N.H. Industries signs pioneering wholesale electric deal

New Hampshire Industries Inc. has become the first consumer to purchase wholesale electricity directly from the New England Power Pool market.

Granite State Electric Co. began delivering electricity to NHI’s Lebanon manufacturing facility on April 20.

Freedom Energy, a marketer of full requirements electricity service to large commercial and industrial retail electric customers throughout New England, described NHI’s decision to purchase through the regional wholesale electric market as a result of a three-year effort by Freedom Energy attorney Jim Rodier to change the New England Power Pool (NEPOOL) agreement. ISO-New England administers the NEPOOL market.

Under the deal, Freedom will manage NHI’s purchases from the NEPOOL market.

Rodier said the potential benefits to NHI are many.

“Price transparency and lowest average cost for electricity is a given,” he said.

NHI will be able to purchase “green power” from any renewable energy facility in the region and have access to a much bigger, stronger energy market, he said.

Todd Miller, president of NHI, said that the company competes on a worldwide basis, and that means it needs to get the best possible price on everything it purchases, including electricity.

According to Michael S. Giaimo, vice president of the Business and Industry Association of New Hampshire, NHI is “thinking outside the box” in taking a new and non-traditional approach to purchasing electricity.

“If more companies purchase alternative power, then the New Hampshire market will improve substantially, and so should the price of electricity,” Giaimo said.

Rodier emphasized that direct purchasing of electricity may not be for everyone.

Customers who want to purchase electricity in this manner are subject to stringent credit requirements, and such a purchase requires a company to assume more risk for the price of electricity than most companies have traditionally taken, as well as a willingness to accept the volatility of the market for electricity.

Although the price of electricity is likely to be lower over time if purchased directly rather than through a supplier — because the customer avoids the markup on electricity that a supplier imposes — prices are volatile, particularly during the summer months. That means customers need to be wary of price fluctuations. A customer that buys directly from NEPOOL can hedge prices through NEPOOL and can stop purchasing in this way with 48 hours notice and then take default power from the distribution company.

In addition, electricity price volatility is limited to some degree by price caps established by the Federal Energy Regulatory Commission and load response programs that have become more effective at shedding load when the amount of power available to meet demand gets close.

Under load response programs, customers that have the ability to generate their own power or to shut down or reduce their power are paid to reduce their demand for electricity during peak periods.

Bedford resident Brian Lamy recently won a right-to-know suit in Merrimack Superior Court against the state Public Utilities Commission.

Lamy had filed the suit after the PUC denied his request to disclose names and addresses of Public Service of New Hampshire customers who had submitted voltage complaints to PSNH between July 1, 1999, and Aug. 1, 2003. Lamy also had sought the release of PUC documents related to a request for proposals issued in connection with the PUC’s investigation of PSNH service in Bedford. The PUC turned that information over to Lamy once the RFP process was complete and a contract was awarded.

The PUC had denied Lamy’s request for disclosure of names and addresses of complainants in January of this year, only giving him access to redacted forms that did not reveal customer-specific information.

The PUC cited its rules, which prevent electric companies from releasing confidential customer information without the customer’s consent.

Lamy then filed a petition for injunctive relief with the Superior Court. Granite State Electric, Unitil Energy Systems Inc., Northern Utilities Inc. and Public Service Company of New Hampshire all intervened in the proceeding, also objecting to the release of the information.

In granting Lamy’s request, Superior Court Judge John Lewis noted that the state Supreme Court has held that the party seeking nondisclosure under the right-toknow law has the burden of proof and that the purpose of the right-to-know law is to ensure the greatest public access to the records of public bodies.

He also said that the law furthers the state constitutional requirement that the public’s access to governmental proceedings and records is not to be unreasonably restricted.

Lewis also ruled that the privacy interests had not been shown to be “strongly compelling” and that the disclosure pertained only to a limited group of people who have come forward to make complaints about PSNH.

He said that “the provision of electrical service strongly and generally implicates the public interest” and concluded that the PUC failed to meet “its heavy burden of shifting the balance toward nondisclosure.”

At press time it was unclear whether the order would be appealed.

Doug Patch, former chairman of the New Hampshire Public Utilities Commission, is with the Concord law firm of Orr and Reno.