PUC rejects Eversource-Hydro-Quebec power deal

Ruling shoots down plan to guarantee 100 megawatts of energy for NH

Eversource will not be able to enter into a long-term contract to buy Hydro-Quebec-supplied power for its New Hampshire customers over Northern Pass transmission lines.

In a major setback to the state’s largest utility, the Public Utilities Commission on Monday rejected the utility‘s proposed 20-year power purchase agreement, which would have ensured that Eversource’s New Hampshire operations receive 100 megawatts, or about 10 percent, of the electric capacity that would be transmitted across the 1,090-megawatt power lines.

The terms of the contract are redacted, over the objection of the Office of the Consumer Advocate, but Eversource said it is related to the forward market price for energy, and that, if Hydro-Quebec sells the electricity to anyone for a cheaper price, Eversource would get that deal too.

Eversource argued the contract would result in $100 million in savings, even without environmental benefits that could be monetized into more savings.

But the PUC staff opposed the deal, arguing that what could save money could cost money, putting ratepayers at risk

In its ruling, the PUC said the deal violated the state’s restructuring law as well as the recent agreement to sell the utility’s generating assets. The commissioners ruled that the contract would be “essentially the same as Eversource owning an electric generating facility.” And that constitutes “an impermissible intermingling of a generation activity with distribution rates.”

It also agreed with critics who claimed the contract was “self-dealing,” since it is an Eversource subsidiary, Northern Pass, that is building the transmission lines that Hydro-Quebec would send that very power over, under the terms of another contract, called a transmission service agreement, which is also being examined by different regulators.

‘Economic benefits’

The PUC had previously rejected another attempt by Eversource for a long-term contract with Access Northeast, a natural gas expansion project in which it has a financial interest. Eversource has taken that decision to the NH Supreme Court. But the company had a right to PUC rehearing first, noted Martin Murray, an Eversource spokesperson.

Murray emphasized that the power purchase agreement was “not a requirement of the Northern Pass permit process.” Instead, he said, it was a “response to many, including business leaders and policymakers, who asked for a guarantee that New Hampshire, as host state of the Northern Pass project, will receive its fair share of energy from the project and economic benefits above and beyond those received by other New England states”

He pointed to blogs that argued that New Hampshire would still share in other benefits from the project that could amount to $1 billion in savings.

Opponents had a different spin on the decision.

“For the second time in six months, the PUC has shot down an Eversource scheme that would put New Hampshire businesses and families at risk,” said Tom Irwin, New Hampshire director of the Conservation Law Foundation. “From financing gas pipelines to tipping the scales for Northern Pass, Eversource keeps trying – and failing – to gamble its customers’ hard-earned money on unnecessary and unwanted infrastructure.”

A measure being considered in the NH senate, Senate Bill 128, would make the restructuring law more flexible and might allow the power purchase agreement. The Senate is scheduled to vote on that bill on Thursday.

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