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Consumer advocate urges hearings on cost of environmental controls

New Hampshire Union Leader

October 14. 2013 9:02PM

CONCORD — The attorney representing consumer interests before the Public Utilities Commission is urging regulators to move forward with hearings to determine who is going to pay for environmental controls at Public Service of New Hampshire’s coal-fired power plant in Bow, even as the utility challenges the legality of that process before the N.H. Supreme Court.

At stake are millions of dollars in electric costs that consumers could pay if the PUC (or the court) decides they should shoulder some or all of the bill.

When PSNH was ordered by law to install the so-called “scrubber” on Merrimack Station in Bow, the legislation entitled the utility to recover its “prudent” investments in the project.

The PUC had hearings under way to determine just how “prudent” that investment was, and therefore how much of it ratepayers should pay for. PSNH has argued all along that ratepayers should pay for all of it, and last month filed an appeal with the Supreme Court to that effect.

The consumer advocate on the PUC, attorney Susan Chamberlin, is concerned that regulators will suspend the process pending the outcome of that appeal. She doesn’t think that would be in the best interests of ratepayers, and said as much in a letter to the commission’s executive director on Oct. 11, citing “a perfect storm” brewing against PSNH default service residential ratepayers.

“State law requires the costs of PSNH generation, including the scrubber, to be recovered from PSNH default energy service customers, the majority of which are residential customers,” she wrote. “This unfair cost burden exists now on (those) customers and continues to grow over time.”

Chamberlin expressed her fear that, given the suspension of the hearings, the case could outlast the 2014 legislative session with no resolution. That would mean more customers leaving PSNH energy service for competitive suppliers, even though PSNH continues to deliver the electricity.

Meanwhile, uncollected scrubber costs and interest continue to accrue, creating a ticking time bomb that, absent legislative action, will explode on residential electric bills, Chamberlin said.

“I’m concerned that the delays are going to run head-on into increased migration, and as migration increases, the number of customers decreases, and the cost on them accelerates,” she said.

She proposed that activity in the case resume no later than Nov. 22, with a four-day hearing on the merits of the case from Jan. 28-31.

PSNH officials were unavailable for comment on Chamberlin’s initiative, but in the past have proposed alternatives for recovering the scrubber costs, such as spreading them out over all customers in the PSNH franchise area, including those who purchase power from competitive suppliers.

“I would like the PUC to keep going forward as quickly as possible,” Chamberlin said. “I understand the argument that if the Supreme Court agrees with PSNH, then the scope of the docket would be very different, and that’s why they don’t want to go forward. I understand that, but that has its own consequences.”

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