New Hampshire Gov. Chris Sununu and the Office of Office of Strategic Initiatives Director Jared Chicoine recently released a 10-year energy strategy for the state, which includes a series of energy policy goals across a wide range of areas.
The plan follows months of drafting, public comment sessions, and legislative feedback.
The plan highlights the high energy costs existing in the state by saying, “New Hampshire has the third highest electricity rates in the contiguous United States. On average, each New Hampshire resident spent $3,934 on energy in 2015.”
The cost of energy is particularly impactful on lower wage-earners, who often spend more than a third of their income on purchasing energy, the report noted.
Commercial and industrial consumers in New Hampshire purchased nearly two-thirds of all retail electricity sales, “and the high cost can make competition harder against businesses in lower-cost regions of the country.” The fact that state energy costs are so high “is striking, because electricity generation costs are low compared to prior decades,” the report said.
It said that “expensive energy – or pursuing policies that raise the cost of energy – directly and negatively impacts New Hampshire families and businesses and the quality of life in our state. As such, the priority of this strategy is to organize goals around cost-effective energy policies.”
At the same time, the report said that there are numerous goals that should be pursued to improve state energy policy to better meet consumer needs.
The plan notes, “As a part of this New England grid run by ISO-NE, New Hampshire shares decision-making authority with our regional neighbors, and is also responsible for shared costs. Regional policy reforms are necessary if New Hampshire is to avoid increasing energy costs.”
The report reflects support for Seabrook Station, a nuclear power plant, which accounted for 55.8% of the state’s energy generation in 2016. Natural gas accounted for 24.6% for the same year.
“It is essential that New Hampshire’s energy strategy account for nuclear power. It is important to ensure that Seabrook Station’s economic lifespan is not artificially shortened by state policy decisions,” stated the report.
“It is likely that New England’s carbon emissions would increase significantly if Seabrook Station were to stop generating at capacity. Preserving Seabrook Station as a source of zero-carbon energy is the most realistic and cost-effective means of managing emissions in New Hampshire at scale,” the report said.
With respect to natural gas, the report said that New Hampshire’s energy policy “must be realistic about the necessity of natural gas into the foreseeable future while ensuring that infrastructure projects or expansions are in keeping with natural resource protection.”
The report addresses the expanding role of renewable energy by saying that renewable energy “is highly likely to continue to grow as a percentage of total electricity generation in New England. Federal and state energy policies, not competitive markets, are the primary drivers of the construction of renewable resources in New England.”
With respect to renewable portfolio standards, the report said that the RPS framework “depends on mandates that segment renewable technologies from each other and from the broader competitive electricity market.”
If reducing emissions is a primary objective, “then in order to have conceptual consistency, the RPS should be redefined to include other zero carbon or low-carbon resources.” If the goal is to pursue the most cost-effective low-carbon options, “then segmenting energy technology types thwarts that outcome.”
Energy efficiency is identified by the report as “the cheapest and cleanest energy resource.” New Hampshire should prioritize capturing cost-effective energy efficiency in all sectors, including buildings, manufacturing, and transportation, it said.
Demand response is also cited as the report notes that, “ISO New England has integrated demand response into the forward capacity market as a way to help encourage reductions in peak load.” The report said that the development of new structures and programs that “economically integrate demand response resources represents a successful growth of competitive markets, and, as opposed to state action, is likely to be the most cost-effective mechanism to incentivize demand response adoption.”
Goals
The report lays out a series of detailed goals for consideration.
One of the goals is the adoption of all-resource energy strategies and minimizing government barriers to innovation. The report said that no single energy resource will solve New Hampshire’s energy challenges.
The report said that government policies should be technology neutral “to enable the cultivation of cost-competitive resources.” The report said while some states “may attempt to drive innovation through mandates and subsidization, New Hampshire should not engage in a competition of subsidies with neighboring states. Instead, our state should enable creativity and entrepreneurial endeavors by refraining from picking winners and losers among energy technologies.”
“New Hampshire policymakers should pursue market-based mechanisms for achieving cost-effective energy, while avoiding preferential quotas and mandates,” the report argued.
Another goal calls for ensuring “a secure, reliable, and resilient energy system.” Within this goal, the report notes that the New Hampshire PUC’s “Investigation into Grid Modernization” docket resulted in a final report on March 20, 2017. The overarching goals contained in the PUC report are to (1) improve reliability, resiliency, and operational efficiency of the grid; (2) reduce generation, transmission, and distribution costs; (3) empower customers to use electricity more efficiently and to lower their electricity bills; and (4) facilitate the integration of distributed energy resources (DERs).
The New Hampshire energy strategy said that stakeholders should continue the development of grid modernization in New Hampshire in keeping with the 2017 Grid Modernization report and consistent with the broader policy goals outlined in the state energy strategy.
