New Hampshire now confronts an extraordinary opportunity to build something we have lacked for many years now. I’m talking about a ratepayer-friendly — heck, a ratepayer-centric — energy and utility policy for our state.
Right now we have nothing. We need something.
Think back to the early 1990s. Public Service Company of New Hampshire (PSNH) was emerging from its Seabrook-induced bankruptcy. The court-approved reorganization plan, through which PSNH became a subsidiary of Connecticut-based Northeast Utilities (which eventually mutated into Eversource), left our state with the highest electric rates in the country.
Out of that mess was born the 1995 bill that restructured the state’s electric industry. The architects of this comprehensive and ambitious legislation were two really smart lawmakers: Jeb Bradley and Clifton Below, the then chairman and ranking Democrat, respectively, on the House Science, Technology and Energy Committee.
The bill signed into law by Governor Steve Merrill tasked the Public Utilities Commission with developing a plan to transform the state’s electric utilities into distribution companies — the owners of the network of poles and wires — which meant auctioning off their generation facilities to companies that would sell energy to customers on a non-monopoly basis.
We were the first state in the union to attempt it. The PUC put out its plan on a Friday in early 1997 and by Monday morning the utilities were in federal court obtaining an injunction.
Jeanne Shaheen — who, weeks earlier, had succeeded Merrill as governor — was having none of this. She forced the players to the bargaining table and her people, from the PUC and the Department of Justice and what was then the governor’s energy office, forged an agreement that was filed with the PUC for approval in 1999.
Ultimately it took 22 years to finish the job. The last generation unit was not pried out of the cold dead hands of the old vertically integrated electricity monopoly until 2018. My point now is not to suggest that what emerged was dreamy from a ratepayer perspective. Restructuring has actually been a mixed blessing; retail choice of electricity suppliers for residential customers has failed to save them money (although community power aggregation, which just got going four years ago, is a bright spot).
Rather, the above slog through 30-plus years of electricity history is to remind you that change happens when smart, knowledgeable, creative and ambitious officials from both parties step forward to make it so. That’s what we need now, as we confront a crisis in energy affordability.
Here’s one idea that arose in my brain out of election night insomnia. The economist on my team at the Office of the Consumer Advocate loves to argue forcefully that new interstate pipeline capacity, to serve both gas utilities and gas-fired electricity generators, is essential in the pursuit of affordability.
Okay. But that’s anathema to those who think — and I happen to be among them — that decarbonization is essential to the survival of the planet as a congenial host for human civilization.
So what if we adopted legislation to encourage or require some new pipeline capacity along with longterm supply agreements, in exchange for language that fundamentally redefines what a gas utility is? Here’s what I have in mind: Out with gas utilities, in with heat utilities.
Why would that make a difference? Because of something I heard a representative of Energy North Natural Gas — the Liberty Utilities subsidiary that serves gas customers in New Hampshire — say the other day.
The topic under discussion was Liberty’s moratorium in adding new customers in the Lakes Region. Someone asked Liberty why it couldn’t help these customers install energy-efficient, electricity-using heat pumps instead. No can do, said Liberty — we’re a gas utility.
If they were a heat utility rather than a gas utility — meaning the service they provide on a franchised monopoly basis were heat rather than a particular kind of fuel — the possibilities would expand exponentially. See, for example, the Future of Heat Initiative, co-founded by former Massachusetts utility regulator (and energy law professor) Jamie Van Norstrand to promote exactly these sorts of transformations.
For essentially my entire tenure as Consumer Advocate — I took office in February 2016 — New Hampshire hasn’t had an energy policy. Instead, each political party has just focused on seeking ratepayer-funded subsidies for their preferred technologies.
Exhibit A is the Governor’s executive order issued on March 26. It directed the state’s Department of Energy to “submit a preliminary roadmap to foster new nuclear generation in New Hampshire” within six months.
That was seven months ago. Nothing has emerged yet, perhaps because everyone knows new nuclear facilities — even cute little ones that roll off assembly lines — are years away and expensive.
Given the ongoing affordability challenges, the case is as compelling as ever that energy efficiency should be the foundational element of any plan for utility reform. For almost as far as the eye can see, the cheapest and best way of serving the next unit of demand is by figuring out how to get more work out of the energy we already use.
And yet, in 2022, the General Court adopted (and Governor Sununu signed) legislation that actually holds back energy efficiency under the guise of promoting it. Meanwhile, though our electric and gas utilities love to build their brand identities by touting energy efficiency, they steadfastly avoid investing any of their own capital in it.
We have to change that, assuming we truly care about affordability. “All cost-effective energy efficiency” was once New Hampshire’s mantra. It’s one bit of our past that should also become our future.
For my money, the coolest election outcome is the scenario in which a Governor from one party is going to have to run appointments past an Executive Council dominated by the other party. Ultimately, personnel is policy and now the two political factions must work together to ensure that the right people get put in the right jobs to move forward on the affordability of public utility service in New Hampshire. That’s good news.
Attorney Donald M. Kreis is the state’s Consumer Advocate, representing the interests of residential utility customers.