Bill would delay PSNH divestiture

The New Hampshire Senate Energy Committee voted 4-0 Tuesday to back a House bill that delays until at least June 30, 2008, the long-deferred sale of Public Service of New Hampshire’s power-generating facilities.

Current law would force divestiture of the power plants start as soon as April 30 of this year.

House Bill 175, retained from last session, also sets up a study committee to devise a board energy policy in an era of volatile prices and changing technologies and fuels. This group of lawmakers, consulting with paid experts, might write future legislation to finish deregulating the electric industry or retain the current system, which is part regulated and part free market.

HB 175 would fund the $100,000 work of the committee from fees that utilities pay the Public Utilities Commission, which sets the rates for PSNH based on its documented costs plus an allowed profit.

Merchant plants like the 720-megawatt Granite Ridge facility in Londonderry sell their power wholesale into the ISO-New England power grid with little PUC oversight. These suppliers are free to make an unlimited profit or lose money without passing that cost along to their ratepayers. The international AES power company wrote off its $200 million investment in the Londonderry plant more than two years ago and agreed to an amicable foreclosure.

Rep. Roy Maxfield, R-Loudon, sponsor of HB 175, said the risks of the energy market make it advisable to keep some regulatory control over PSNH rates. He said the last of that utility’s contracts to buy power from small wood-fired plants expire this year, and the bill lets that happen.

“The bill won’t save those wood plants, nor would we want to,” Maxfield said. “It’s been our goal for the last five years to put them out of business unless they can compete on their own. We expect rates could come down for PSNH customers by as much as one and a half cents per kilowatt hour.”

Donna Gamache, a PSNH spokesperson, said the utility supports the bill, which would not automatically force her company to sell off its assets in two years. The utility would be able to do so if it wishes, only by showing the decision is in the interest of its ratepayers. If so, it would go head-to-head with other suppliers on equal terms.

Gamache told NHBR Daily that the five or six remaining wood-fired suppliers to PSNH produce between 50 and 75 megawatts of power in all.

“They get 20 cents a kilowatt hour,” she said, “but the free market sometimes goes as low as 8 or 10 cents. It changes with the prices of oil and gas.”

Sandi Hennequin, corporate lobbyist for Constellation Energy, also backed the bill and urged lawmakers to choose a single energy system and stay with it. That way all players would have a level regulatory playing field. She said her firm supplies approximately 65,000 New Hampshire customers in competition with PSNH.

“New Hampshire has one foot in the restructuring camp and one foot in the old world of rate-based generation,” Hennequin said. – CHRIS DORNIN/GOLDEN DOME NEWS SERVICE

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