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PUC Orders Sale of Utility Power Plants, Use of Competitive Procurement for Default Service

July 5, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The New Hampshire PUC has approved, without modification, a settlement among various parties requiring Public Service Company of New Hampshire (Eversource) to divest its power plants and adopt a competitive procurement for default service

The settlement calls for an "expeditious" divestiture of the power plants, via an auction process whose design was left to a future proceeding.

With respect to default service, the adopted settlement provides, "Default Service will provide a safety net and assure universal access for customers who do not receive energy from a Competitive Supplier. Default Service shall be acquired and provided in accordance with RSA Chapter 369-B until divestiture of PSNH's generating assets. No later than six months after the final financial closing resulting from the divestiture of PSNH's generating assets, PSNH will transition to a competitive procurement process for default service. The competitive process utilized shall be consistent with the process determined by the Commission in its Docket No. IR 14-338, 'Review of Default Service Procurement Processes for Electric Distribution Utilities,' as may subsequently be modified by the Commission."

The adopted settlement also allows PSNH to recover the full Merrimack scrubber costs in its default service rate until closing on the Rate Reduction Bonds contemplated under the settlement.

Upon closing on the Rate Reduction Bonds, all costs of the scrubber will be removed from default service rates.

PSNH will divest its utility generating assets via auction, including:

Fossil Fuel

• Merrimack Station, Bow. Coal. 439 MW.

• Newington Station, Newington. Oil and/or natural gas. 400 MW.

• Schiller Station, Portsmouth. Coal or oil, two units; biomass, one unit. 150 total MW.

Hydroelectric Plants – 69 MW total

• Amoskeag Hydro, Manchester

• Ayers Island, Bristol

• Canaan Hydro, West Stewartstown

• Eastman Falls, Franklin

• Garvins Falls, Bow

• Gorham Hydro, Gorham

• Hooksett Hydro, Hooksett

• Jackman Hydro, Hillsborough

• Smith Hydro, Berlin

PSNH's minority ownership interest in Wyman Unit 4, located in Yarmouth, Maine, will be offered for sale and may be sold outside of the auction process or dealt with as deemed appropriate by the Commission.

PSNH shall retain its existing PPAs and sell the energy and capacity from those agreements into the market, with the difference between the contract costs and the market revenues associated with the PPAs' energy and capacity to be recovered through the Stranded Cost Recovery Charge. RECs from such PPAs will be managed prudently to benefit customers.

The adopted settlement provides for a nonbypassable charge to recover stranded costs associated with divestiture. The settlement agreement shall not alter any currently existing opportunities for retail customers to generate or acquire electricity for their own use, other than through retail electric service, without an exit fee.

Docket DE 14-238

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