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Environmental group, ratepayers push back on PSNH rate hike

New Hampshire Union Leader

January 30. 2013 9:54PM

CONCORD - An environmental group and six ratepayers are challenging increases in Public Service of New Hampshire energy charges recently approved by the Public Utilities Commission.

In a motion filed with the PUC on Jan. 28, the Conservation Law Foundation and the ratepayers ask the commission to reopen hearings and revoke a 34-percent increase in PSNH's energy service rate, granted on Dec. 28.

The environmental group claims PSNH was not eligible for a rate increase because it failed to meet a September 2012 deadline for a long-range planning document required by law to prove that the company is pursing the lowest cost options. The company last filed a "least cost integrated resource plan" in September 2010.

In an order issued on Jan. 29, the PUC accepted the resource plan filed in 2010, and granted PSNH an extension to September 2013 for the mandatory biennial update.

"The PUC had a case that started in 2010, with final briefings in June of 2012, that they didn't act on for seven months," said Jonathan Peress, head of CLF's Clean Energy and Climate Change program, in regard to the resource plan review. "Then the day after we file this motion for a rehearing, they issue a decision ... I think it's curious."

A PUC spokesperson responded that the order on the long-range plan is unrelated to the CLF filing.

Even though the utility now technically has a long-range plan on record accepted by the PUC, Peress said his group's motion still stands.

He said the PSNH resource plan was not approved at the time its rate hikes were implemented, and it is still not fully approved despite the Jan. 29 PUC order, which acknowledges that continued operation of coal-fired plants in Newington and Bow were not addressed.

"The commission will issue a companion order on issues relating to (continued operation) for Newington and other PSNH generating units at a later date," the order states.

"Here's the bottom line," Peress said, "PSNH's expensive, inefficient and dirty power generation is needlessly extracting hundreds of millions of dollars from ratepayers for the profits of shareholders. The commission has an opportunity to address this again through our appeal. Thus far, they seem somewhat reluctant. They've had no less than five dockets in which they could address this issue (of the coal-fired plants), and they continue to defer."

PSNH spokesman Martin Murray cited the company's response, which states, "The motion is nothing more than a re-assertion of prior arguments that were rejected by the commission."

He said the least-cost plan was pending at the PUC while the energy service charge was being considered, and the PUC was authorized to approve the increase while the review was under way.

"The CLF is trying to broadcast a flawed legal theory that the PUC has previously considered and rejected," he said.

Separate investigation

The PUC on Jan. 18 did open an investigation into whether PSNH can provide competitive electric rates to its customers. The order opening the investigation acknowledged that market conditions have changed significantly since a 2003 law was passed allowing PSNH to retain generating plants.

The regulatory agency on Dec. 28 approved a PSNH energy service charge of 9.54 cents per kilowatt hour for the first half of 2013, up from the 2012 energy charge of 7.11 cents per kwh.

The increase in the energy service charge will be offset to a degree by a significant reduction in the charge for stranded cost recovery, designed to compensate PSNH for costs brought about by deregulation of the energy industry in New Hampshire.

The stranded cost recovery charge was approved at .737 cents per kwh, compared to 1.88 cents per kwh in 2012. A customer using 500 kilowatt hours per month will see their total monthly bill go up from $86.35 to $92.43, an increase of about 7 percent.

With natural gas prices at historic lows, competitive energy suppliers have been undercutting the PSNH energy charge for months, causing a large number to make the switch. As the PSNH energy charge goes to 9.54 cents per kwh, competitors like ENH are offering energy rates at 7.28 cents per kwh.

By the end of last year, 47,191 PSNH customers, or nearly 10 percent of its customer base, had switched to unregulated competitors for their energy supply. PSNH still makes money on transmission and stranded costs.

Nearly 50 percent of all the energy PSNH transmits to residential and commercial users is now provided by competitors, triggering alarm at the PUC over continued "customer migration" that leaves a smaller and smaller portion of the market with a growing portion of PSNH costs.

The New Hampshire ratepayers joining the CLF in its motion for rehearing on the PSNH energy rate are Alexandra and James Dannis of Dalton; William Hopwood of Elkins; Janet Ward of Contoocook; Amy Matheson of North Hampton; and George Chase of Hopkinton.

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