Environment
6:22 pm
Wed October 16, 2013

Lawmakers Look To Keep The Door Open To PSNH Action

The scrubber on Merrimack Station drives much of the difference in PSNH's rates vs. those of competitors.
The scrubber on Merrimack Station drives much of the difference in PSNH's rates vs. those of competitors.
Credit Christian Patti / http://christianpatti.com/

Since June New Hampshire lawmakers have been grappling with what to do about the persistently above market cost of electricity at the state’s largest utility, Public Service of New Hampshire. Now the legislative committee wants advice from regulators to see if selling PSNH’s power plants is the solution, but that advice may be slow in coming.

At the beginning of the summer, a preliminary report from PUC regulators suggested a crisis was brewing. Higher cost electricity has PSNH customers fleeing the utility, leaving ever fewer people to pay for the fixed costs of owning power plants, and sending electric rates skyward. It’s been called a death spiral, and policymakers were suddenly afraid that it truly had come to pass.

On Wednesday afternoon, a legislative committee put forward drafts of a letter asking the PUC to take action and “conduct the necessary analysis to determine whether it is now in the economic interests of PSNH’s retail customers for the company to complete restructuring and divest its interest in its generation plants.” Basically they want regulators to come up with a report on whether ratepayers would save money if PSNH sold its power plants.

And they want it soon: no later than April 1st, 2014.

The timetable is because members of the committee hope to be able to take action. If the PUC so recommends, they would propose a solution during the upcoming legislative session, which will begin in January and end in early summer.

What’s more, at least some lawmakers, want PSNH shareholders to know that they should expect to take a hit in order to help bring down costs for customers.

“We’re looking at overall costs are almost twice as high, and an actual electricity cost to customers that could be seven times as high,” says Republican Senator Jeb Bradley, referring to the costs associated with the mercury scrubber that PSNH was mandated to install at its biggest power plant, in Bow.

Whether or not it was prudent to install that scrubber and how much customers should pay of the scrubber’s $422 million price tag is an issue likely headed to the state Supreme Court.

“PSNH has to share a significant portion of that burden,” says Bradley, who wants the committee to sign off on language stating that if PSNH sells its plants, lawmakers would expect the company to eat some of the scrubber costs.

But the advice the legislature would seek might be slow coming. PUC regulators are moving to assess how much the power plants are worth, but a lot of work needs to be done by the April 1st deadline. That’s especially true because Public Service will likely appeal some findings along the way, arguing that its power plants are an important hedge against volatile natural gas prices.

That’s PSNH’s right, “and it is very difficult for the commission to force parties to move very quickly when still accommodating all of those rights,” says Anne Ross, General Counsel for the PUC, “So you can give us a deadline but whether or not we can meet it is another question.”

If the deadline blows by lawmakers will have to decide what to do about PSNH without all of the information they want. Or, they will have to let the issue slide until another year.

Meanwhile, the battle over who will pay for the scrubber has ground to a halt as all participants wait for the Supreme Court to decide if it will take up an appeal that PSNH has lodged midway through the process.

That’s got the state’s Consumer Advocate, Susan Chamberlain, concerned that problem could only get worse in the interim. “I think the longer we delay on making a determination on these costs the higher the costs will be and the fewer people will be left to pay these costs,” says Chamberlain.

Any day now a quarterly report on how many customers have left PSNH for lower electricity costs is due out. It will be a glimpse into whether the company is indeed continuing what so many have called its death spiral, or if time is on policy makers – and Public Service’s – side.