Members of the forestry and logging industry say the veto of a recent bill by Governor Chris Sununu could have a big impact on their business, vastly decreasing the demand for biomass chips, a section of the business they say they needs to keep running.
“It’s like flipping a switch,” said Dennis D. McKenney, a forester and land surveyor with New England Forestry Consultants in Bennington.
There are two bills that concern foresters, and neither has anything to do directly with the forestry industry – instead, they deal with utilities. The one causing the most concern is the governor’s veto of Senate Bill 365, which would have mandated the state contract with biomass plants to purchase energy at 80 percent of the default energy rate.
Sununu vetoed that bill, along with another bill, Senate Bill 446, which expands the amount of power that can be sold back to the electric grid, citing stresses on electric ratepayers. Both bills were vetoed on June 17.
“New Hampshire has some of the highest electric rates in the country, placing financial strain on the elderly, those on fixed incomes and the business community. These bills send our state in exactly the wrong direction,” wrote Sununu in his veto message on the two bills.
Sununu referred to the bill as an “immense subsidy” for the biomass plants, and said it would impact ratepayers by as much as $25 million a year over the next three years.
Jasen Stock, the executive director of NH Timberland Owners Association in Concord, said the impacts from eliminating the state’s biomass energy will have nearly as big an impact on ratepayers, and that doesn’t take into account the impacts if foresters go out of business or stop purchasing or upgrading their equipment. He said it’s a net loss for the state.
“The argument that this is a drain on state economics just doesn’t wash,” Stock said.
In the wake of the decision, three of the state’s six biomass power plants have made plans to temporarily stop purchasing wood chips, which they attributed directly to the veto of SB 365, according to reports by the Concord Monitor. They include Bridgewater Power Plant in Ashland, Pinetree Bethlehem and Pinetree Tamworth. A fourth plant, Indeck Energy plant in Alexandria, shut down in April of 2017, leaving only two of the state’s biomass plants fully operational. The plants have reported that they may re-evaluate after September, when the legislature has the opportunity to overturn Sununu’s veto, according to the Concord Monitor.
In the meantime, the loss of the biomass market is putting pressure on local foresters.
Teri Hardwick, the owner of D.H. Hardwick & Sons, a timber harvester in Bennington, said that 41 percent of her business’s revenue is from wood chipping.
“We do 60 loads of chips a week,” Hardwick said.
Now, she said, her company has put a hold on a plan to purchase new equipment which would have specifically been for dealing with wood chips, and isn’t sure what the future of the company will be if that market isn’t restored. That’s about $350,000 that won’t be going into the economy, she said.
“It’s not just us,” Hardwick said. “A lot of loggers we know are in limbo. They’re employees are scared. There are some loggers that are not established enough to survive this.”
McKenney said wood chips are not as large of a portion of his business, as it’s a low-value product, but referred to is as a “link in the chain,” of his operations, and that without it, “the chain breaks down.”
“Forestry is like dancing on an ice flow. We know the dance we have to do to make it work, but now we have the governor tipping the dance floor and we’re just trying to stay upright,” McKenney said.
This year to date, McKenney said his business has produced 21,000 tons of biomass.
Hardwick said it’s not a sustainable business model, either for loggers or landowners, to only cut trees that are of the highest value, nor is it ecologically sound. The kind of work her company does for organizations like the Audubon Society, for example, to manage forests to encourage wildlife habitat, would not be possible if D.H. Hardwick were not able to sell the wood chips from cutting low-grade and low-value trees.
“We can’t do it without this market,” Hardwick said.
For example, a recent job her company did at Carpenter’s Marsh and Eva’s Marsh in Hancock, a state-owned property, was done to specifications prescribed by a state forester for wildlife management, and 83 percent of the cutting done in that case resulted in biomass woodchips. It wouldn’t have been a viable project without a market to sell those chips, Hardwick said.
Rep. Jon Manley (D-Bennington), who represents Hillsborough District 3, representing Hancock, Bennington and Greenfield, said both bills had bipartisan support – perhaps enough to support the 2/3 vote needed to overturn a veto. He said the bill is needed to help keep the state’s energy supply diverse, and avoid a monopoly by natural gas suppliers.
“Right now, you have several different kinds of energy feeding into the supply. If you pull some out, it puts pressure on what’s left. Natural gas, if that’s the only choice left, they can charge whatever they want.”
The state Senate passed the bill in a 17-4 vote, and in the House 225-108. The legislative branch will have the opportunity to vote on whether or not to overturn the governor’s veto on Sept. 13.