Last month, New Hampshire's Gov. John Lynch announced that 25-percent of the electricity powering the state's government buildings will now come from wind power.
Following a competitive bidding process the state signed a $4.4 million load-service contract with ConEdison Solutions , to supply electricity from both renewable and traditional fuel suppliers in the period from July 1, 2009 to May 31, 2010.
Lynch touted the agreement as "...another step in our efforts to protect our economy and our natural resources by ensuring 25 percent of the electricity used by state government comes from clean, renewable wind power."
The specifics of the contract are straightforward. The state locked-in its purchase of 47,352,000 kilowatt hours (kwh) at a fixed price of 9.2 cents per kwh. The price was all-inclusive and did not distinguish between electricity acquired from wind versus that from other fuel sources. Any added charges associated with transmission or distribution of the energy were excluded from the price and will be billed separately by the local utility.
The state's Energy Manager, Karen Rantamaki, told Windaction.org that New Hampshire had been purchasing its electricity from Unitil Corporation. When asked what the State would have paid in electricity costs had it stayed with Unitil she directed us to Unitil's website.
What we found surprised us.
Unitil's large customer prices are well below 9.2 cents per kwh. And with natural gas prices at a seven-year low and expected to remain depressed for the next 6-18 months, we anticipate electricity prices to remain stable[1]. New Hampshire's decision to sign with ConEdison appears less about saving taxpayer money and more about buying wind.
So what exactly did New Hampshire purchase for the higher electricity prices? Not much.
According to ConEdison Solutions, the "wind power" it sells is derived from its partnership with Community Energy, Inc., (owned by Spanish energy giant Iberdrola S.A.) who buys and sells renewable energy credits (RECs) from around the country.
We asked ConEdison Solutions the following four simple questions that NH's Ms. Rantamaki could not answer for us.
Question 1: Where are the wind facilities located that will be supplying the electricity?
Answer: The bulk of the RECs ConEdison sold in the last year came from Texas.
Question 2: When will the electricity be generated?
Answer: All renewable energy credits ConEdison sells are certified by GREEN-E. According to GREEN-E, certified RECs "include only renewables that are generated in the calendar year in which the REC is sold, the first three months of the following calendar year, or the last six months of the prior calendar year". For New Hampshire, the wind energy must be produced in the period from July 1, 2008 to March 31, 2010.
Question 3: What is the price of each REC?
Answer: National Green-e Certified Wind RECs are trading between 0.0012 cents and 0.0015 cents per kilowatt hour. At 0.0015 cents per kwh, the RECs acquired by New Hampshire would have a total market value of just under $18,000.
Question 4: Since the wind projects are already operational, are there any assurances that the money paid for the RECs will go toward expanding wind power facilities?
Answer: No. There are no stipulations on how revenue earned through the sale of RECs is to be spent.
Given these facts, we wonder if Governor Lynch is even aware of the misrepresentations in his claim above.
For example:
1. Electricity produced by turbines in Texas stays in Texas. The ConEdison agreement will have no effect on the state's consumption of fossil fuel.
2. GREEN-E certified RECS sold to New Hampshire could well have been "created" entirely in the year leading up the contract being signed, demonstrating the irrelevancy of the ConEdison agreement relating to wind.
3. There is no way to show how paying higher electricity prices will protect the state's economy or its natural resources. In fact, the higher price per kwh locked-in with ConEdison will result in costs far exceeding the market value of the contracted RECs.
At a time when the state is struggling to meet its budget, the pricey ConEdison contract does nothing more than raise electricity prices, line the corporate pockets of REC brokers ConEdison Solutions and Community Energy, and provide Lynch the PR opportunity to flaunt his "greenness" before an un-informed public -- Greenwashing at its best!
[1] According to the ISO-New England's August 7, 2009 presentation (Slide 54), wholesale electricity prices in the region are closely tied to natural gas prices.