills, Sununu is both advancing his administration’s pro-ratepayer approach to energy policy and reminding a traditional Republican constituency–businesses–that he’s an ally.

The only question remaining is what Sununu will do about a third bill, SB 577, which extends existing (and expensive) subsidies to the Burgess BioPower plant in Berlin. Unlike the other two subsidy bills, this one has a strong constituency of hundreds of jobs directly tied to the facility and powerful political interests like Senate Majority Leader Jeb Bradley.

Multiple sources close to the governor and familiar with his thinking believe Sununu will likely let SB 577 become law without his signature, as he did with last year’s expensive energy-subsidies bill, SB 129. This will placate the Burgess backers–the most passionate supporters of these bills–and make it less likely they will mount a successful veto override.

For opponents of “picking winners and losers,” as the Sununu administration’s 10-Year Energy Strategy puts it, these vetoes are two-thirds of a loaf. But after last year’s legislation and in the current political climate, free market energy advocates will take it.

RGGI Analysis Fails Math 101

The Analysis Group just released their review of the effects of the Regional Greenhouse Gas Initiative (RGGI), and they give it an A+.  They claim greenhouse gas emissions are falling, the state economies are growing, and renewable energy is on the rise.  RGGI must be working, right?

Only if you grade on a curve.  When you check the math, you’ll find that RGGI has no impact on emissions, has had minimal impact on improving energy efficiency, and done very little to increase wind and solar power generation.

What RGGI has done is put upward pressure on electricity rates which, in turn, has driven energy intensive businesses out of the RGGI region—along with the good-paying jobs those businesses supply.  In New Hampshire, for example, the loss of these high-wage jobs has reduced real medium household income by almost $2,000 a year, while increasing electric rates.

How can the facts be so far from the Analysis Group’s reporting? Let’s check their assumptions.

RGGI works by forcing power plants to pay for emission allowances in quarterly auctions.  The one point we all agree on is the cost of those allowances gets passed on to electric distributors and then onto ratepayers.  Between 2015 and 2017, those auctions collected about $900 million dollars—once again, all from the pockets of customers.

In their report, the Analysis Group (a paid consultant for RGGI, Inc.) assumes $800 million of that money is invested in local economies where it is leveraged by indirect and induced affects into $1.4 billion of economic impact.  But they’re using gross figures, not net.  They don’t account for the economic impact of that $800 million if it had been saved or spent by the electric customers themselves.  If the $800 million had been dropped into the economy from the sky, their analysis would be accurate. But it didn’t. The money came directly from local businesses and consumers in RGGI states who would have spent, saved or invested it themselves, thereby adding to economic growth.

That net number, alleged RGGI growth minus the loss of economic activity from ratepayers and customers, is nowhere to be found.

The other assumption is the RGGI invested revenue more than offsets the costs leading to electric bill savings, thus justifying the $1.4 billion impact estimate.  They assume energy efficiency investments should lead to lower demand, and lower demand should result in lower electric prices.

The problem with this assumption is lower electric demand can actually lead to lower power plant operating efficiencies.  For example, coal-fired power plants pay a higher RGGI allowance because they release about twice as much carbon dioxide as natural gas for each unit of electricity produced. These power plants were designed to run almost all the time.  An analysis of power plants in two RGGI states shows operating hours fall as the plants are less competitive, the plants stop and start more often, and efficiency has fallen 16 percent The result is higher costs and emissions.

Furthermore, energy efficiency doesn’t show up in a state-by-state analysis of energy intensity.  Energy Intensity measures the amount of electricity needed to support a dollar’s worth of economic production.  Between 2007 and 2015, energy intensity only improved 9.6 percent in RGGI states. In comparable states outside the RGGI agreement but with similar energy policies, it improved by 11.5 percent.  Electric demand has fallen in RGGI states, but the reduction can be traced to lower industrial demand from companies that left the region, taking jobs and $30 billion of business revenue with them.  Similarly, the comparison states created twice the amount of new in-state wind and solar generation as the RGGI states.

Even if you assume that RGGI spending is the engine behind improved energy efficiency or expanded renewables, there’s still a math problem: Relatively little of the RGGI tax revenue has been spent on energy.   For example, the New Hampshire program spends only 25 percent of revenue on energy efficiency with the rest given as electric customer rebates.  Connecticut and New York have re-directed large sums to their general funds, and Delaware simply hasn’t spent most of the money.   It’s hard to credit progress to dollars still sitting in the bank.

