New Hampshire's Clean Power Strategy Wins Support in the Senate

April 2002

By Heidi L. Kroll

House Bill 284, New Hampshire's Clean Power Strategy, passed the State Senate April 10th on a voice vote and will now go to the Senate Finance Committee for closer review. The bill passed the House on January 2nd, 2002. If the bill becomes law, New Hampshire will be the first in the nation to require its grandfathered power plants to reduce four key air pollutants.

During last year's legislative session, House Bill 284 was introduced with the intent of reducing air emissions at Public Service of New Hampshire's (PSNH's) Merrimack Station, Schiller Station, and Newington Station, three grandfathered fossil plants. The bill capped sulfur dioxide (SO2), nitrogen oxides (NOx), carbon dioxide (CO2), and mercury, and set a compliance date of December 31, 2007. PSNH and the environmental advocates strongly disagreed over most aspects of the bill, including the controversial role that emissions trading should play. As a result, the House ST&E Committee retained the bill in hopes that a compromise could be reached. In late November 2001, the House Science, Technology and Energy Committee (ST&E) voted unanimously in favor of an amended bill that satisfies most parties, but has left environmental advocates divided.

Under the new agreement, the emissions caps for SO2 and NOx remain unchanged - annual reductions of 75 percent in current SO2 levels and 70 percent in current NOx levels are expected - but the compliance date is now one year earlier. The cap on CO2 was relaxed and will bring emissions down to 1990 levels by December 31, 2010. The Department of Environmental Services (DES) will recommend a post-2010 cap for CO2 and an annual cap for mercury no later than March 31, 2004, with consideration by the Legislature by July 1, 2005. As in the original bill, the new agreement allows PSNH (or the future owner of the plants) to meet these requirements by reducing emissions at the plants and/or purchasing or banking emission credits. However, the agreement now includes incentives for PSNH to reduce emissions on-site, obtain credits from other plants within the region, and invest in energy efficiency and renewable technologies.

These flexible provisions, which should keep compliance costs in check at around $5 million per year, are the key reason why the bill has garnered such widespread support. Backers of the agreement include Governor Shaheen, PSNH, the Department of Environmental Services (DES), several key Legislators, the Audubon Society, the Society for the Protection of New Hampshire Forests, the New Hampshire Lakes Association, the New Hampshire Global Warming Campaign, the New Hampshire Lung Association, and Environmental Voters of New Hampshire.

The supporters freely acknowledge that the draft legislation is not perfect, but feel that it is a step in the right direction toward reducing pollution, whether the reductions occur on-site or at other sites upwind of New Hampshire. The bill's "cap and trade" approach is seen as a key provision that will help ensure that environmental, economic, and energy diversity issues are balanced. Furthermore, the bill's supporters are proud to have New Hampshire play a leadership role, giving the State a stronger voice in regional and national forums and setting an example that they hope other states and the federal government will follow.

However, not everyone is pleased with the current standards in House Bill 284. Groups including the Clean Power Coalition, Clean Water Action and the New Hampshire Public Interest Research Group, as well as individuals such as former Senator Gordon Humphrey, are opposed to the agreement because they believe it does not do enough to reduce pollution at the plants themselves. Opponents of the "cap and trade" approach argue that it provides no assurance that emissions reductions will actually occur at the New Hampshire facilities. Without such assurance, opponents fear that PSNH's ratepayers will pay for local environmental and health benefits that the State will never actually enjoy. These groups believe that the bill should be strengthened, either by severely restricting the trading provisions or eliminating them altogether.

As House Bill 284 undergoes final review in the Senate, the tug-of-war between supporters and opponents continues. Ultimately, however, opponents will need to decide just how hard to push for more stringent requirements. If they push too hard, they could end up killing the bill - an outcome that even they might agree would be bad for New Hampshire.

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