Wood-burning plants agree to allow Berlin BioPower

By GARRY RAYNO– New Hampshire Union Leader

CONCORD — Public Service of New Hampshire and six independent wood-fired, biomass plants have reached an agreement that would allow construction of a $275 million biomass plant in Berlin to begin this fall.

The two sides, along with the developer of Berlin Station and state officials, have been negotiating for several months and filed the agreement Tuesday with the Public Utilities Commission, which still needs to approve the agreement and the individual power purchase contracts.

As a result of the agreement, the six wood-burning plants will drop their appeal of the Public Utilities Commission order approving the power purchase agreement between Public Service and the Berlin biomass facility. The state Supreme Court appeal prevented developers from securing financing for the project.

In a letter to the PUC, Gov. John Lynch urged the commission to support the power purchase agreements between PSNH and five of the state’s six independent wood-fired, biomass plants and the settlement agreement.

“Given the state of the energy market today, it has become difficult for small wood-fired plants to continue to operate without the stability of contracts to sell their power to a utility company. The power purchase agreements address a shortterm problem in a measured and responsible way,” Lynch wrote. “The petition and settlement agreement will also allow the Berlin BioPower project to go forward, which is an important step forward for economic development in Coos County.”

Officials for both Public Service and the small power producers say the agreements will help the North Country, the existing plants and the wood product industry.

“We are pleased that all parties were able to resolve outstanding issues so that the Berlin biomass renewable energy project can now move forward to the economic benefit of the North Country region and the state, while also providing a basis for the existing biomass plants to continue operations during these difficult economic times,” said Gary Long, Public Service president and chief operating officer.

“The existing wood plants appreciate the efforts, including those of the governor and other state officials, that produced the settlement supporting the continuation of the existing wood plant and forestry jobs and related economic benefits to the North Country. We look forward to PUC approval so that these jobs and benefits are sure to continue,” said Michael O’Leary of Bridgewater Power Co., one of the existing wood plants.

The new power purchase agreements with five of the six wood-burning plants are for about two years and expected to cost Public Service about $20 million more than the market rate for power, or about $8.5 million annually. The sixth woodburning plant currently has a power purchase agreement with Public Service.

The five agreements are estimated to cost the average Public Service residential customer using 500 kilowatts of electricity a month about 55 cents on a monthly bill. The PUC will have to approve the new charge and the method Public Service proposes to collect it. In his letter to the PUC, Lynch asks regulators to expedite the approval, writing: “New Hampshire will be best served by the commission’s expeditious approval of these agreements.”

Public Service spokesman Martin Murray said, “We’re pleased with the result, which is going to mean these plants which are so important to a number of people in the state will continue to operate at least in the near term, and that will help them weather some pretty rough economic conditions.”

The agreements will also move the Berlin biomass plant “a step closer to reality and that could be a real boom for the North Country,” Murray said. “This is a policy decision that is very important to state.”

The $275 million project is expected to create 40 permanent jobs when it is finished and up to 400 construction jobs over the next two years. The 75-megawatt facility on the former Fraser Paper Mill site is expected to be Berlin’s largest property taxpayer. The six wood-burning facilities appealed the power purchasing agreement between what was known as Laidlaw Berlin BioPower and PSNH, claiming the 20-year deal threatens their existence and would harm ratepayers.

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