Wednesday, December 28, 2016

It's the Energy (Cost) Stupid

Sig Sauer of New Hampshire recently announced that it is expanding and building a 70,000 square foot ammunition plant in Arkansas. They would rather expand in New Hampshire, but the savings in electricity will save the company about $1 million a year. They will also bring 134 jobs to Arkansas. Electric cost are twice as high in NH than Arkansas.
Sig Sauer is not unique. According to the Union Leader,  Chocolate maker Lindt & Sprungli says high energy costs are preventing it from expanding its Stratham operation, which produces around 250 tons of chocolate a day. Whelen Engineering, which makes emergency lights for police cars, is considering whether to add a new building in the Charlestown area with 100 new jobs or put it in a cheaper-energy state, such as Georgia.“Manufacturing will go away from New Hampshire if we do not as a state, and especially our Legislature behind it, do something which should have been done 10 years ago to reduce the cost and control the cost of energy to the manufacturers" said John Olson, Whelen’s executive vice president
We hear a lot of talk about improving New Hampshire's economy to make our state more business friendly, but little discussion or legislative action on attempting to bring our energy costs down to a competitive level. The Business and Industry Association of New Hampshire (BIA)considers the current situation an "energy crisis. " New Hampshire businesses continue to experience excessive electrical energy prices due to supply constraints. The high cost of electricity makes businesses here less competitive, jeopardizes current and future jobs, and threatens our economy. Even with news that this winter's rate spike may not be as big as in recent years, the regional electric rate disparity remains a long-term, persistent challenge. Make no mistake – this is a crisis and action is needed now.”'
In September 2015, BIA launched EnergizeNH , "..an initiative advocating for state and regional policies and initiatives that enable the development of low-cost, reliable sources of energy, including expanded natural gas pipeline capacity and increased electrical transmission, into the region."
More than 44% of NH's electricity is generated from the Seabrook nuclear power plant. Natural gas provides 27 %,  coal meeting almost 15 percent,  8% is from hydroelectric power (imported from Connecticut and the Merrimac River basin) and 5% from wood derived resources.
NH has no fossil fuel resources so all the coal and natural gas comes from elsewhere.

Where is Concord on this critical issue? In an interview with the Union LeaderSen. John Reagan, R-Deerfield, said he doesn’t think the Legislature should get involved.
He said that businesses looking to locate in New Hampshire factor in things like availability of workers and cost of doing business. High electric rates are “a cost of production." 
Incoming State Senator Ruth Ward, R-Stoddard,  in an interview with NHPR said that her top priority is expanding school choice, When asked what she will do to address the high cost of energy, she said didn’t understand why New Hampshire has such high energy costs. " And that would be one of the things, when I have an opportunity to find out where is the cost, why is it so high. I do know, for example, that some of the trustees of Eversource paid an incredible amount of money just to be trustees. Is that necessary? Could they just have trustees who are volunteers? And that would significantly reduce costs to Eversource." Governor elect Sununu sees his top priorities as voter fraud, right to work legislation and concealed carry of firearms without a permit. 
The focus on reducing business taxes as the panacea to attract business misses the mark as it does nothing about what is really keeping current businesses from expanding and causing some to leave, and preventing companies from moving here. 
It's too early to see what will be proposed in the NH House and Senate for 2017, as the nearly 900 new bills are not yet completely drafted. 



7 comments:

Anonymous said...

All you have to do is read the news about efforts everywhere in the state to prevent energy improvements. It is a NIMBY issue and it finally is coming to roost with ever higher electricity prices. As the saying goes, you cannot have your cake and eat it too. People do not want added gas pipelines, more power transmission lines from Canada for cheap hydro, wind farms, etc. etc. So, now they pay for it by not having jobs and a robust economy. Tourism can only support so much. And Moultonborough wonders why they cannot attract families to move into town? Wake up... it is all about JOBS...not a new Recreation Center that is in the dreams of some on the BOS or anything else. Nobody is coming because the BOS thinks a new gym will be the deal maker. Look at CruCon.....already saying they cannot attract workers despite terrific benefits and steady employment outlooks. Look at the printer manufacturer on Rt 104 that is pulling up stakes to relocate to Manchester for a better job market. Ask them if they would stay if we build a new gym or a senior center? Yes, electricity is a big deal and until folks get over their negative agenda driven by environmentalists and can deal with a NIMBY mentality, we will be stuck in dream land !

Light bulb (LED) said...

Lets keep Moultonborough "just the way it is". "We don't want change". No, let's keep the same governance mindset. Don't worry about Concord being the problem. It's part of it, but no where near the "enlightenment" in town. Maybe more money should be spent on the school system; more basketball and soccer players are needed to justify more recreation.

Maybe the town should be glad Dollar General is in Moultonborough. The "kids" can cross the street, can run from there to home, with candles and batteries, when electric power goes beyond ability to pay.

Moultonboro Blogger said...

It isn't so simple as you make it out to be, but if we continue to focus on the wrong things or problems that don't really exist, we will never solve this.There has to be a middle ground and Concord needs to take the lead and address things like a shrinking workforce and aging population. Instead, many in Concord believe the answers to all that ails us is to focus on idealogical issues and non existent problems.
You are incorrect in stating NH does not have jobs and a robust economy. What we don't have is a qualified workforce trained and ready to fill those jobs. Sig Sauer has 200 openings in NH that they can't fill. You are also incorrect about CruCon for the same reason. They have plenty of jobs. Attracting workers and families is multifaceted. Affordable housing, competitive energy costs so business will expand and grow right here, making our university system affordable, investing in our workforce and yes, making our town more attractive are all part of it. Just saying no to everything is not the answer.
Where are our elected leaders in Concord on this? We have many there that have been in office far too long and their only concern is to get re-elected every 2 years.

William M Marsh said...

This is a very complex issue Paul, and in some ways is a done deal in that last year the plan was approved to securitize Eversource's stranded costs and bake their recovery into our electric rates for the next 15 years.

http://www.nhbr.com/July-22-2016/Transparency-and-the-Eversource-settlement/
http://www.argusmedia.com/pages/NewsBody.aspx?id=1053551&menu=yes

Nevertheless, in the long run this may well get us lower rates. After all, Maine deregulated electricity in 2000 and now has better electric rates than NH and everyone else in New England.

https://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_6_a

I suspect it will take us 15 years (and the disappearance of stranded costs from our electric bills) for that to actually happen. I hope I am wrong. In the meantime, I am not sure what (if anything) Concord can do about this except make things worse, but I am open to suggestions.

Anonymous said...

I recall that northern pass proponents wouldn't even consider burying the lines. Perhaps that should be considered now.

Anonymous said...

Another Union Leader article ...

Another View -- Michael Behrmann: NH needs stable energy costs

By MICHAEL BEHRMANN


"A recent Union Leader article presented readers with the concerns of a few New Hampshire manufacturers regarding the state’s current energy costs. These concerns are certainly shared by many of us, as is the goal of affordable, stable energy costs. But what is the best path to achieving this?

http://www.unionleader.com/Another-View-Michael-Behrmann-NH-needs-stable-energy-costs-12282016


Anonymous said...

Seems odd for a republican to state the cost of electricity is simply built into the cost of production. I think someone's pockets are lined with electric dollars.