Fromuth and Herndon: NH Legislature’s energy choice: monopolies or markets?
Lawmakers need to defend community power law from being gutted
When Governor Sununu signed the Community Power Law in 2019, a lot of energy professionals (not to mention cities and towns) got very excited. The legislation opens up a world of opportunity for markets, businesses, innovation and competition in New Hampshire’s energy sector.
But before initial programs have even had a chance to launch, Eversource is pushing for legislation that would put the brakes on community power. If passed, House Bill 315 would undermine the potential for community power to transform our state energy system by giving our cities and towns the local control to save on energy costs, increase resilience, and generate more renewable energy.
Before “community power” there were basically two options for energy consumers: take electricity from your utility “default service” (which is fine, but not all that innovative); or every individual customer can go out and negotiate “competitive electricity supply” with a broker or energy supplier. The second option is great for big energy users, but not so great for small energy users and residents.
With community power, cities or towns can pool together the buying power of their collective electricity users, break off into town-by-town pockets of electrical load and start to tailor energy services to meet their distinct needs. Programs can attract innovative businesses and energy suppliers that give communities more choices. Towns can gain access to more competitive rates, choose to supply the community with more locally generated power, say from hydro or solar, or focus on related services like demand-side management and conservation.
Community power opens up opportunities to use new technologies like energy storage to manage electricity usage, lower costs and provide resilience during outages.
In a way, community power is a means to leap frog the dead-in-the-water-after-6-years-of-regulatory-knuckle-dragging that is the Public Utilities Commission Electric Grid Modernization docket. Regulated grid modernization was supposed to lower costs, enable new energy technologies and customer choice and bring the energy grid into the 21st century. But, as is often the case at the regulatory commission, that tree has yet to bear fruit. Community power chooses markets over regulation, local control over utility status quo and lets each city or town chart their own energy destiny.
The Eversource-backed House Bill 315 is an attempt to curtail market competition and protect monopoly control. It proposes to subject municipalities to state regulation. It would eliminate access to competitive markets for energy services and instead require communities to use monopolistic and regulated programs. It inserts insidious “poison pills” that would altogether make community power unworkable.
One bright spot in HB 315 is the inclusion of a purchase of receivables program. Under purchase of receivables, the utility guarantees, for a fee, the receivables of any ratepayer that is served through their community power program. Why is this important? Community Power is a universal access program, meaning that anyone who wants to participate in their community’s program may do so, regardless of their income-level, credit or payment history. This creates significant payment risk for potential suppliers, who in turn increase pricing to account for higher risk premiums or decline to bid altogether. The institution of a Purchase of Receivables program will lead to more supplier competition and lower risk premiums, resulting in lower pricing and more options for communities and their ratepayers.
Over the past year, many cities and towns have been working towards launching community power programs. They are none too pleased with HB 315, and are making their voices heard. Local elected officials and municipal leaders in Claremont, Keene, Portsmouth, Nashua, Lebanon, Hanover and other communities have joined several hundreds of voters in signing to a letter opposing HB 315.
The General Court has a decision to make: Will they choose to protect the utility monopoly? Or will they choose community power, markets and customer choice for the people of New Hampshire?
Bart Fromuth is chief operating officer of Freedom Energy Logistics and Henry Herndon is member services director of the Community Power Coalition of New Hampshire.