Resident Power, PNE Energy win a round against PUC staff

PNE Energy Supply, which in February defaulted on its promise to buy electricity for thousands of New Hampshire customers, told the New Hampshire Public Utilities Commission Thursday that it has rectified the situation and was ready to defend itself against charges that it misled customers and regulators


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PNE Energy Supply, which in February defaulted on its promise to buy electricity for thousands of New Hampshire customers, told the New Hampshire Public Utilities Commission Thursday that it has rectified the situation and was ready to defend itself against charges that it misled customers and regulators.

The hearing at which PNE will present that defense was postponed until next week at the request of the PUC staff following a commission order Wednesday that ruled that the staff must prove its case, as opposed to PNE or its sister company, Resident Power. Resident Power, a Manchester aggregator that provided electricity to residential and small business customers, was the first such company to compete in the residential market against Public Service of New Hampshire when it took on the utility in 2011.

Resident Power and PNE had already presented some of that case on Wednesday, arguing that the companies were only guilty of some technical violations. It also blasted PSNH for stating its case in a preliminary PUC filing seeking to stop transfer of Resident Power customers to another competitive supplier, FairPoint Energy. The filing, Resident Power said, was “an opportunistic effort to profit from PNE’s financial default.”

The regulatory brawl is the aftermath of an unexpected spike in the price of electricity generated by natural gas sold on the spot market.   A cold spell and the havoc caused by a giant February snowstorm led to a sixfold increase in the price of energy on the spot market between Jan. 30 and Feb. 10

As a result, “PNE was unable to continue to meet its financial obligations with ISO-NE,” according to the Resident Power/PNE filing, leading ISO-NE – the entity that coordinates and runs the power grid – to suspend PNE from supplying electricity to Resident Power customers.

PNE promised it would – and told NHBR that it did – finally meet those obligations to ISO on Thursday.

Following the PNE suspension, the PUC staff faulted the company for not disclosing to its customers information about its financial default, not giving advance notice to customers that they could transfer FairPoint or PSNH, and the relationship between Resident Power and PNE.

“Representatives of PNE and Resident Power alternatively seem to speak for one entity, the other or both, but at other times appear to fall back to relying on the companies status as separate entities to declaim knowledge of each other’s actions.”

The PUC staff also alleged that PNE enrolled commercial customers without PUC approval and that claimed the “the possibility” of “misleading, or incomplete statements.”

The staff ordered that the companies provide all sorts of information about their financial condition and corporate structure. The companies did so, but asked that PUC redact most of that information from the public, including who owns the companies.

One filing revealed that many of Resident Power’s customers were actually small businesses, which the PUC staff claims they had no right to sign up. Resident disputes this, arguing the regulations serving both are similar.

Resident Power and PNE also dispute the contention that they have not been forthright about their relationship, maintaining that they told the PUC from the very start that both companies were spinoffs from Freedom Logistics, which mainly marketed to larger commercial customers.

The PUC staff asked for the hearing delay because Resident/PNE had earlier asked two staff attorneys to testify, and they needed more time to prepare.

The PUC agreed to delay the hearing until Tuesday, March 26.

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