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New Hampshire law benefits biomass power production

July.19 Biomass

In New Hampshire, a new law is expected to benefit the state’s biomass power producers by increasing the price of alternative compliance payments (ACPs) for Class III sources. It also changes the eligibility standard for landfill gas energy under the state’s renewable portfolio standard (RPS), and includes a variety of other energy provisions, including those related to solar energy and benefits for low-to-moderate income residential customers.

The bill containing these provisions, S.B. 129, become law on July 12 without Gov. Chris Sununu’s signature.

Regarding biomass energy, the law increases the Class III ACP from $45 per renewable energy credit (REC) to $55 per REC for 2017, 2018 and 2019. Class III sources include facilities that began operations on or before Jan. 1, 2006 and produce electricity from eligible biomass technologies having a gross nameplate capacity of 25 MW or less. Methane gas facilities can also qualify as Class III sources.

In addition to increasing the Class III ACP prices, the new law also modifies the eligibility standards for landfill gas methane projects, limiting the projects that can qualify as Class III sources. According to the law, effective Jan. 1, 2017, methane gas will now qualify as a Class III resource if the production is from a source that began operation before Jan 1, 2006 and for which the source or sources exceed a total gross nameplate capacity of 10 MWs in the aggregate located at any single landfill site.

Information released by the NH Timberland Owners Association explains that ACPs are payments a supplier of electricity can make to the New Hampshire Public Utilities Commission Renewable Energy Fund in lieu of purchasing renewable energy credits (RECs), which are used to comply with the state’s RPS program. The ACPs help control REC values. According to NHTOA, ACP prices effectively set a ceiling on prices for New Hampshire RECs, as a supplier would never pay more for a REC than it would pay for an ACP. 

“Given the very low wholesale electricity prices since 2015, having an adequately priced REC market makes the difference between a biomass power plant’s ability to run economically or shut down as economically unviable,” said the NHTOA in a statement. The group indicated that the new law increasing ACP values should produce REC values that will allow Class III biomass power plants to continue operations.

Additional information, including a full copy of the bill, is available on the New Hampshire General Court’s website.