By Barbara Tetreault, The Berlin Sun
CONCORD — The future of the Burgess BioPower biomass plant in Berlin is now before the state Senate. The Senate Energy and Natural Resources Committee heard testimony Tuesday that passage of a bill that would forgive about $50 million in overmarket rates the plant has received is vital for its survival and the economy of the North Country.
Sarah Boone, vice president for public affairs for Burgess BioPower, testified that passage of House Bill 142 bill is necessary for the 75-megawatt plant to avoid bankruptcy. Berlin Mayor Paul Grenier said the biomass plant is Berlin’s largest taxpayer and its bankruptcy would have a devastating effect on the city’s future. By providing a market for lowgrade wood, Grenier said the plant is also critical to maintaining the private timberlands that fuel the region’s outdoor recreational economy.
The committee heard strong testimony in favor of the bill, which passed the House by a large 269-109 margin but there was also opposition. Others took a neutral position but questioned whether the bill is simply a short-term solution and the underlying power purchase agreement needs to be renegotiated.
Under its 2010 purchase power agreement with Eversource, Burgess BioPower has been receiving above-market rates for the power produced by the biomass plant. Burgess BioPower reached the total $100 million cap for the rates in 2018 and the legislature agreed to allow the higher rates for three more years. But Burgess BioPower believed it would not have to repay the additional overmarket rates while the N.H. Public Utilities Commission interpreted the legislation as requiring the company to repay the additional charges which total almost $50 million. Last year the legislature voted to allow the plant to continue operating under its existing model for another year to allow the Department of Energy to do an audit as the parties work towards a permanent solution.
State Rep. Michael Vose of Epping, the main sponsor of the bill as chair of the House Science, Technology, and Energy Committee, said the legislature created the problem by interfering in the power purchase agreement in 2018. He said the House bill would forgive the $50 million.
“We felt it was the right thing to do since we created this problem in the first place, we would fix the problem by forgiving this obligation to repay that is essentially what House Bill 142 does….,” he said.
But going forward, Vose said the existing purchase power agreement would govern what happens between Eversource and Burgess BioPower.
Berlin and Burgess Biopower officials make their case
Grenier said in addition to being Berlin’s largest taxpayer, the biomass plant is also the city’s largest water customer and represents 12 percent of the wastewater department’s revenues. Grenier said the bankruptcy of Burgess BioPower would likely force the city into receivership as well.
The plant purchases 800,000 tons of low-grade wood annually and Grenier noted it helps replace the market for such wood that used to be filled by the paper industry in New England. He said it allows large landowners to manage their forest lands and reminded the committee that much of the North Country’s recreational activity takes place on that privately owned land.
Grenier also argued the biomass plant provides homegrown power at a time when energy costs have skyrocketed. He said letting the environmentally state-of-the-art facility shutter would not be in the best interests of the state’s ratepayers.
Boone told the committee the Burgess BioPower plant is the fourth largest power generator in the state and the largest renewable energy generator. She said the plant produces enough energy to power 67,000 homes or 10 percent of the state’s homes. Boone emphasized the biomass plant produces baseload power that runs on a local fuel supply instead of out-of-state gas or fossil fuels.
She said Burgess BioPower generates nearly $70 million in economic activity annually, creating 240 jobs. Boone said that activity is spread across the state as they purchase wood from 154 communities in all ten counties.
Jasen Stock, executive director of the NH Timberland Owners Association, said having a biomass plant like Burgess BioPower is critical for the forest products industry by providing markets for lowgrade wood. He pointed out that the forest products industry is a $2.5 billion industry in the state and said Grafton, Carroll, and Merrimack Counties are the three top producers of biomass.
Stock said the power produced by the biomass plant literally comes from our backyards and neighbors and is not imported offshore. He noted that some of the state’s sawmills produce one to two truckloads a day of chips that currently go to the biomass plant. Without the plant, he said those chips would become a management problem.
Opposed to passage
Business and Industry Association policy director Kristen Koch said the bill “artificially inflates energy prices to preserve one business.” Koch said while the overcharges result in an additional approximately $3 a month for Eversource residential ratepayers, the cost is much higher for commercial and industrial ratepayers. She said the BIA worries the impact on business rates will cause companies to look at other states for expansion instead of creating jobs here.
Recognizing the biomass plant’s importance to Berlin, Koch said her organization is willing to work to find an alternative way to support the city and foster economic development there.
Catherine Corkery of the NH Sierra Club said her organization opposes the bill. She said the $50 million paid by ratepayers could have been used for all sorts of things in the renewable energy field. Instead, the $50 million is being forgiven. Corkery said biomass plants are not an efficient energy source and noted that 40 percent of the low-grade wood comes from outside the state.
Meredith Hartfield of the Nature Conservancy said her organization is taking no position on the bill but opposes writing off the $50 million, believing it sets a dangerous precedent using ratepayers’ funds. She questioned whether the bill provides a long-term solution and predicted the issue will be back before the legislature if no changes are made. Hatfield said the conservancy favors the legislature giving the parties and the N.H. Public Utilities Commission more direction to look at other ways to use the power for ratepayers’ benefit.
Is there a long-term solution?
Tom France, of the state Department of Energy, said his agency’s audit of Burgess BioPower indicates passage of HB 142 will provide “some shortterm breathing room” for the facility but over time it will continue to struggle to stay under the $100 million cap. He said the facility was making money earlier this winter but energy markets have since dropped.
Grenier was asked for his advice on a long-term solution to make the biomass plant sustainable and about the possibility of the city forming a community power coalition to purchase power from Burgess.
He replied that the power purchase agreement requires Eversource to purchase all the power generated by the biomass plant.
“My preference would be to strongly encourage Eversource to sit down with Burgess. And, you know, look at the contract. And I think there are areas where there could be some synergy in making this work,” he replied.
Boone said the plant operates with “relatively narrow margins” and is prepared to navigate within them going forward. But she said the facility would want to work to see if there are adjustments that can be made in the power purchase agreement to make it more manageable to operate within those margins.
Boone said the uncertainty over the plant’s future has hindered efforts to attract companies to co-locate on the company’s 69-acre site. Currently, she said there is a bio-char facility that is interested in locating alongside Burgess that would use 300,000 tons of low-grade wood each year and some of their wood handling infrastructure. Boone also said they are looking at a district heating system within the city that would lower energy costs for building owners.
“But the common denominator is that none of them are going to move forward unless Burgess continues to be an operation,” she said.
She said her company is ready to work collaboratively with Eversource and all the stakeholders to resolve issues with the power purchase agreement and to get to a long-term resolution.