Berlin Biomass Plant Awaits PUC Approval
By Chris Jensen on Wednesday, March 09, 2011
A broad swath of people in the North Country and beyond are waiting to see how the Public Utilities Commission is going to rule on the Laidlaw Berlin Biopower project.
Laidlaw wants to turn the old site of the Berlin pulp mill into a wood burning power plant.
Proponents claim it would create jobs and tax revenue for a region that needs both.
Opponents don't trust those claims and some argue it would do more harm than good.
A major hurdle for the project remains.
The PUC has to approve a controversial, 20-year contract between Laidlaw and Public Service of New Hampshire.
NHPR’s Chris Jensen has the story.
Last year the state’s Site Evaluation Committee approved the Laidlaw Berlin BioPower project.
But there was one huge condition before the biomass plant could start producing electricity.
The committee said a 20-year contract with Public Service of New Hampshire would have to be approved.
The Site Evaluation Committee contended Laidlaw needed a contract to make the project financially viable.
The Public Utilities Commission is responsible for approving that contract.
It held six days of contentious and surprise-laden hearings in January and February.
SOUND OF THE HEARING BEGINNING
One surprise was that Laidlaw Berlin BioPower withdrew from the proceedings.
Laidlaw said it pulled out because it was getting an unreasonable number of requests from other parties for information.
It said it didn’t want a battle over such information to distract the PUC and delay the proceedings.
But that distressed some other participants who had looked forward to questioning Laidlaw officials.
“It was an advantage to Laidlaw. They didn’t have to come forward and produce information. So, I think it was a strategy on their part.”
That’s Jonathan Edwards, a realtor from Berlin who is opposed to the project.
He participated in the hearing.
Another surprise was that two major opponents of the contract announced they no longer wished to participate.
Their withdrawal meant the PUC couldn’t consider their evidence and objections.
One was Clean Power Development.
It turns out its parent company, Gestamp Biomass of Spain, was suddenly talking to Laidlaw about biomass projects.
The other was Concord Steam.
It didn’t provide the PUC with details of why it withdrew.
After those little bomb shells the hearings moved into the thrust-and-parry of testimony.
SOUND CALLED “QUESTIONING”
In addition to PSNH, others who supported the deal included the city of Berlin, the Coos County commissioners, executive councilor Ray Burton and economic development officials like Max Makaitis.
"Buying $25 million of biomass, since the raw materials are in New Hampshire, provides New Hampshire with an economic increase in jobs and development.”
Governor John Lynch also wrote a letter.
But a careful reading showed while the governor praised the idea of green energy and additional North Country jobs he didn’t specifically endorse the deal.
PSNH argued the contract would help the state’s economy, provide PSNH with state-mandated renewable energy credits and generally benefit consumers.
The basic argument before the PUC was whether the amount PSNH was willing to pay Laidlaw would cost - or save - consumers money.
The PUC staff, and the state’s Office of Consumer Advocate argued that the contract was way too lucrative for Laidlaw - - at the expense of consumers.
In the worst case, they argued over the 20 years PSNH might pay about $500 million more than if the electricity and renewable energy credits were purchased on the open market.
They argued PSNH should be paying market prices.
PSNH denied the contract was a sweetheart deal.
It said by locking in a price consumers would be protected if the prices skyrocketed.
PSNH president Gary Long:
“Well, the debate is what are the future prices for energy, of course nobody knows that answer, nobody knows what the future prices will be and so people speculate that they will be higher or lower than the contract prices.”
If energy prices got really high the deal could, indeed, save consumers hundreds of millions, the state’s calculations showed.
But what if the price being paid to Laidlaw remained higher than the market price?
PSNH said it would keep track of the extra money paid to make sure consumers were treated fairly.
PSNH’s Long:
“Then, we would return that either through some sort of a payment back to customers or we would purchase the plant at a discount cost and then the discounted cost would go back to customers.”
What Long’s referring to is a crucial part – perhaps the most important part - of the deal.
It would allow PSNH to purchase the Laidlaw facility, although that would require a change in state law.
Neither the Office of Consumer Advocate nor the PUC staff was buying it.
Their basic concern was that by paying more than the market price for electricity PSNH could put aside a huge amount of money – at consumers’ expense. Then, it could use that surplus to buy the plant.
They said whether consumers would see any of that money back depends on a lot of things, none of them certain. One is the value of the Laidlaw facility in 20 years.
In short, they contended, the deal is a huge and unacceptable gamble for consumers.
The PUC staff did acknowledge there would be some job benefits in the North Country.
But they said that didn’t justify the commission allowing PSNH customers to be charged more than necessary.
There was, however, an argument that jobs gained around Berlin could be lost elsewhere.
David Shulock, a lawyer representing smaller biomass plants in the state, said the deal would drive up wood prices and could put his clients out of business.
The PUC is expected to act within a month or so. One possibility is that it could approve the deal with certain conditions.
Another it that it could send the parties back to the table to try and work out a new agreement.
If the PUC completely rejected the contract the project would wind up back in front of the Site Evaluation Committee. That could mean a delay in its moving forward.
For NHPR News, this is Chris Jensen
