Last fall the state’s site evaluation committee gave tentative approval to Laidlaw Berlin Biomass to build a biomass plant in Berlin.
But there was one major hurdle.
The Public Utilities Commission had to approve a 20-year contract for Laidlaw to sell all that electricity to Public Service of New Hampshire.
Now that hurdle has gotten higher.
NHPR Correspondent Chris Jensen reports.
A proposed 20-year contract between Laidlaw Berlin Biomass and Public Service of New Hampshire is a poor deal for consumers.
That’s the conclusion of a new report from the Public Utilities Commission’s Office of Consumer Advocate.
In a the report, that office says the deal would conservatively cost PSNH customers at least $400 million more than if PSNH bought got its electricity at the current market price.
“It looks like there is a really significant risk that customers would be locked into making those over-market payments.”
That’s Meredith Hatfield, she heads up the Office of Consumer Advocate.
But Martin Murray, a spokesman for PSNH, says the project will help the economy of the North Country.,
“We believe there are tremendous upsides to this project.”
For example it would provide Berlin with million of dollars in extra tax money.
And it’s expected the project would create jobs in the construction and running of the facility.
Nevertheless the report filed by Hatfield’s office concluded the PUC should reject the 20-year contract.
So, did a staff report from the PUC.
Those recommendations are important because the 20-year contract is a crucial part of the Laidlaw project.
Earlier this year, after months of deliberation, the state’s site evaluation committee gave Laidlaw its approval to build the plant.
But the report carried one major condition.
The PUC had to approve the twenty year contract under which Laidlaw would sell its electricity to Public Service of New Hampshire.
It was the site evaluation committee’s opinion that without the deal Laidlaw didn’t have the financing to make the project work.
In January the Public Utilities Commission will hold a hearing on the deal.
But Friday was the deadline for state officials and interested parties to file reports about the issues they intend to raise.
One of the questions raised by those reports is why would PSNH want to pay so much more for electricity from Laidlaw than it could buy elsewhere?
Meredith Hatfield, with the office of the Consumer Advocate.
“That is a good question and after reviewing all of this testimony it is not clear to me why they proposed what they have.”
Murray, the PSNH spokesman, said the company is trying to meet its obligations to buy green energy and that isn’t cheap.
“We can buy energy at market at a very low price because it is dominated by natural gas.”
But renewable energy costs lots more, he said.
However, the Office of Consumer Advocate is well aware of the state’s green energy requirements and it still came out against the deal.
Then, there’s another puzzling part of the proposed deal, sometimes called a PPA.
“One key provision in the PPA is that PSNH has the right of first refusal to purchase the plant, so some people think that is really their goal.”
What’s odd is that state law doesn’t currently allow that.
PSNH’s Murray says the company hopes that will change.
The consumer advocate report also says the deal could drive up wood prices.
That could make life harder for existing biomass plants.
In yet another problem for Laidlaw and PSNH, six of those plants – all competitors to Laidlaw - recently asked the PUC to reject the 20-year contract.
Lawyers for the plants argue that the contract covers such a long period that the commission lacks the legal authority to approve it.
That makes it likely even if the PUC did approve the deal there would be a legal challenge that would at least delay the project.
For NHPR News, this is Chris Jensen