House committee hears hours of testimony for and against ending 'useful thermal' renewable credits

Concord — The House Science, Technology and Energy Committee reopened public testimony on HB 567 FN on Feb. 10, 2025, a bill that would eliminate the “useful thermal” portion of New Hampshire's Renewable Portfolio Standard (RPS) and remove incentives for biomass and some wood‑heat projects. Testimony included sawmill operators, foresters, heating‑system contractors and timberland owners urging the committee to retain thermal credits, while Representative Timothy Harrington (R) sharply criticized the thermal REC mechanism as a hidden subsidy charged through electric rates.

The bill drew the largest turnout of the morning session and more than an hour and a half of oral testimony, with detailed technical, economic and environmental arguments on both sides. Supporters — including Jason Stock, executive director of the New Hampshire Timberland Owners Association, and forester Charlie Niebling — told the committee thermal RECs are enabling investments in wood‑fired boilers, combined heat and power projects, and woodfuel markets that pay local loggers, mill employees and municipalities. Stock said HB 567 “does more than just modify the thermal REC portion of Class I — it would also eliminate Class III biomass plants” and warned that removing the incentives would “stifle…innovation” and threaten local jobs and forest‑management markets.

Representative Harrington framed his opposition in sharply critical terms, calling the thermal REC carve‑out “one of the worst examples of government” and saying the cost is effectively bundled into electric bills as a hidden subsidy. Harrington argued the program favors a narrow industry and that wood combustion “does give off carbon dioxide,” and therefore should not be treated the same as non‑combustion renewables in electric rate constructs. He told the committee he would prefer any subsidy for wood fuels to be explicit in statute or appropriations rather than embedded in utility rates.

Committee members pressed witnesses on several recurring questions: what energy and carbon accounting governs qualifying thermal systems; whether the program is producing enough thermal RECs to meet statutory targets; and what economic effects a change would have on sawmills, school boiler projects and county facilities. Charlie Niebling and others provided data the committee can reference: Niebling said the combined installed nameplate capacity for modern biomass and geothermal thermal systems eligible for T‑RECs is about 57 megawatts and that participating facilities spend roughly $7 million annually on locally sourced chips and pellets, displacing more than 4.1 million gallons of heating‑oil equivalent fuel per year.

Manufacturers and installers of wood heating systems emphasized the role of the incentives in reducing the up‑front capital barrier: testimony from installers described projects that use T‑REC revenue to shorten payback periods for capital‑intensive biomass or pellet systems. Mark Froehling, an installer who said “about 80% of the REC revenue” from his firm’s projects flows back to municipal and school project budgets, warned that removing the incentive would shift those savings to taxpayers in the form of higher school and municipal operating costs.

Opponents to the bill argued the T‑REC carve‑out supports rural economic development and active forest management. Jason Stock and other timber representatives told the committee that without dependable markets for low‑grade wood (chips and residues), small operators cut chipping crews and logging capacity declines, which then reduces supply for sawmills and increases pressure on forest health interventions such as thinning to reduce wildfire or pest vulnerability. Several witnesses cited U.S. Forest Service inventory data showing net growth exceeding removals in New Hampshire forests and argued sustainably managed harvest and local use of wood fuel can be carbon‑balanced over time.

Committee members also asked technical questions about metering, eligibility and program capacity. Witnesses noted ongoing work on thermal metering rules, which proponents said could expand the eligible pool of smaller projects once alternative verification methods (to BTU meters) are finalized. At least one supporter recommended restoring federal tax treatment (investment tax credit eligibility) that had been curtailed for many high‑efficiency heat‑only systems, as a lever to restore private capital incentives.

Where it stands: The committee recessed HB 567 testimony to hear other bills and to complete an already busy agenda. No final committee action on HB 567 was recorded during the Feb. 10 session.

Votes at a glance (executive sessions held Feb. 10): - HB 575 FN (prohibiting offshore wind infrastructure): motion to ITL adopted, 16 yes – 1 no. (Committee vote recorded during executive session.) - HB 654 FN (group net metering changes for small customer generators): motion to ITL adopted, 12 yes – 5 no. - HB 541 (energy/telecommunications survivability study): motion to ITL adopted, 17 yes – 0 no. - HB 224 FN (renewable energy fund changes; amendment adopted; OTPA as amended): committee adopted Ought to Pass as amended, 10 yes – 7 no. (The committee adopted a sponsor amendment that would rebate some REF monies to retail electric ratepayers and preserve some program funding; the committee report assignments were made.) - HB 460 FN (distributed energy resource investments): motion to ITL adopted, 10 yes – 8 no.

Why it matters: HB 567 intersects energy, forestry, rural economies and ratepayer policy. The committee heard detailed local‑economic and technical testimony: sawmill and loggers’ livelihoods, school boiler projects and county energy users are directly tied to the current REC structure, while opponents argued the thermal REC carve‑out is a cross‑subsidy introduced through electric rates. The committee will have to weigh whether the program’s local economic and resilience benefits justify the costs allocated through retail electric bills, and whether alternatives (explicit appropriations, different tax credits, or tighter efficiency and emissions criteria) would better align incentives and transparency.

What to watch for next: The committee has not taken final action on HB 567. Members asked for more data on program volumes, compliance obligations, the number of thermal RECs available versus statutory targets, and the status of metering verification rulemaking at the Department of Energy. Those materials — and any fiscal or rulemaking analyses — will likely shape the committee’s next steps.