The long-awaited vote on SB 221 by the House Science and Tech Committee finally took place on Tuesday.  By an overwhelming margin (18-1), the Committee voted to recommend to the full House that SB 221 be adopted with amendment.  The Speaker of the House was in the committee room for the vote, an unusual step that underscored the commitment of House Leadership to the passage of SB 221 and, in a more general sense, the need to take action to get a handle on rising electric rates.

The amendment approved by the Committee was intended especially to clarify that the Public Utilities Commission retains the power to review and either approve or reject the overall settlement reached between Eversource and the stakeholders.  As we have noted before, SB 221 chiefly addresses just one aspect of the settlement, the electric rate reduction financing mechanism. The Committee made it clear that it does not intend that approval of SB 221 automatically means that the PUC must approve the overall settlement. So if SB 221 passes the House on Thursday and if the Senate approves the amendments and the bill is signed by the Governor, the scene of the action will shift over to the PUC.

As we have said previously, we think that the passage of SB 221 makes sense, under the circumstances as they exist. The bill is expected to produce electric rates that will be lower than the rates we would be faced with if the bill were not to pass.  However, we still have to keep our eye on the ball: the really important work is not just to find some beneficial impacts on the margins, but rather to substantially increase energy supply and significantly reduce electric rates in this state.

On a directly related note, the Senate Energy Committee voted on Wednesday to pass an amended version of HB 547, the legislation that would create some significant new hurdles for natural gas pipelines in New Hampshire. The Committee voted to pass an amendment that is missing some of the biggest problems that were contained in other proposed amendments (such as crippling and absurdly high fines for even the most minor violations of the strict requirements established in the legislation). The amendment authorizes the Site Evaluation Committee to adopt rules covering a number of areas (even though there was testimony at the hearing on the bill that gas pipelines are regulated by FERC and that federal rather than state laws will govern here). We have noted previously that we are opposed to HB 547. As a state, we have to get away from the practice of changing the laws every time a new energy project is proposed. What sort of message does that send?

Yesterday, the full Senate voted to pass the Senate's version of the State's capital budget, and as you know from last week's Advocate this version did not include money for preliminary work on the Capital Corridor commuter rail project. Senator Bette Lasky introduced a floor amendment to put that money back in the bill, but the amendment failed by an 8-14 margin. Thank you to Senator Lasky for her indefatigable help on this issue. We will continue to work on making this project come to fruition. This is by no means the last stop on the line.

It has been a while since we reported on the action by the Senate earlier this year to approve reductions in the business profits tax (SB 1) and the business enterprise tax (SB 2). These bills were approved by a majority of the Senators, but once approved they were immediately placed on the table in the Senate and were not sent over to the House.  This procedural move was done precisely so that the tax reductions could be included in the State budget at this point in the process, when the Senate had a better handle on the state revenue outlook for the coming biennium.

Early yesterday, the Senate Finance Committee approved amendments to the state budget trailer bill (HB 2) which, among many other things, would enact these tax reductions in somewhat altered form. The new amendment keeps the same numbers but changes the implementation dates so that the reductions are phased in from 2016 to 2019 (SB 1 and SB 2 started the phase-in in 2015). The HB 2 amendment brings the BPT down to 7.9 percent and the BET to .675 percent by 2019.

The theory behind the reductions, as articulated by Senate President Chuck Morse during the Committee deliberations on Tuesday, is that the business tax reductions are necessary in order to incentivize and stimulate business development in New Hampshire. Senate Democratic Leader Jeff Woodburn opposed the cuts as measures that will reduce state revenues, but Senator Morse called the tax reductions as important as the restoration of the social services funds which the Senate Committee was able to achieve in this budget, because in his view the stimulation of the economy will actually lead to increased tax revenues for the State.

This piece of the budget unquestionably is going to pass the Senate this week, along with the rest of the budget amendments that were approved by the Finance Committee. We will see what the House thinks about all of them pretty soon when the budget committee of conference meets in the middle of June.