Bill aimed at resolving electric rate uncertainty clears key hurdle in House committee, 18-1By DAVE SOLOMON
New Hampshire Union Leader
May 26. 2015 8:28PM
CONCORD — Legislation intended to resolve uncertainty about electric rates cleared a key House committee on Tuesday, but the battle over restructuring the state’s largest utility is far from over.
The House Science, Technology and Energy Committee voted 18-1 to recommend the full House approve SB221, as amended.
The bill, which has already passed the Senate, sets the stage for a “universal settlement” with Eversource Energy on a variety of issues that threatened to pit the utility once known as PSNH against regulators in lengthy and costly court battles.
After the bill passed the Senate, amendments were proposed that would clarify the role of the Public Utilities Commission as the final arbiter of the agreement, no matter what the Legislature does. Some lawmakers were concerned that the legislature might tie the hands of regulators if the law was not worded properly.
That wording was among the key issues that held up the bill at the last minute when it was scheduled for a vote by the House energy committee last week. The bill’s prime sponsor, Sen. Jeb Bradley, R-Wolfeboro, promised revised language acceptable to all stakeholders by May 26, and he delivered.
“I commend the House for what they did, refining the proposal and trying to address some of the issues that were raised in the Senate,” Bradley said. “We reached a settlement in early March and it had to be on the Senate floor a couple of weeks later, so there wasn’t as much time to do what the House did.”
Heading for the House
The bill is now expected to come up for a full House vote next week, after which the Senate is expected to concur with the House amendments and send the bill to the governor, whose office of energy and planning supports the legislation.
If it becomes law, SB221 sets into motion a process by which Eversource will sell off all its power plants and purchase electricity on the wholesale market, like the state’s other three utilities. It authorizes the issuance of state bonds to finance the deal, if it comes to pass.
The amendment approved on Tuesday ensures that the PUC will have the final word on the terms of the divestiture settlement. SB221, if it becomes law, now merely authorizes the state to issue bonds to finance the deal, if it is approved.
“The wording is designed to make sure the commission has the authority it needs to condition the settlement, reject the settlement or approve the settlement,” Bradley said.
A big part of that process will be determining how the costs of the settlement are distributed among various classes of ratepayers. In its initial versions, the settlement called for the costs to be shared equally by all classes of ratepayers through a “stranded cost” charge that all customers would pay.
Big industrial customers complained that would cause too much of an increase in electricity costs, which are already among the highest in the nation, so new language was proposed that would impose a larger share of the cost on residential customers.
That issue is likely to move front and center as hearings begin at the PUC, which has an October deadline to report its progress to the Legislature.
Blending in biomass
Another question likely to be the focus of PUC hearings is the 20-year power purchase agreement Eversource has with the Burgess Biomass plant at the site of a former paper mill in Berlin.
In order to get on equal footing with the other three utilities, Eversource needs to remove from its energy costs the price of purchasing from Burgess, which is usually way above market value. So the proposal calls for blending the $140 million to $200 million in over-market costs into the settlement.
“This allows the commission to take 100 percent of those costs and dump them in with the losses that come from the sale of the power plants,” said Michael Harrington, a former commissioner on the PUC who has followed the issue closely. “In the spirit of restructuring, some of that burden should fall on Eversource stockholders and Cate Street Capital (owners of the plant).”
Now that the PUC staff and consumer advocate are behind the divestiture settlement as proposed, Harrington said he may file as an intervener, to make the argument before the PUC against blending the power purchase agreement into the divestiture deal.
“This is the second largest financial settlement on energy projects in the history of New Hampshire,” he said. “It’s been signed off by the PUC staff, the Office of Consumer Advocate and the governor’s director of energy and planning. So who’s left to challenge the things in that settlement representing the ratepayers?”