REAL’s Testimony on SB 99

Testimony on SB 99
Energy and Natural Resources Committee
New Hampshire State Senate
March 20, 2013

When is a temporary moratorium appropriate?

  • When major new activities or circumstances arise…
  • That are not contemplated or fully addressed by existing laws…
  • And threaten important public values…
  • Or risk overwhelming the state’s normal regulatory processes…
  • Making it appropriate to take a “time out”…
  • To preserve the status quo…
  • And give the state a window of time to get public input and do the necessary research, policy and institutional development…
  • To implement a sound, orderly regulatory approach…
  • That carefully balances relevant policy considerations…
  • And protects the public interest

Temporary moratoria are common, widely-used government tools

  • They’ve been specifically approved by the US Supreme Court
    • “[M]oratoria … are used widely … to preserve the status quo while formulating a more permanent development strategy. In fact, the consensus … appears to be that moratoria … are an essential tool of successful development.” (Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302, 304 (2002), footnotes omitted.)
  • Temporary moratoria have been recently used on the national scale on high-profile issues
    • Temporary federal moratorium on offshore oil drilling (2010)
    • Various temporary state moratoria on fracking (current)
  • This essential government tool is employed in a broad range of policy contexts
    • Google “temporary moratorium” to see the multitude of current examples
    • Recent subjects of temporary moratoria include: single family home development, oil and gas projects, mining, road construction, wireless facilities, Walmart, substance abuse centers, adult care centers, pawn shops, payday lending, tattoo shops, foreclosures, food trucks, gun sales, internet cafes, alcohol service, skating rinks, collection of certain taxes … and many more!
  • Temporary moratoria are a longstanding part of New Hampshire practice
    • When towns with outdated or incomplete land use ordinances are faced with sudden new development pressure, RSA 674:23 authorizes a temporary one-year moratorium on all new development, giving the needed time for the town to update its land use regulations
    • This temporary moratorium provision balances the interests of private developers and the public in the critically important New Hampshire context of property development

And temporary moratoria don’t “chill” business. Look at the key examples above. When the temporary moratoria expire, offshore oil drilling, natural gas fracking and NH property development move forward under appropriate rules designed to protect the public interest…

Temporary moratoria have been successfully used in other states to encourage responsible electric transmission line development

  • In recent years temporary moratoria on electric transmission lines have been enacted in Maine, Connecticut, New York, Florida, Washington, Georgia and Wyoming
  • Maine’s moratorium, approved in 2009, is an instructive example for New Hampshire legislators. The moratorium’s intent was to ensure that Maine would benefit from new merchant transmission lines designed to move electricity from Canada to southern New England, rather than just bear the costs. This is exactly the challenge facing New Hampshire today
  • From a press report on Maine’s temporary moratorium:
    “Maine Legislature Votes in Favor of Energy Corridor Moratorium”

    “The Maine Legislature has overwhelmingly voted in favor of placing a moratorium on a controversial, massive energy corridor, which would use right of ways on Maine highways to deliver Canadian-produced energy to lucrative markets in southern New England.
    “The legislation will go into effect immediately …. The bill contains … a moratorium on large new transmission lines until a newly created study commission reports and the Legislature acts on its report. …
    “Members of the Maine Jobs First coalition, a group of Maine-based manufacturers, labor unions and energy developers who joined forces to make sure the project would not leave Maine saddled with unintended consequences, has raised concerns regarding the corridor’s lack of benefits for Maine’s workers and citizens.
    “We are relieved that the Legislature clearly heard our concerns and acted accordingly” said John Hanson, Executive Director of the Maine State Building and Construction Trades Council. “This proposal was seriously flawed and put Maine in the back seat ….”
    “The proposed energy corridor, first announced in March, would be four times larger than any other transmission line in New England and would serve as a conduit, connecting New Brunswick’s growing energy hub to more profitable markets in Connecticut and Massachusetts. “
    Soon after the idea was announced, representatives including Maine-based manufacturers, labor unions and energy developers formed the Maine Jobs First coalition to make sure the project would not leave Maine saddled with unintended consequences.
    “To us, the original proposal made no sense whatsoever,” Hanson explained. “We … didn’t believe that Maine should bear the costs while Canada gets all the cash.”
    “The next 18 months will determine a great deal about Maine’s energy future.” Buxton explained. “Are we a through-way with parking lots, or are we a community with industry? Are we a producer of renewable energy or a passive bystander?” …
    Why should Maine people pay to build energy facilities in Canada instead of Maine?” said Glenn Poole, president of the Industrial Energy Consumers Group and member of the Maine Jobs First Coalition. “A huge energy corridor with no off ramps and only one on-ramp would seriously jeopardize pending energy projects right here in Maine.
    “With Maine’s energy future at stake, we should not be sacrificing opportunities on our side of the border,” Poole said. “We’re glad to see that this massive corridor will get more scrutiny, because Maine simply can’t afford to get this wrong.
  • Maine’s temporary moratorium was lifted in 2010 by new legislation that took into account the results of the legislative study conducted during the moratorium period
  • The legislation adopted a new “Maine first” policy requiring analysis of impacts on Maine’s own renewables sector and other Maine benefits prior to approval of new transmission corridors

