Red Light, Green Light: Which New Energy Projects Should N.H. Approve?
The SEC Makes These Decisions, and Its Charter Needs Renovation
By Will Abbott
All new major energy facility projects present trade-offs between the need for energy and the natural environment. In New Hampshire we have created the Site Evaluation Committee (in RSA 162-H) to help maintain a balance between the two in the public interest. The SEC sits as judge and jury as a one-stop shopping mall for all permits a major energy facility requires in order to be built in the state.
As energy markets and consumer demands for energy change, the regulatory process that permits new energy facilities must adapt.As we move from a highly regulated electric marketplace to a less regulated marketplace, the law establishing the SEC needs some major renovations. The 2014 Legislature faces challenges to assure that the SEC effectively meets its charge. Here are four of the most critical renovations we need:
1. Restore a “needs determination” provision that used to be in the statute but was removed by successful lobbying of energy companies in 1998. Essentially current law gives an applicant seeking permits a complete pass on the issue of whether the project is needed. If the less regulated electric marketplace can finance the project, the law all but says the SEC should presume the project is needed. This is not the way to “maintain a balance between the environment and the need for new energy facilities” as the purpose statement of the SEC statute reads. The SEC should be required to make an independent determination of need for each project that applies for an SEC permit BEFORE deciding whether the applicant meets the other requirements of the law for a permit.
2. Change the size and membership of the SEC. Fifteen state agency commissioners and directors are tasked with serving on the SEC, often with a subset of the full group (a minimum of seven) reviewing each application. These agency leaders simply do not have the time to allocate from their primary duties to take on the SEC task. (One recent project required a full month of time from each of the state agency people serving on the SEC panel reviewing the project.) Furthermore, conflicts arise when an individual agency has a legal obligation to defend a particular interest and its commissioner must remain neutral because of his or her service on the SEC. The SEC must rely on state agencies for information with which to make its decisions; however, SEC decisions could be made by selecting five well equipped individuals from the public to do what now takes seven to 15 state agency heads.
3. Provide the SEC with resources to do its work. Important decisions are being made without any budgeted staff or financial resources to do the needed review. The applicant pays for studies ordered by the SEC, but the taxpayers pay for the time of the state agency heads who deliberate on applications.
There may be a more fair way to allocate application review costs between the taxpayer and the applicant, but the SEC must have resources sufficient to the task available to assure that it makes well informed decisions. Further, many SEC permits awarded require on-going monitoring to assure that conditions imposed by an SEC permit are adhered to. If there are no financial resources available to pay for this monitoring work, how is the public assured that this work will get done?
4. Assure that municipalities directly or indirectly impacted by a proposed project have a seat at the table where permitting decisions are made. The SEC under current law trumps any and all local zoning ordinances; yet, there is no process in place to assure that municipalities have a direct voice in the siting of a new energy facility within their region. The process needs to be re-aligned to provide municipalities a more direct say in the decision-making at the SEC on individual applications that affect municipalities, their residents and their taxpayers.
The current law has its strong points. The idea of one-stop shopping makes good sense for the permitting of new energy facilities, as long as the shopping experience addresses all public needs. The idea of an adjudicatory process for the SEC application review is healthy, as it assures that the process is fair, open and predictable for the public and the applicant. The existing criteria on which the SEC must base its findings for a final decision provide a good beginning framework.
To assure that the current SEC law properly meets present and future public needs of balancing the environment with needed energy facilities, the 2014 Legislature should review and renovate the SEC process as rigorously as it would have the SEC itself review new applications for new or expanded energy facilities in the state.
Will Abbott is vice president of policy and reservation stewardship at the Forest Society.