Electric customers in New Hampshire might be in line for some sizeable refunds following a federal ruling that says roughly $1.5 billion must be returned to customers throughout New England because companies made too much money when they built transmission lines.
The Federal Energy Regulatory Commission on March 19 cut what is known as the base return on equity for New England transmission owners, and ordered approximately $1.5 billion in refunds to customers to cover what it says were excess charges between 2015 and now. The refund includes about $880 million in refunds to Eversource customers in New Hampshire, Massachusetts and Connecticut and lesser amounts to customers of other utilities, including Unitil, Liberty and New Hampshire Electric Cooperative.
Several companies, including Eversource have asked ask FERC to put the refunds on hold while they appeal the decision in court, arguing that customers could face “rate whiplash” if they get a refund now but have to return it later, should courts alter FERC’s ruling.
Refunds would go to all customers, both residential and commercial. Details of how and when they would be distributed, if they happen, will be made by the state Public Utilities Commission.
The issue involves the amount of profit that companies are guaranteed to get when they build new power lines, substations and other transmission equipment. Regulated utilities get this guarantee to balance the fact that they are controlled by state and federal regulators as permitted monopolies.
Any refunds would go to customers of companies that build the power lines as well as to other utilities, which have to buy transmission services on those lines.
This return-on-equity figure has long been a source of dispute. In a column in the Monitor, the state’s consumer advocate Don Kreis says the state first tried to get regulators to lower the percentage in 2011, when PSNH was still a separate utility and the base rate of return was 11.14%. The figure was later reduced by FERC to 10.57%, and in March that body reduced it again to 9.57%, ordering a rebate of the difference to customers for the extra charges since 2015.
Some utility assets are regulated by states rather than the federal government. New Hampshire Public Utilities Commission has given Eversource a return on equity of 9.5% for those assets. The state consumer advocate’s office is pushing to get that figure reduced to 8.1%.
