To help mitigate the impacts of volatile natural gas prices, the New Hampshire Senate passed a bipartisan bill March 21 that would incorporate discounted renewable power supplies in the process for obtaining energy supplies for retail customers who do not choose an electricity supplier.
Incorporating the use of renewables in the default energy procurement process at a discount from default energy rates can "increase the certainty of diversity in the generation mix," reduce the state's dependence on natural gas, provide electricity cost savings for default service customers, and ensure the continued benefits of renewable generation in New Hampshire, the bill maintained.
Under the measure, electric distribution companies must offer to purchase the net energy output of any biomass, municipal solid waste, wind, solar, or hydroelectric resources within their service territories as part of the procurement of default service.
Specifically, a company would seek proposals from eligible renewable facilities before each solicitation for default service supply. Once the results of this initial solicitation are in, the New Hampshire Public Utilities Commission "may direct" the distribution companies to enter into power purchase agreements for energy and/or capacity from those facilities for the time period to be covered by the default service solicitation.
The bill explained that it wants to allow renewable generation to be provided at a discount in the procurement of default energy supplies because New England's electricity supply is heavily dependent on natural gas-fired generation, a "price-volatile source of electricity" due to weather conditions and related delivery constraints.
Natural gas generators set the price of electricity in the markets, which can force renewable generators to close when the price of gas goes too low, according to the bill. "Closure of renewable generation can leave the state and region even more dependent on electricity from natural gas-fired generation," the bill stated.
The consumer advocacy group the New England Ratepayers Association said the bill will "raise electricity costs by tens of millions of dollars," and its passing ignores the advice of other critics who similarly agree that low-income ratepayers will be disproportionately impacted.
The bill, sponsored by Republican state Sen. Daniel Innis and co-sponsored by a handful of his colleagues in both parties, was introduced in December 2017.