Vitex Extrusion is one of many advanced manufacturing businesses in New Hampshire. At our 115,000 square foot facility in Franklin, we have the capability to produce 30 million pounds of custom aluminum extrusions and components for industries including electronics, building products, automotive, and sporting goods. We manufacture 24/7, meaning we use a lot of power to run our industrial machinery, lights, and HVAC equipment. One of the highest operational costs for Vitex is electricity.
This session, the New Hampshire legislature is pursuing policies that will – alarmingly – add to the cost of electricity and require subsidies from businesses, including Vitex, and residential ratepayers like you. These policies make it difficult for manufacturers, who drive the state’s economy like no other sector, to grow our companies here in New Hampshire. In fact, expanding in New Hampshire is a growing concern for some of us. New Hampshire individual and business electric ratepayers already absorb energy costs that are 50-60% higher than the national average - year-round! Still, many bills under serious consideration by legislators this session not only fail to lower electric costs, but instead add to them.
The legislation with the largest potential cost impact for businesses and all ratepayers seeks to increase the state’s minimum percentage obligation for New Hampshire’s Renewable Portfolio Standard, known as RPS. Many states around the nation have adopted RPSs of their own that require a portion of electric utilities’ mix of generation supplied to customers must come from renewable sources such as wind, solar, hydro, and thermal. New Hampshire’s current requirement is 17% of utilities’ mix of energy must come from renewables; that percentage increases to 25% by the year 2025. Two proposals this session aim to raise the RPS percentage to 56% by 2040. The increase in the twenty-one-year period between 2019 and 2040 called for in this legislation is estimated to add up to $5 billion in electricity costs for New Hampshire ratepayers—businesses, homeowners, and renters alike.
With the region already hard-pressed to meet its current electricity demand (grid operator ISO New England predicts a high likelihood of rolling blackouts by the winter of 2024-25 if our regional energy situation remains unchanged), legislators should tread carefully with this legislation. Supporting clean energy and renewables as part of an “all of the above” approach is important in attempting to address high electricity costs. However, there needs to be a healthy balance between the pursuit of clean energy and the need to ensure reliable power at all times, and to do so at rates that are at least stable, if not declining.
In addition to RPS legislation, lawmakers are once again considering subsidizing biomass plants in New Hampshire by requiring utilities to purchase baseload renewable generation at above-market prices. This cost, estimated to be about $25 million annually for three years, would again be passed onto all ratepayers. This language follows a similar bill that was vetoed by Governor Sununu last year, then overridden by the legislature. Although this legislation would seek to protect jobs in the wood products industry, mostly in the North Country, it comes at the expense of energy users, particularly large ones like Vitex, who employ tens of thousands of people throughout the state. It is simply bad public policy for policy makers to choose winners and losers in various sectors of the state’s economy.
Finally, legislators are once again trying to raise the cap on net energy metering from one to five megawatts. Net metering allows consumers who generate excess electricity through their own solar arrays, wind generators, or other means, to receive credit for energy sent back to the electric grid. Raising the cap on net metering isn’t the issue – and should in fact be aggressively promoted. The issue is the amount of credit those who generate excess electricity are given. The amount of credit in these bills is likely to fall above the “avoided cost,” a figure set by the state’s Public Utilities Commission. The “avoided cost” includes the wholesale cost of power and ancillary services related to generation. Anything paid to net metering customers above the avoided cost means other ratepayers are subsidizing them. That’s simply not fair.
Instead of protecting electricity customers to the greatest extent possible from the high cost of electricity, many policy makers seek to advance policies that will further burden electric ratepayers. If New Hampshire seeks to retain existing businesses like Vitex, and enable us to expand, then policy makers should be working to lower electricity costs, not increase them.
Andrew Curland is the CEO & president of Vitex Extrusion in Franklin. He is the incoming chair-elect of the BIA Board of Directors.
Current Issue - April 2024