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PNE claims foul play by PSNH

New Hampshire Union Leader

February 22. 2013 11:07PM

CONCORD - Deregulation of the electricity market in New Hampshire has hit a speed bump, with 8,500 households caught in the middle of a scenario no one anticipated when customers were given the option to choose an alternative to Public Service of New Hampshire for energy supply more than a decade ago.

One of those competitive suppliers, PNE Energy Supply of Manchester, had to withdraw from the market on Feb. 14 due to financial problems. PNE was in the process of selling its customer accounts to FairPoint Energy, but only 1,200 of the 8,500 PNE accounts were transferred to FairPoint before PNE suspended operations.

The rest were transferred to PSNH by the independent system operator for the New England power grid (ISO-NE), which did what it was supposed to do ­- transfer customers to the default provider if the competitive provider gets into trouble, so the lights stay on.

PNE and its broker, Resident Power, are crying foul. In a petition filed with the Public Utilities Commission on Friday, they suggest PSNH dragged its feet in moving customers over to FairPoint Energy, in anticipation of the ISO action.

No matter who provides the power, PSNH transmits it, takes the meter readings and sends the bills. So its cooperation is necessary in any customer switch-over for the energy service portion of the bill. Accounts have to be accessed, rates changed and names of new energy providers added.

In its emergency petition, Resident Power, which sold PNE as an electricity provider, is asking for authority to continue the transfer of the remaining 7,300 PNE accounts to FairPoint, even though they are now with PSNH, without facing "slamming" charges.

Slamming is an illegal practice in which customers are switched from one service provider to another without the customer's prior approval. Resident Power hopes to avoid the time and expense of contacting each of the remaining 7,300 customers, and feels it has a right to continue the transfer to FairPoint that was in play before the ISO action.

Attorney Robert Cheney, with Sheehan, Phinney, Bass and Green of Manchester, argues in the PUC petition that transfer of the accounts does not constitute slamming and is in the best interest of the customers involved, because they are now paying higher energy service charges with PSNH than could be made available by Resident Power.

Different messages

PSNH spokesman Mike Skelton accused Resident Power of attempting to shift blame to PSNH for a problem that was created by their energy supplier, PNE.

"PSNH was in the process of transferring customers from PNE to FairPoint in accordance with normal market rules when PNE made a business decision to walk away from its customers," he said. "We stepped in, per ISO New England rules, to serve these customers as the default energy supplier. Up to that point we had expended enormous amounts of resources over a holiday weekend to comply with the process and move customers over and ensure their bills would be calculated correctly. This was not our business deal, but we were left to clean up the mess."

Skelton said PSNH would not respond to legal claims in the Resident Power petition. "We will await the PUC decision and responding accordingly," he said.

Meanwhile, electricity customers have been confused by different messages in the past week from the PUC, from PNE and from Resident Power.

On Feb. 11, PNE notified its 8,500 customers that their accounts were being transferred to FairPoint Energy, with their rates protected, as allowed in their terms of service. On Feb. 20, all but 1,200 of them got a message from Resident Power telling them the transfer of their account from PNE to FairPoint didn't go through, and that they are back with PSNH at higher rates. The letter encouraged them to authorize Resident Power to place them with a new provider at lower rates.

On Feb. 21, the PUC posted on its website "Important Information for Customers of PNE Energy Supply and Resident Power," stating that "for all but 1,200 of PNE's former customers, electric energy service is now being provided by PSNH. Your account will not be automatically transferred to FairPoint Energy."

Battle over charges

Beyond the confusion the situation has created, is the larger question of whether PSNH is obstructing customer transfers to competitive providers through unreasonable fees and delays, which would undermine the whole premise of deregulation.

Gus Fromuth, managing director of PNE, is waging that battle against PSNH in a docket that has been before the PUC since Oct. 1, for review of "the reasonableness of Public Service of New Hampshire's (PSNH's) charges for selection, billing and payment and collection services to competitive electricity suppliers."

Joining PNE in the complaint are the Retail Energy Supply Association, which represents competitive energy suppliers, and two of the most active competitors in the New Hampshire market - ENH Power and North American Power and Gas.

Fromouth said PSNH, which is supposed to be the "agnostic gatekeeper" in the deregulation process, has not been agnostic at all, and used the PNE situation as an example.

"When we approached PSNH about accommodating the PNE/FairPoint deal by porting over the entire bundle of 8,500 customers, they said that it would be a very resource-intensive process to do that and they would have to charge us accordingly," he said, "whereupon a $60,000 offer was made, to pay for their overtime. It took them two or three days to come back and say, 'We can't do that,' and then the customers all come back to them en masse from ISO."

The Office of Consumer Affairs in the PUC provides a list of authorized energy brokers and competitive suppliers, on their website,

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