Just another routine day for NH ratepayers

True, the state’s Site Evaluation Committee dropped a bombshell on Feb. 1 by taking a surprise unanimous vote to reject Eversource’s Northern Pass transmission project and then suspending its public deliberations before even reaching all of the issues the SEC is required by statute to consider.

True, Eversource set a new standard for intemperance in corporate public relations by declaring it was “shocked and outraged” by the decision. True, those who think the unburied portions of the 192-mile transmission line would be an ugly slash through the middle of our verdant state had reason to celebrate.

But for New Hampshire ratepayers, as ratepayers, it was just another Thursday.

The purpose of Northern Pass is to deliver 1090 megawatts of hydroelectric power generated in faraway parts of Quebec to consumers in Massachusetts. Just days before the SEC vote, Eversource was declared the winner of a bidding competition to provide Bay State customers with energy designed to meet aggressive renewable energy procurement targets mandated by the state.

Skeptics, cynics and business rivals of Eversource condemned the news. They pointed out that Eversource played a prominent role in the committee that picked Northern Pass. The game is rigged, they concluded.

Rigged or not, it was a Massachusetts game. As approved by the Federal Energy Regulatory Commission, Northern Pass is a “participant funded” project. Its costs would not go into the regional transmission rates paid by all ratepayers in New England. Rather, Hydro-Quebec would pay those costs and, presumably, recover them by selling electricity to utilities in Massachusetts.

This is not to claim a total absence of ratepayer effects in New Hampshire.

The staff of the Public Utilities Commission got Northern Pass to agree to contribute $2 million a year to energy-efficiency programs for a decade in exchange for gaining the required legal authority to operate as a public utility in New Hampshire.

Separately, my office worked with the PUC staff to get Northern Pass to commit another $15 million, spread out over 40 years, as part of a deal to approve the lease by Northern Pass of space on an existing transmission right-of-way that had been paid for by New Hampshire ratepayers.

There was also a fish that got away. Responding to criticism from candidates in the 2016 election that no energy from Northern Pass would benefit the Granite State, Public Service Company of New Hampshire (still the legal name of Eversource’s New Hampshire subsidiary) entered into a power purchase agreement for 100 megawatts worth of Hydro-Quebec power to be imported via the Northern Pass line.

Two fatal flaws consigned that particular agreement to oblivion.

Eversource insisted that the terms of the deal remain confidential. And the deal itself was illegal. Or, more precisely, the PUC correctly ruled that in the wake of the 1996 electric industry restructuring statute, electric utilities can no longer enter into power purchase deals and force all customers to take on the risk of such agreements proving over time to be bad deals.

Finally, there is the $62 million that Eversource claimed New Hampshire customers would save each year because Northern Pass power would reduce wholesale electricity prices throughout New England. But the region’s electricity markets are Rube Goldberg machines. So how Northern Pass would affect regional prices is no simple thing to determine. This was apparently a hotly contested issue in the SEC hearings.

The bottom line: A couple of relatively small funding streams to be paid out over many years, a power purchase agreement that turned out to be illegal and a highly disputed claim about wholesale price suppression amounted to a relatively insignificant amount in comparison to the total amount Granite Staters pay each year for electricity. The cost to ratepayers of not getting Northern Pass is small.

Regardless of the fate of Northern Pass, if the surprise plot twist changes the energy conversation in New Hampshire, then Feb. 1 will have been a significant day for New Hampshire’s electricity customers.

D. Maurice Kreis serves as New Hampshire’s consumer advocate before the Public Utilities Commission. His column is co-published by InDepthNH.org and Manchester Ink Link.

Categories: Opinion