This was literally a high energy week in Concord. The last few days have featured some significant work on bills that relate to undoubtedly the most significant issue facing businesses today: the high cost of energy. 

The first of the major bills that had a hearing this week was SB 221.  This bill establishes a method for the reduction of electric rates through securitization of Eversource's stranded costs (primarily costs relating to the Merrimack Station mercury scrubber).

A bit of a recap is in order.  Back in the late 1990s when the electric industry was being restructured, the goal was that the tasks of generating electricity and distributing electricity should not be done by the same company.  PSNH (now Eversource) performs both of those functions, of course. At various times during the years since restructuring, the Legislature has sent differing instructions to PSNH/Eversource regarding what should happen with those generation assets.  At one point, the Legislature passed a law that affirmatively prohibited PSNH from divesting its generation, because the electricity markets were such that PSNH customers were able to buy power from PSNH more cheaply than would have been the case if they were purchasing on the open market.  In the last couple of years, the Legislature has been moving back toward divestiture, and current law authorizes the Public Utilities Commission to decide when divestiture should occur.

Eversource and a variety of stakeholders have been in discussions at the Public Utilities Commission on the divestiture issue, and one big question in particular has been what should be done with the so-called "stranded costs" relating to the scrubber that removes mercury emissions at Eversource's Merrimack Station. That scrubber was installed by PSNH at the direction of the State. If and when that gets sold, it seems almost certain that it will be at a significant loss - a loss that New Hampshire electric customers will have to pay for.

In late 2014, a settlement of that proceeding began to take shape.  Under the terms of the proposed settlement that was announced last month (and which, by the way, still has to be vetted by the Public Utilities Commission), Eversource among other things will forego between $25 and $35 million of its investment on the scrubber.  There is also a graduated rate design which is part of the settlement that will protect commercial and industrial customers so that they will not end up paying as much as they would have to pay if the payments were divided evenly between residential and commercial customers.

A key component of the settlement is the securitization which is authorized under SB 221.  This type of securitization (which provides ratepayer- backed guarantees that result in less costly financing) worked successfully in the late 1990s when PSNH was settling a restructuring-based lawsuit with the State.

The Chamber has decided not to oppose SB 221.  While we do not feel that we can offer outright support for a bill that is going to admittedly lead to some increases in energy costs in the short term, the main thing is that businesses are going to be better off if SB 221 passes than they would be if SB 221 does not pass. As Chamber President Chris Williams told the House Science & Tech Committee, SB 221 in the long-term would result in businesses paying less for energy over the coming years than they would have to pay otherwise.  So, although as bill sponsor Senator Jeb Bradley put it at Tuesday's hearing, "this bill is not the greatest thing since sliced bread," the bill will eventually produce a benefit to businesses in New Hampshire. 

A key component of the testimony that Chris submitted to the House Committee is the Chamber's urging that the Committee encourage the further use of the sort of consensus-type approach that led to this settlement. This type of approach could be effectively employed with respect to other major energy- related projects, including Northern Pass and the Kinder-Morgan gas line project.

Speaking of the gas pipeline, attention shifted on Wednesday over to the Senate Energy Committee, which held a public hearing on HB 572.  This legislation (and two amendments which also are being considered by the Committee) would create a number of new restrictions on the siting of natural gas pipelines.  The new restrictions, such as a provision found in one of the amendments that prohibits compressors and pumps from being placed within 300 yards of a dwelling, and another that in effect would create a fine of $35 million a day if there were ever any noise over 55 decibels within the boundaries of the pipeline, led several members of the Committee to ask proponents whether these amendments were about safety or whether they were really just about trying to stop the pipeline altogether.

From the Chamber's perspective, this legislation needs to be viewed in light of the necessity for New Hampshire to have access to an increased supply of natural gas.  We are never going to get a reduction in electric rates in this State without that, and it seems obvious that the creation of massive new hurdles concerning the establishment of a natural gas pipeline is just about the worst thing that we could do in that direction.  This Chamber, along with the Concord Chamber and the BIA, registered opposition to HB 572 and the proposed amendments. 

The other important issue that has taken center stage regarding HB 587 is the federal preemption issue (this is the legal principle by which federal law in a particular area trumps whatever the state might want to do there). Because interstate natural gas pipelines like this one are overseen by FERC and are subject to complex federal regulation, it seems to be clear that federal and not state law will govern here.  Some of the Senators on the Committee were clearly concerned about the possibility that the passage of this law would create unreasonable expectations in the minds of New Hampshire property owners and citizens.

This one could be voted on in Committee as early as next Wednesday.  

The House Transportation Committee voted on Tuesday to recommend that the full House kill SB 63, Senator Lasky's bill to streamline the Board of the New Hampshire Rail Authority.  Although the Subcommittee of House Transportation that reviewed this bill recommended that the bill be passed, the Committee became embroiled in a discussion about who should be on the newly-constituted board, and various versions of amendments on membership were rejected by one vote margins. 

Ultimately, it became clear that there was not going to be a majority to vote in favor of the bill in the Committee, and so the Committee voted to recommend that the full House reject SB 63.  This is not a good outcome, but we can say that there is one encouraging note that came from the discussions in the Transportation Committee: the objections in the Committee related to the details of the streamlining, and not to more basic anti-rail feelings on the part of the Committee members.  The Committee appears open to a new bill that would clear up the membership issue.