OUR ENVIRONMENT NEEDS MORE LOCAL REPORTING

The Concord Monitor is launching its Environmental Reporting Lab, a long-term effort to better inform the community about the New Hampshire environment. To launch phase 1 of this effort, we need your help. The money raised will go toward hiring a full-time environmental reporter.

Please consider donating to this effort.

 

'From PSNH, more of the same'

Last modified: 4/20/2011 12:00:00 AM
The hurricane of opposition to the Northern Pass transmission line has finally smashed the rose-colored glasses through which the state has long viewed its largest electric utility, Public Service of New Hampshire.

For decades, PSNH has treated our state like its colonial domain, using lobbying, litigation, contributions to targeted nonprofits and a gauzy fog of public relations to suppress dissent and to extract extra billions from New Hampshire ratepayers. You can't listen to public radio or attend a clean energy or corporate responsibility event without being reminded that PSNH is in our wallets at every moment.

Let's start with the hosing ratepayers took in the early 1990s with the Seabrook nuclear plant, which bankrupted PSNH by coming in at five times the cost initially promised by the company. PSNH emerged from bankruptcy as a subsidiary of Northeast Utilities, but conditioned on PSNH ratepayers getting socked by seven annual 5.5 percent rate increases, driving electric rates to among the highest in the nation.

In hopes of reducing rates, New Hampshire deregulated its electricity utilities in 1997. Threatening another bankruptcy, PSNH dragged the state into court, demanding that ratepayers pay the company $2 billion ($800 million more than the state Public Utilities Commission determined was fair) for its 'stranded' assets that would have otherwise become worthless under open competition. Rather than saying no to this extortionate demand and leaving PSNH as a regulated utility with declining rates built in, the Legislature and governor were persuaded to extract the full $2 billion from ratepayers in return for a paltry and temporary 10 percent rate reduction. The teaser rate reduction ended after two years, and PSNH residential rates rose again to among the highest in the nation.

The Legislature put a hold on deregulation of PSNH, leaving the company as a hybrid and retaining ownership of some of its generating plants which continue to operate under regulated rates. Under regulation, the company is allowed recovery through electric rates of its operating costs plus a 9.8 percent return on the unamortized value of its generating assets. The company has used these remaining regulated assets as a means to squeeze yet more from ratepayers.

Among these assets is the aged and dirty Merrimack Station coal plant in Bow, which poisons large parts of three New Hampshire counties with so much mercury that fish caught in downwind ponds have the highest levels found anywhere in the Northeast. In 2009 PSNH had a choice. It could have shut down Merrimack Station, thereby zeroing out its mercury emissions, and reducing electric rates by substituting the abundant, lower cost, and cleaner non-coal power available in New England. Instead, the company chose to press ahead with its Merrimack Station scrubber project to boost its revenue (and consumer costs) by $90 million per year. When the cost of the scrubber nearly doubled from the $250 million PSNH had promised to $457 million, the company mounted a massive lobbying effort to block the Legislature from even studying whether purchasing lower-cost wholesale power would be better for ratepayers.

But PSNH apparently did not think ahead to what happens when rates go way above market. PSNH has lost 32 percent of its load over the past two years as industrial and large commercial customers switched to lower-cost, competitive suppliers. The result is an ongoing death spiral, where fixed costs must be spread among fewer customers, further driving up electric rates, leaving residential customers holding the bag. So, now PSNH has filed a petition to force industrial customers to pay for its high cost power strategy even if they do not choose to buy its high-cost power.

With Northern Pass, PSNH has proposed a project where the negative impacts are instantly and universally obvious. PSNH wants to permanently disfigure the North Country's most valuable economic and natural asset - its unspoiled beauty - to deliver power not produced in the U.S. and not needed in New Hampshire. At seven recent North Country hearings on the project, more than 2,300 people testified eloquently in opposition, ranging from Tea Party leader Tom Thomson, to the Nature Conservancy, to anti-nuker Lynn Chong.

PSNH has still not caught on to the fact that New Hampshire residents no longer want our state to be its banana republic.

PSNH's corporate parent, Northeast Utilities, expects to earn almost $70 million per year from Northern Pass. When the Public Utilities Commission legal counsel filed for a rehearing, asking that the project's approved 12.56 percent rate of return be reduced because there is little financial risk for investors, spokesman Martin Murray said, 'We will consider the request, and we may or may not respond to it,' once again demonstrating his company's tone-deaf arrogance.

Another thousand public radio sponsorships will not paper over this self-inflicted public relations disaster. It is time for PSNH to change its behavior and start treating New Hampshire and its ratepayers like partners to be helped, not marks to be scammed.

(Jim Rubens is a former Republican state senator from Hanover.)


Jobs



Support Local Journalism

Subscribe to the Concord Monitor, recently named the best paper of its size in New England.


Concord Monitor Office

1 Monitor Drive
Concord,NH 03301
603-224-5301

 

© 2021 Concord Monitor
Terms & Conditions - Privacy Policy