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October 18. 2011 11:17PM
Public Service of NH seeks rate hike on Jan. 1
CONCORD — Residential customers of Public Service of New Hampshire could see their electric bills increase about 4 percent beginning Jan. 1 due to the new emissions scrubber at the Merrimack Station generating plant in Bow.
The company intends to begin collecting its $430 million investment in the project. The company could not collect the cost from customers until they receive a benefit, and the company determined the benefit began Sept. 28.
As a result, Public Service filed a preliminary estimate for the cost of energy service with state utility regulators on Friday. The new estimate including the scrubber is 9.57 cents per kilowatt hour, up from an earlier estimate of 8.39 cents filed last month. Residential customers currently pay 8.89 cents a kwh for energy service.
The new rate will increase the bill of a typical residential customer using 500 kwh by $3.77 a month, and by $5.28 a month for a residential customer using 700 kwhs.
Public Service spokesman Michael Skelton said customers are currently receiving the emissions reduction benefit from the scrubber so the company can begin to recoup its investment. The scrubber will be fully operational sometime in 2012, Skelton said, once testing is complete.
The scrubber system is meant to remove 80 percent of the mercury and 90 percent of the sulfur emissions from flue gases at the coal-fired plant.
It was installed to comply with a state law passed in 2006 that required the scrubbers to be in place by July 2013, but provided incentives for early completion. The company is likely to receive a 1.1 emissions reduction credit for every pound of mercury removed prior to July 2013.
The new rate will affect bills beginning Jan. 1, Skelton said, and the company will file additional information with the Public Utilities Commission before a December public hearing on the proposed rate. The filing will include up-to-date information on fuel costs and energy market prices, he said.
According to testimony filed with the PUC, the company will recover the cost of its investment or depreciation, its financial rate of return on the investment, 9.322 percent, and operating and maintenance costs.
The total estimated cost associated with the scrubber to be included in next year's electric rates is $61.8 million.
The company intends to begin collecting its $430 million investment in the project. The company could not collect the cost from customers until they receive a benefit, and the company determined the benefit began Sept. 28.
As a result, Public Service filed a preliminary estimate for the cost of energy service with state utility regulators on Friday. The new estimate including the scrubber is 9.57 cents per kilowatt hour, up from an earlier estimate of 8.39 cents filed last month. Residential customers currently pay 8.89 cents a kwh for energy service.
The new rate will increase the bill of a typical residential customer using 500 kwh by $3.77 a month, and by $5.28 a month for a residential customer using 700 kwhs.
Public Service spokesman Michael Skelton said customers are currently receiving the emissions reduction benefit from the scrubber so the company can begin to recoup its investment. The scrubber will be fully operational sometime in 2012, Skelton said, once testing is complete.
The scrubber system is meant to remove 80 percent of the mercury and 90 percent of the sulfur emissions from flue gases at the coal-fired plant.
It was installed to comply with a state law passed in 2006 that required the scrubbers to be in place by July 2013, but provided incentives for early completion. The company is likely to receive a 1.1 emissions reduction credit for every pound of mercury removed prior to July 2013.
The new rate will affect bills beginning Jan. 1, Skelton said, and the company will file additional information with the Public Utilities Commission before a December public hearing on the proposed rate. The filing will include up-to-date information on fuel costs and energy market prices, he said.
According to testimony filed with the PUC, the company will recover the cost of its investment or depreciation, its financial rate of return on the investment, 9.322 percent, and operating and maintenance costs.
The total estimated cost associated with the scrubber to be included in next year's electric rates is $61.8 million.
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