Lumber, forestry and school officials urge lawmakers not to strip thermal renewable credits; critics call program a hidden subsidy

Representative John Harrington reopened a continuation of the public hearing on House Bill 567 FN, which would eliminate certain renewable‑energy classifications that currently allow heat generated from wood and other thermal sources to earn renewable energy credits. Harrington described the thermal credits as “one of the worst examples of government” and said they amount to a hidden subsidy baked into electric rates.

The hearing drew more than a dozen witnesses who either backed or opposed the bill. Jason Stock, executive director of the New Hampshire Timberland Owners Association, testified in opposition, saying HB 567 would do more than change thermal credits: “It completely eliminates class 3, which are the existing biomass plants, which do produce electricity,” he said, adding that the change would threaten local jobs, taxes and forest‑product markets.

Foresters and industry witnesses offered technical and economic details meant to counter the bill’s critics. Forester Charlie Niebling told the committee that modern wood‑heating and combined heat‑and‑power projects in New Hampshire currently total about 57 megawatts of installed capacity and that several projects displace large volumes of imported fuel oil or propane — Niebling cited examples of projects that would reduce heating oil or propane use by tens of thousands of gallons per year. He and other industry witnesses said those projects keep fuel dollars in local economies and support loggers and sawmills.

Manufacturers, installers and municipal customers described how REC revenues factor into project finances. Installer Mark Froling said most of the T‑REC proceeds go back to the public entities that host systems — citing examples, he said a single school district currently receives several thousand dollars annually in T‑REC payments that are used for operations and to pay down capital costs. Several witnesses warned that removing T‑REC revenue would force schools and counties to replace that income with taxpayer dollars or forego projects.

Proponents of keeping thermal in the Renewable Portfolio Standard (RPS) argued the program spurred innovation and localized renewable fuel use. Witnesses pointed to sawmills and manufacturers — cited in testimony as Durgin & Kroll and Bridal Lumber, among others — that have invested in wood boilers and in some cases combined heat‑and‑power to reduce purchased fossil fuels. Jason Stock said USDA forest inventory data show the state’s forest growth currently outpaces removals, a point used to argue for sustainable wood supply for thermal use.

Those opposing the thermal classification said burning wood produces carbon dioxide and that electricity ratepayers should not be subsidizing wood‑fuel projects that principally deliver thermal energy rather than electricity. Representative Harrington pressed that electric customers are unaware they may be paying higher rates to support thermal credits and urged either a tax‑funded subsidy or removal of the program.

Department of Energy regulators and others acknowledged program complexities. Witnesses noted past PUC and legislative work to define and verify thermal generation, that the RPS has multiple “classes” (class 1, class 3) for different resources, and that recent rulemaking intended to expand meter and verification options for smaller systems is still in progress. Several speakers asked the committee to avoid changes that would destabilize investments made on the basis of existing law.

The hearing record included repeated requests from the industry side for a measured approach that maintains incentives while exploring verification and efficiency standards for thermal systems. Critics continued to press for transparency on how costs flow to electric bills.

The committee did not take action on HB 567 at the hearing; testimony will remain in the record for the committee’s later consideration.