Another View -- Michelline Dufort: Consumers would save if PSNH sold its power plants
There is a lot being said this week about PSNH power plants, the reliability of energy during a long and cold winter, and also about the challenges New Hampshire faces with a lack of adequate gas delivery.
All of this comes upon the heels of a release of a report by the staff of the New Hampshire Public Utilities Commission (PUC) addressing “whether it is now in the economic best interests of PSNH’s retail customers for the company to complete restructuring and divest its interest in its generation plants.” It also comes at a time when the state Senate is considering House Bill 1602, which would be a pathway to a final conclusion on whether PSNH should face divestiture, or in other words, sell off its remaining power plants. To do so, it would complete the electric restructuring process in New Hampshire.
The PUC staff report concluded that divestiture is in the ratepayers’ best interests given the terrible economics of PSNH power plants, reasonable stranded cost estimates, and various other factors:
“Staff continues to believe that over the long term, PSNH’s default service rate will be substantially higher than market prices, resulting in continued upward pressure on default service rates,” the report concluded, adding, “Staff’s rate analysis indicates that PSNH’s default service customers would be better off under a divestiture of the PSNH assets ....”
And although certain individuals, including Charles Arlinghaus in his April 2 Union Leader column, “For now, PSNH’s Bow plant saves ratepayers millions,” disagree, there is overwhelming evidence that the PUC staff is right. Even under this winter’s extreme circumstances, PSNH’s Bow and Portsmouth power plants do not pose a value proposition for consumers. Despite PSNH’s plants’ supposed value this winter, PSNH default customers were still paying as much as 10 percent more than the rates of other utilities and competitive suppliers during that time.
In fact, much of the year, these old and inefficient power plants sit idle as New England’s competitive market churns out plenty of more affordable and cleaner electricity. PSNH rates will climb even further as time goes on and especially when its scrubber project is added to rates.
Only full divestiture of PSNH’s generating assets will effectively address this long-standing issue. In the meantime, the utility’s customers increasingly are choosing more cost effective and cleaner electricity options from competitive suppliers, leaving fewer and fewer PSNH default customers to bear the financial burden of the utility’s aging power plant fleet.
Thus far, about 100,000 PSNH residential consumers have made the switch. It’s the same switch that the overwhelming majority of business customers have made as well. The big picture that these consumers see is that a competitive market will save even more money for consumers and New Hampshire’s economy in the long run, just as in other markets.
Now is the time to conclude the restructuring process envisioned by New Hampshire’s 1996 electric industry restructuring law and require PSNH to divest its power plants. The utility’s customers should not be burdened with the escalating financial risks of PSNH power plants. HB1602 is the right route on the road to effective competition, consumer savings, and a stronger New Hampshire economy.
Michelline Dufort of Concord is manager of the EmpowerNH Coalition.