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Senate bill could open the door to ratepayer-funded energy projects



Monitor staff
Tuesday, February 21, 2017

Electric utilities in New Hampshire could have an easier time passing the cost of new energy projects onto customers under a bill up for debate in the state Senate.

Republican Sen. Jeb Bradley filed the legislation after state regulators rejected Eversource Energy’s request to use money from electricity rates to help pay for a natural gas pipeline.

Bradley said the Public Utilities Commission should be able to at least consider whether such a deal is in the public interest. The commission currently can’t review such proposals under state laws that deregulate the power industry, he said.

“This is a tool that will help us lower electric rates,” said Bradley, who represents Wolfeboro, at a Senate hearing on the bill Tuesday. “It doesn’t approve anything; it gives the PUC an opportunity to look at something that might be in the public interest.”

Opponents disagreed, arguing that the legislation could shift the risk of bad project investments and cost overruns onto ratepayers.

“We consider this to be a backdoor to ratepayer burden,” said Maryann Harper of the advocacy group N.H. Pipeline Awareness Network.

The bill, Senate Bill 128, would give utilities the option to pursue measures aimed at reducing electricity costs or price volatility. Those could include entering into long-term power purchase agreements or buying pipeline capacity, according to testimony from the hearing.

The change would mark a shift in state energy policy. Deregulation took effect in the 1990s and bars utilities from owning power plants or generating and selling electricity. Instead, they are supposed to buy power in the competitive market and pass it on to customers.

Energy has become a hot-button issue as New England electricity rates continually rank among the highest in the country. While some say new infrastructure and pipeline capacity is needed to lower costs, a series of wind, natural gas and transmission projects have drawn intense pushback from residents who worry they will mar natural landscapes and hurt property values.

Tuesday’s three-hour hearing drew dozens of people, including several residents wearing orange anti-Northern Pass shirts, who spilled out of the hearing room and into the hallway.

Bradley said the bill doesn’t give approval or preference to any specific project. But some critics warned it could open the door to customers financing the controversial Northern Pass transmission line, a point Eversource strongly refuted afterward.

No one from the utility testified at the hearing, but spokesman Martin Murray said in a statement that Eversource takes no position on the bill.

“SB 128, if passed, would not signal approval for any specific project or utility but would provide regulators with flexibility when considering proposals, from any utility, that are aimed at reducing costs to customers,” he said

Eversource petitioned the PUC last year to buy long-term gas contracts on a proposed pipeline expansion, known as Access Northeast, using money from electric customers.

Eversource said it should be able to factor the price into customer rates because the deal would lower energy costs over the long term. The PUC rejected the idea, saying the move would conflict with deregulation and legally be the same as owning the resulting power production. Eversource has appealed to the state Supreme Court, but a decision has yet to be issued.

Business groups supporting the bill said the PUC should be able to consider all proposals that could lower rates or bring cheaper energy into the region.

“We view it as an important tool for the public utilities and the utilities to work together to basically vet out what other opportunities are out there to help impact in a positive way the high cost of electricity,” said Stefanie Lamb of the Business and Industry Association. “We don’t have the luxury to just wait.”

Energy supply groups and residents panned the bill, warning it would chip away at deregulation and push risk onto customers.

“It replaces market forces with a return to utility-owned resources with the risks of cost overruns, bad investments and guaranteed rates of return that New Hampshire has so steadfastly moved away from,” according to testimony from Dan Dolan of the New England Power Generators Association.

The state’s consumer advocate, who represents residential ratepayers, did not take a position on the bill. Don Kreis did, however, recommend that lawmakers give more explicit instruction to the PUC regarding what they can approve. He suggested utilities must be able to show any measure is the lowest-cost option and doesn’t undermine competition, among other standards. The Senate Energy and Natural and Natural Resources Committee will debate and vote on the bill at a later date.

(Allie Morris can be reached at 369-3307 or amorris@cmonitor.com.)