And transmission line moratoria don’t “chill” business. Transmission development is highly active in all of the states mentioned above…

New Hampshire needs a temporary moratorium on elective, private, for-profit, non-need transmission lines

  • New Hampshire is under threat from multiple “merchant” transmission proposals so significant in scale that they may forever change the character of our state
  • These projects are NOT “necessary” additions to the electric grid in New Hampshire or the region. They are NOT required (or even asked for) by any federal, regional or state regulator. They are NOT infused with public purpose. They are simply about making money for private developers. Think of merchant transmission projects as just like another Walmart, car dealership or gas station. It’s private business, nothing more, nothing less…
  • New Hampshire is in the way. The private transmission developers typically want to make money by moving electricity from generation facilities north of our borders to demand load centers south of our borders. Our state would just be a doormat for the new, private, for-profit extension cords
  • New Hampshire is targeted for these projects because of our old, undeveloped regulatory structure. In technical jargon, it’s called “regulatory arbitrage”. Developers pick the jurisdictions with the most backwards regulations because they’re the easiest to exploit
  • New Hampshire’s current regulatory approach to merchant transmission has at least five “Achilles’ heels”:

(1) The state has no tools in our regulatory tool box to ensure that the state benefits from these projects, financially or otherwise
(2) We have no tools to protect the state’s interest in developing our own strong, vibrant renewables energy capacity
(3) We have no tools to effectively limit the imposition by project developers of massive external costs on the public (damage to property values, businesses and communities)
(4) Our regulatory approach fails to draw the critical policy distinction between “needed, regulated” transmission and “unneeded, merchant” lines. Surely elective, private, for-profit, non-need transmission lines should be given much less latitude to impose costs on our families and communities
(5) The state’s siting authority – the Site Evaluation Committee – is overworked, under-resourced, lacks critical elements of state-of-the-art technical expertise, and runs the risk of being overwhelmed by future projects

  • Because of these critical regulatory gaps and holes, the public has little confidence in the state’s ability to protect the public interest in approving and siting merchant transmission lines
  • SB 99’s one-year moratorium will give the state breathing room to study these challenges, hear from stakeholders and the public, and design new regulatory improvements that protect the state and the public interest
  • SB 99’s temporary moratorium is carefully targeted at the problem. The temporary moratorium on merchant transmission will NOT affect, in any way, the usual transmission upgrades that are necessary to keep the lights on

IT’S TIME FOR NEW HAMPSHIRE TO TAKE A PAUSE. WE HAVE TO GET THIS RIGHT. WE CAN’T AFFORD TO GET IT WRONG. SURELY THE PUBLIC INTEREST IS MORE IMPORTANT THAN DEFERRING PRIVATE DEVELOPERS’ PROFITS FOR ONE SHORT YEAR?

A temporary moratorium will encourage responsible transmission investment that protects critical state interests

  • Sound regulation and sound investment go hand in hand
  • SB 99’s temporary moratorium will allow for the necessary studies, public input and policy development to form the foundation for a sound New Hampshire approach to merchant transmission development
  • Responsible long-term developers should prefer a carefully-developed, thoughtful, balanced regulatory structure as opposed to a faulty one that may be exploited today but may cause a broad backlash tomorrow
  • We understand that political theater requires transmission developers to “cry wolf” and claim that even a one-year moratorium will somehow seriously damage their businesses or “chill” the New Hampshire business climate
  • This is simply untrue, and fortunately there are recent case studies to prove it. Let’s look just at our region:
    • Maine adopted a temporary moratorium on transmission. Did this stop transmission development in Maine, such as the merchant Northeast Energy Link project?  NO!
    • New York adopted a temporary moratorium on transmission. Did this stop transmission development in New York, such as the merchant Champlain-Hudson Power Express project?  NO!
    • Connecticut adopted a temporary moratorium on transmission. Did this stop transmission development in Connecticut, including the Cross-Sound project? NO!
  • Another element of political theater is for a transmission developer to claim “SB 99 is unfair because it targets only my project!
  • This is obviously untrue. As regards transmission, SB 99 addresses a broad policy issue – the gold rush of merchant transmission, and the need to update and upgrade the state’s regulatory approach

SB 99’s temporary moratorium, by allowing for the development of a sound regulatory approach to merchant transmission development, will ultimately create a fairer balance between the interests of transmission developers and the public. This will foster more regulatory certainty and less regulatory risk and will improve New Hampshire’s business climate and reputation


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