Governor’s veto of Burgess BioPower bill raises fears for North Country economy

The original post can be read here.

Barbara Tetreault

Aug 23, 2023 Updated Aug 23, 2023

BERLIN — Governor Sununu’s veto of a bill designed to keep the Burgess BioPower biomass plant in Berlin in operation has city and local officials fearful of the economic impact locally and on the state’s timber industry.

Berlin Mayor Paul Grenier said if the biomass plant fails, the effect would ravage the local economy. Burgess BioPower pays 16 percent of the city’s property taxes as well 40 percent of water works revenue and 20 percent of sewer revenues. Also, at risk is a $19 million federal grant the city received to rebuild the downtown infrastructure and install a snowmelt system using waste heat from the biomass plant.

“If the plant closes it would be devastating. It would destroy the future of the city for the next 20 years,” Grenier said.

Calling the veto “both disappointing and concerning” the city’s three state representatives, Corrine Cascadden, Eamon Kelley, and Henry Noel, are calling on the legislature to promptly override the veto.

“The North Country’s economy depends on businesses like Burgess BioPower, which supports the local timber industry and the energy needs of the state,” the three representatives said in a joint statement.

The biomass plant is the largest buyer of low grade wood in the state, purchasing almost 800,000 tons annually and generating $70 million annually in economic activity. An economic study done for Burgess BioPower reported it supports 240 jobs, both directly and indirectly.

Last Friday, Sununu vetoed House Bill 142, designed to relieve the Burgess BioPower biomass plant in Berlin of repaying $60 million it received from Eversource ratepayers. Sununu said the 75-megawatt plant has been enormously expensive in the ten years in has been in operation and charged it has received over $200 million in subsidies paid for by Eversource ratepayers.

“Time and again the Burgess management and ownership team has made bad promise after bad promise to our elected officials. The only thing we have to show for it are more empty

“Enough is enough,” he concluded in his signing statement.

Sarah Boone, senior vice president, corporate affairs for CS Operations, said Burgess BioPower will seek an override. She said the bill was the result of more than two years of collaborative bipartisan work by legislators and the state Department of Energy and passed the House by a margin of 269 to 109 and the Senate unanimously on a voice vote.

“HB 142 represents a well-considered balancing of issues,” she said.

Among supporters of the bill were the N.H. Timberland Owners Association, the Androscoggin Valley Chamber of Commerce, and Senate President Jeb Bradley. Opposing it were the N.H. Business and Industry Association, the Sierra Club, and the Josiah Bartlett Center for Public Policy.

Grenier said he supports the effort to override the veto and will be talking to legislators but admitted he is nervous. While the bill passed the legislature with more than the necessary two-third majority necessary to override Sununu’s veto, Grenier said getting the body to override a veto is always tough. The mayor said he is hopeful it will happen but said the city has to plan for the worst.

Boone said a clause in the 20-year power purchase agreement Burgess BioPower signed with Eversource (then Public Service of N.H.) has put the facility’s future at risk. The mechanism, known as the Cumulative Reduction Factor, compares Burgess’s long-term fixed contract price for power to the price Eversource receives when it resells the power in the fluctuating day-ahead market. The difference is the Cumulative Reduction Factor. The agreement capped the CRF at $100 million.

Approaching the $100 million cap, the legislature in 2018 passed a bill to suspend the cap for three years. But the regulatory process to implement the bill took nearly two years and mandated that Burgess repay the suspended costs rather than have the costs forgiven. Last year, legislature was introduced and passed to extent the suspension another year and have Burgess go through an energy audit by the state Department of Energy. The energy audit was completed and HB 142 was introduced this year to forgive the amount over $100 million or approximately $60 million. Boone stressed the bill absolves Burgess from having to repay the $60 million but does not impose any new costs on ratepayers and puts all future financial risk on Burgess.

If the veto is not overturned, Boone said the $60 million would be withheld from Burgess’s energy payments over 12 months beginning in December 2023. She said that is not financially feasible for Burgess.

Boone said criticism that the biomass plant is subsidized is an “inaccurate characterization.”

“Burgess receives a steady contract price for energy. Eversource buys Burgess’ power at that contract price and re-sells it into the day-ahead market. The “subsidy” is based on comparing Burgess’ price to the day-ahead market price, which – again — is not the price consumers actually pay for power,” she explained.

Boone said Burgess has no control over how Eversource uses their power but under the CRF clause in their power purchase agreement, the company is responsible for repaying the difference.

“This means we are obligated to repay a debt that was never actually incurred and puts the plant’s future operation in jeopardy for no reason,” she said.

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