How long-term procurement could help ratepayers and get clean energy projects built
Walden Renewables, a renewable energy development company, has several utility scale solar projects under way in New Hampshire and is interested in the new market potential created by Senate Bill 54. Pictured is the company’s Littlefield Solar Project in Wells, Maine. (Courtesy of Walden Renewables)
A new long-term energy procurement law in the state is slated to create a market of power purchase agreements between utilities and energy generators for as long as 20 years.
Proponents this past legislative session viewed Senate Bill 54, signed into law by Gov. Chris Sununu in August, as a financial mechanism to benefit ratepayers hit hard by the price volatility of natural gas. The new law allows Eversource, Unitil, and Liberty Utilities – the three utilities regulated by the state’s Public Utilities Commission – to enter into multi-year purchase power agreements for up to 2 million megawatt-hours annually. Prior, the utilities were restricted to six-month rate contract agreements.
Though amendments to the bill ultimately made it “technology neutral,” it’s likely that new clean energy resources will get built as a result, said Sam Evans-Brown, executive director of Clean Energy New Hampshire. The new law enables project developers of all kinds to submit bids that will be compared apples-to-apples by the utilities.
“I’m excited about this bill primarily because it’s aimed at developing new resources, and when you look at the ISO New England interconnection queue, 95 percent of the projects being proposed are either wind, solar, or batteries,” he said.
ISO New England’s interconnection queue – projects that are awaiting connection to the regional electric grid – shows 23 projects in New Hampshire, accounting for more than 1,200 megawatts of solar and 400 megawatts of storage.
“There are a lot of New Hampshire-based projects, mostly utility scale solar, that could potentially bid into an RFP,” Evans-Brown said. That list doesn’t include projects in the development phase such as the Twin States Clean Energy Link and New England Clean Power Link, both regional transmission projects.
Other states have targeted energy procurement specifically to offshore wind or transmission, for example. In New Hampshire, the goal is to see a diversity of bids: If the project can lower costs for ratepayers, the state wants to take a look.
During State House testimony last session, existing power providers opposed the bill, as it specifies that agreements must be made with “new or incremental electric energy sources.”
New England Power Generators Association President Dan Dolan said the bill would hurt existing facilities by excluding them from the chance to compete for contracts.
And while some see clean energy development as a potential outcome of SB 54, that wasn’t the goal during legislative proceedings. In fact, that state’s Department of Energy said it would have opposed the effort if it was.
Co-sponsored by Republican Sen. Kevin Avard and Democrat Sen. David Watters, SB 54 initially specified renewable energy-specific resources, but that was removed when it underwent surgery in the Senate Energy and Natural Resources Committee. DOE Deputy Commissioner Chris Ellms said in April that the amended version was “laser focused” on costs and reliability, and that the “market-driven” department wouldn’t have supported any alternative version.
While initially “neutral” on the bill, Eversource ultimately also supported it.
Developer perspective: ‘What we specialize in’
Dale Knapp leads the New England development team at Walden Renewables, a private renewable energy developer. He said “long-term, fixed-price power contracts” are “what we specialize in.” The company has several of the sort in Maine, for example.
With SB 54 signed into law, Walden Renewables is looking forward to what New Hampshire’s new procurement clause could mean for them, as are others. Evans-Brown said he’s since fielded calls from developers now interested in doing business in New Hampshire.
“We’re keenly interested in seeing the benefits utility-scale solar has brought to other spots in New England (brought) to people in New Hampshire,” said Knapp, who feels renewable energy is no longer about whether people believe in climate change, but, rather, it’s become a “purely economic situation.”
He said Walden Renewables hopes to build a number of projects in New Hampshire that may be considered for long-term procurement contracts, and a few are already under development. A 20-megawatt solar project in Farmington is slated to undergo site plan review this winter, with the potential of construction starting at the end of next year.
“You need utilities entering into contracts with these providers to sort of build an industry,” Knapp said. “These projects provide grid resilience, domestic clean energy. We produce it here, we consume it here.”
Some opponents of long-term procurement contracts say the benefit isn’t obvious or immediate. From Knapp’s perspective, “you have to give it time.”
“These are not immediate returns,” he said. “SB 54 lays out a framework and a path that we need to continue down to get the result. It will take a few years to get these projects procured, constructed, and operational. Our grid is not a next day kind of response, so we’re trying to do things today that will have a very long-term and pragmatic benefit on our power mix.”
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