By William Opalka
A New Hampshire energy broker wants to dust off a so-far unused 1978 state law that allows small hydroelectric power producers to sell electricity directly to customers.
Freedom Energy Logistics wants to purchase power from the Fiske Hydro Project in Hinsdale to power its offices in Auburn, about 88 miles away.
The Limited Electrical Energy Producers Act, which was intended to diversify the state’s resources, is limited to plants that produce up to 5 MW and sell to up to three customers. Under the law, the distribution utility — in this case, Eversource Energy — would only be paid for wheeling power over its wires but would otherwise be cut out of the transaction.
Because no proposals were ever brought before state regulators, however, ground rules have yet to be written. Thus, while the FEL proposal involves only a small amount of energy — 5 kW — it has implications for future, larger transactions.
A prehearing conference May 6 laid out the rationale for the proposal, which is expected to be fleshed out in a proceeding before the Public Utilities Commission this summer (DE 15-068).
“What we would like to do is to say ‘Okay, this law has been on the books forever. And, we would like once and for all to try to apply it, because we finally think the time has come to do that,’” FEL attorney James Rodier said at the conference.
“If other small hydro producers can follow in our footsteps, it’s going to make a terrific difference to the economics of these small projects,” added Cameron MacLeod of Fiske.
Under the agreement between FEL and Fiske, Rodier said the electricity generated by the dam, including any excess, would be delivered to FEL by the distribution utility.
How the excess generation is compensated will have to be determined. Rodier’s proposal would base compensation on avoided costs, the method used by small generators on net metering. “Are we going to be able to spin the meter backwards? That’s a big issue,” Rodier said at the conference.
Rodier told the New Hampshire Union Leader that his company has clients “very interested” in striking similar deals. “But they know there will be a challenge from Eversource, so no one wants to be the ones to go in and make this happen,” he said.
Eversource, an intervener in the case, had little to say at this early stage of the process. Its attorney, Matthew Fossum, said at the conference that he needed to learn more about the proposal’s relationship with net metering.
“We also have some questions about how this would actually work from a billing perspective, and what it would mean for attempting to bill a transaction like this, or some variation of it,” he said.