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Settlement Would Drop Proposed Laddering Of Small Customer Default Service Under New Default Service Mechanism

November 29, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Several parties, including Public Service Company of New Hampshire (Eversource) and New Hampshire PUC Staff, have entered into a settlement agreement concerning the structure of PSNH default service to be implemented once the divestiture of PSNH's generation is complete

No retail supplier or retail trade group signed the settlement as filed with the PUC, though Exelon Generation Company, LLC is a signatory

The settlement would rely on sealed-bid RFP competitive procurements to procure default service energy supply for PSNH, with two customer class groupings

Under the settlement, Eversource agrees that competitive procurements would be for 100 percent of the load to be delivered in the period and to forego the use of laddering

The Settling Parties agree that Eversource's procurements would be as follows:

For the small customer class (consisting of customers in Residential Rates R and R-OTOD; General Service Rates G and G-OTOD; private area lights associated with these residential and small general service accounts and billed under Outdoor Lighting Rate OL; and municipal lighting on Outdoor Lighting Rates OL and EOL) Eversource shall use a single procurement every 6 months for full requirements, load following service for a 6 month term. The default service rate for the small class will be set at a flat cents per kWh level for each 6 month term. Tranches offered to bidders will be designed as percentages of load aimed at being approximately 100 MW in size.

For the large customer class (consisting of customers in Primary General Service Rate GV, Large General Service Rate LG, Backup Service Rate B, and any private area lighting associated with these accounts and billed under Outdoor Lighting Rate OL) Eversource shall use a single procurement every 6 months for full requirements, load following service for a 6 month term. The default service rate for the large class will vary monthly in line with the monthly pricing identified by the winning bidder.

Per the settlement, Eversource will implement the new competitively procured default energy service rate within approximately ninety (90) calendar days following the closing of the sale of Eversource's thermal generating assets (Effective Date)

During the months between the sale of Eversource's thermal generating assets and the Effective Date, Eversource would self-manage its default service obligations with remaining owned generation, PPAs, IPPs, and market-based supply purchases as necessary. Any non-scrubber over or under recoveries resulting prior to and during the period of self-management through the Effective Date will be reconciled and recovered as a Part 2 stranded cost via the Stranded Cost Recovery Charge ("SCRC"), the settlement provides

In the event that Eversource's hydroelectric generating assets have not been sold as of the Effective Date, the Settling Parties agree that the competitively procured default energy service rate shall incorporate a "hydro adjuster," a cents per kWh rate for the upcoming rate term, consisting of the estimated costs and revenues relating to the hydroelectric assets amortized over forecasted default energy service (ES) sales.

Under the settlement, the SCRC mechanism will change such that, on the Effective Date, all remaining non-hydro costs and revenues will be shifted to the SCRC, and out of the default energy service rate, for costs and revenues relating to the carrying charge on the stranded thermal assets prior to securitization, and for any IPPs or PPAs held by Eversource. Such costs and revenues shall remain in the SCRC until the completion of the sale of any remaining generating assets, at which time the SCRC shall be adjusted to account for the completion of the sale and implementation of the requirements of a 2015 Settlement Agreement relative to the SCRC rate, the settlement provides

The Settling Parties agree that if the Effective Date is on or before May 1, 2018 Eversource's initial competitive procurement will be for delivery in the period of the Effective Date through July 31, 2018. If the Effective Date is on June 1, 2018 or later Eversource's initial competitive procurement will be for delivery in the period of the Effective Date through January 31, 2019. Subsequent procurements shall be for 100 percent of the load to be delivered each 6-month period thereafter with ES rates being effective from February 1 to July 31, and August 1 to January 31 of each year.

The settlement remains subject to PUC approval

Settling parties are Public Service Company of New Hampshire d/b/a Eversource Energy ("Eversource"), the Staff of the New Hampshire Public Utilities Commission ("Staff'), the Office of the Consumer Advocate ("OCA"), Exelon Generation Company, LLC, and EnerNOC, Inc.

DE 17-113

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