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Committee retains controversial PPA bill after debate on market and ratepayer risks
Summary
Lawmakers retained Senate Bill 112, which would expand long-term purchase power agreements to a broader set of generation resources and add the Department of Energy to procurement processes; the committee voted 10‑8 to hold the bill for further review.
Senate Bill 112, proposed to expand the types of generation that can be procured through long-term purchase power agreements (PPAs) and to add the Department of Energy to the entities that can solicit such agreements, was retained by the Science, Technology and Energy Committee after extensive testimony and debate about market effects and long-term risk to ratepayers.
Proponents described the bill as an enabling tool to reduce price volatility and to provide another procurement option for distribution utilities; critics warned that long-term contracts for existing generators could distort wholesale markets, discourage merchant investment and shift risk to ratepayers.
Senator Kevin Avard, the bill’s prime sponsor, said SB 112 “is designed to expand upon the type of electric generations that can be considered for purchase power agreements under New Hampshire RSA ...” and characterized the measure as “another tool in the toolbox” to address high electric rates. He said the proposal would extend enabling authority for long-term PPAs to a broader set of energy sources and noted it mirrors similar provisions being considered elsewhere.
Dan Phelan, regional policy director for the Department of Energy, testified the department took a neutral stance and said a key difference from recent law is that the bill removes the near-term sunset date for the PPA authority — language he described as creating an open-ended procurement mechanism. "The bill eliminates the time period ... which is fast approaching," Phelan said, warning the change would create a procurement authority without the earlier statute’s time limit.
Representatives of generators and owners emphasized the tool’s potential to provide price stability. Bruce Berkey, representing NextEra Energy Resources (the majority owner of Seabrook Station), called SB 112 “an enabling act” and said PPAs can “bring stability and protect against market volatility.” He also suggested limiting how much of the annual statewide cap one existing resource could consume so that new developers would still have room to compete.
Industry critics and market participants urged caution. Molly Connors of the New England Power Generators Association (NEPGA) said her association opposes the bill. She warned that long-term, out‑of‑market contracts can “undermine the economics of the power plants that don't have a contract” and argued that such contracting risks suppressing wholesale prices and making it harder for merchant plants that rely on competitive markets to recover costs. Connors said those dynamics could reduce investment in needed generation and lead to expensive, untargeted subsidies.
Utility testimony was mixed. Michael Licata of Eversource said his company was neutral: utilities retain discretion about whether to issue solicitations and file contracts for approval, and Eversource preferred clarity on the bill’s language about whether the Department of Energy would act jointly with utilities or independently if the authority were broadened.
Committee members focused questioning on several features: the existing annual megawatt-hour cap (discussed as roughly 2,000,000 MWh, or about 15–20% of New Hampshire load), the length of potential contracts (20 years remains in statute for some contracts), whether adding existing generation would crowd out new resources, and how the Department of Energy’s role would operate in practice.
On procedural action, Representative Bernardi moved that the committee retain SB 112 for further study; Representative Matson seconded. On the roll call the committee adopted the motion to retain by a vote of 10‑8. The bill will remain with the committee for additional work and possible amendment rather than being reported out for a floor vote.
Supporters said the bill could help secure long-term price stability in periods of extreme market volatility; opponents said it risks shifting merchant/market risk back to ratepayers and could depress market prices and investment. The committee’s retain vote reflects those unresolved policy tradeoffs and sets the bill up for further committee-level negotiation in the coming months.
