Federal Ruling On Biomass Subsidies Marks Double Defeat For Timber Sector

Sep 19, 2019

Credit FERC.gov

Federal regulators said Thursday that a state law passed last year to subsidize biomass power plants is invalid, marking the second big defeat in two days for New Hampshire's forest products industry. 

The Federal Energy Regulatory Commission is siding with New Hampshire's ratepayer advocate and a conservative lobbying group, which filed the petition against the 2018 subsidy law.

That law requires utilities to buy electricity from six struggling wood-fired power plants in the state. It hasn't taken effect yet – Eversource and the biomass plants couldn't agree on contracts, and the state declined to step in.

Now, FERC says the law would mean the state is setting an electric rate - something only federal regulators are empowered to do.

It means FERC likely wouldn't approve any contracts filed under the law, making it effectively void despite an ongoing state Supreme Court challenge.

Credit FERC.gov

The ruling came just a day after state lawmakers upheld a veto of a new plan to have ratepayers subsidize the biomass plants directly.

Several of the plants have gone idle with the subsidies in doubt. Timber industry representatives did not immediately respond to a request for further comment.

This post has been updated to clarify that Eversource did not refuse to comply with the new law, but rather could not agree on power purchase contracts with the state's biomass plants.