Utilities Watch

Although there were few utility bills that attracted much attention during the recently completed state legislative session, the General Court did address a number of issues relating to utilities.

The bill with perhaps the most far-reaching ramifications for telephone utilities and their customers was House Bill 194, which provides a way for small incumbent local exchange telephone companies, or ILECs, to avoid regulation by the Public Utilities Commission and raise their rates by up to 10 percent a year.

The bill gives the small ILECs the ability to petition the PUC for an alternative form of regulation comparable to that applied to competitive local exchange companies, which is quite relaxed, and says the PUC must approve it if it finds that competitive service is available to a majority of the customers served by the ILEC.

The plan also must provide for maximum basic local service rates at levels prevailing throughout the state plus allowances for inflation, and no small ILEC may increase basic local service rates by more than 10 percent per year in each of the four years after the plan is approved. The plan also must promote innovative telecommunications, meet intercarrier service obligations and preserve universal access to basic telecom services. The plan can include telecom data, video and other services.

The bill also sets up a committee to study the appropriate form of regulation for New Hampshire’s largest ILEC, Verizon.

In passing the bill over concerns from the PUC, the Legislature noted that the growth of unregulated wireless and broadband telecom services has provided customers alternatives to traditional utility services and that continuing full utility regulation of ILECs with fewer than 25,000 access lines is not consistent with promoting competition and offering new and alternative telecom services.

In other legislative action, the General Court extended the exemption telephone companies receive from property taxes on poles and conduits until July 1, 2010.

This had become a perennial battle in recent years, with a majority of the Legislature turning a deaf ear to the interests of municipalities. Legislation in recent sessions had extended the exemption for shorter periods of time, the most recent being until July 1, 2006, and set up committees to study the issue. This session they extended the exemption for a longer period of time, without setting up another study committee.

The Legislature also created a committee to study alternatives for the disposal of construction and demolition debris and enacted a moratorium on the disposal of construction and demolition waste by incineration until July 1, 2006. The moratorium does not apply to any municipal waste combustor.

On the communications services tax front, the Legislature, looking for revenue to balance the budget, came close to taxing the first $12 of a phone bill, which is currently exempt from the 7 percent CST. Ultimately, the Legislature decided otherwise.

In other CST action, the Legislature passed HB 602, which permits the exclusion of nontaxable components of bundled communications services packages from the CST if the retailer can identify the charges not subject to the tax from its books and records kept in the ordinary course of business and provide verifiable data as to the calculation of the tax upon request, passed both houses.

Also lawmakers approved a bill that requires all utility property tax appeals to be heard by the Department of Revenue Administration prior to appeal to the Board of Tax and Land Appeals or the Superior Court. They also approved a bill that requires the commissioner of revenue administration to subtract the value of certain utility property that is taxable under the utility property tax from a municipality’s tax base for what the new education funding law calls the statewide enhanced education tax.

The Legislature repealed a law that required that all electric customers be informed of the resource mix and environmental characteristics of their electric service and required the PUC to expend money to inform the public of the benefits of electricity generated from renewable energy resources.

The Legislature replaced this law with a new one that requires the PUC to adopt rules establishing standards and procedures by which electricity suppliers and utilities that choose to offer renewable energy options provide to customers information about the fuel source and emissions associated with electrical service they take and about the resource mix and emissions associated with the electricity generated and sold in New England as a whole.

The bill also extended until 2008 the system benefits charge on electricity bills to pay for programs for low-income customers and requires the PUC to suspend the collection of some or all of this portion of the SBC if it determines that the low-income program fund has accumulated more than $1 million and the excess is not likely to be reduced over the next 12 months.

The Legislature passed a bill that establishes a committee to study maximizing the incentives for the voluntary use of renewable energy in New Hampshire. The committee must report its findings and any recommendations for proposed legislation by Nov. 1.

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