The Analysis Group also stated the RGGI states saved a billion dollars in fuel purchases thanks to lower energy generation.  Unfortunately, while these states generated less energy, that doesn’t mean they used less.  Instead, their imports of out-of-region electricity doubled from 7 percent to 14 percent between 2007 and 2015.  And less energy generated also means less energy to sell. As a result, New Hampshire has lost about half a billion dollars of electricity exports to other New England states. That means lost revenue and lost jobs.

When I began my independent analysis, “A Review of the Regional Greenhouse Initiative’, published in the peer reviewed winter 2018 Cato Journal, I expected to find some emissions savings for RGGI states as compared to other, comparable states.  I expected the debate would be over how big those savings were and whether they would be worth the price of distorting the energy market.

Instead, I found essentially no emissions savings can be attributed to RGGI.

The RGGI emission reductions were duplicated in the comparison states—and across the US.  Emissions cuts have come primarily from lower coal use.  I found 70 percent of the emission savings came from coal’s inability to compete with lower cost natural gas.  The other 30 percent can be attributed to US Environmental Protection Agency regulations that required expensive pollution controls be added to coal-fired power plants.  It just wasn’t worth investing in older, smaller power plants and, as a result, emissions fell.

The RGGI program is being extended from 2020 to 2030 with another 30 percent emission reduction goal, and up to six times higher allowance cost planned.  New Hampshire already met the 2030 emissions goal in 2016.  The RGGI program hurts New Hampshire’s economy with lost business, lost high paying jobs, lost income, and lost tax revenue.  After a decade there is no apparent environmental benefit from RGGI, and there has been a minimal impact on energy efficiency, and wind power.

New Hampshire’s elected officials should consider the impact on local businesses and residents, already burdened by the 3rd highest energy costs in the US, and ask themselves if it’s time to issue RGGI a failing grade and get out.

Updating New Hampshire’s Energy Infrastructure Should Be a Priority

When I ran for and served in office, it was because I wanted to bring a new, younger perspective to the political process. There were voices that I felt weren’t being heard above the noise created by the same, tired, old politics of the past. I felt that we needed new solutions to address critical issues in our state. We needed to tackle these problems to move our state and our economy forward to create more prosperity and a higher quality of life for everyone in New Hampshire — particularly for young people like me. One of those critical areas was energy.

Energy is different from most other issues dealt with in Concord, because it has the ability to touch our lives in so many different ways.

One of the great developments of the past decade has been an energy renaissance in America. Thanks to technological advances, we’re now able to produce so much energy, particularly from natural gas, that the United States has become the world’s leading producer of energy.

That’s right. We produce more than Russia, more than China, and more than the OPEC nations of the Middle East.

And natural gas is touching our lives in more ways than most people realize.

Natural gas helps to heat and power manufacturing facilities that produce busses for public transportation, components for bicycles, the clothing and shoes that we wear; it’s used in making our cell phones and computers, and the furniture, carpeting and wood floors in our homes.  It is used in making fertilizer.  And of course it cooks the food we eat.

All of this is made possible by natural gas.

On top of all of that, natural gas is improving our environment. Because it is displacing coal as an electric generator, carbon emissions have fallen to near 20-year lows as natural gas production has increased.

Clean-burning natural gas helps to empower other renewable, green energy options by providing power when the wind doesn’t blow or the sun doesn’t shine. With natural gas providing a solid foundation for our state’s energy needs, we’re able to operate with a comprehensive, all-of-the-above energy strategy that includes solar and wind power. This only serves to further protect our environment, while balancing those interests with maintaining a high quality of life for everyone in New Hampshire.

But there’s still work to be done so that our state’s economy can take full advantage of the benefits of natural gas.

The rapid expansion of natural gas production has created a problem for our state and our region. We don’t currently have energy infrastructure that is sufficient to handle the increased load of natural gas that needs to be transported and then delivered to our homes, businesses and factories as well as our electric generators.

Our energy infrastructure is out of date, and we need to make it a priority to bring it into the 21st century.

The abundance of natural gas has reduced energy costs in states from coast to coast, but because our energy infrastructure is inadequate to meet current demand, we’re paying higher than necessary energy costs.

That’s money that could be put back into our local communities, donated to charity, saved for retirement, or put aside for unexpected health care costs.

Right now, our state’s high energy costs are a significant driver of jobs leaving New Hampshire. We need to take action to make sure that these jobs stay in our state, for my generation and for everyone who lives and works in New Hampshire.

The way we begin to do that is to tackle this problem head-on. It’s time that we make updating our energy infrastructure a priority in New Hampshire and New England.

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.”

Follow Kyle on Twitter.

Sign up for NH Journal’s must-read morning political newsletter.