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PUC Says It Lacks Express Authority To Order EDC To Execute PPAs Linked To Default Service Procurement, Interprets Statutory Obligation

January 14, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The New Hampshire PUC issued an order providing interpretations of certain statutory requirements related to RSA Chapter 362-H, which requires an electric distribution company to solicit, under terms set forth in the statute, the net energy output of any eligible biomass or municipal waste facility located in its service territory.

While potential procurements under the statute are linked to the default service procurements, the biomass procurements would not directly impact default service rates (though they could impact wholesale default bidder participation and bidding). Rather, default service rates are set via a competitive procurement, and any excess cost from the biomass PPAs are addressed via nonbypassable surcharge. The statute governs the rate to be paid to the biomass plants.

As previously reported, citing FERC jurisdictional concerns, PSNH (Eversource) has said that it does not intend to enter into bilateral purchase agreements with the biomass plants due to the federal preemption issue. However, it would make purchases from the biomass facilities if ordered to do so by the PUC (under a "rate order").

While the statute itself imposes certain obligations on the EDC under terms in the statute, the PUC notably said in its order that, "We find no express authority in RSA 362-H for the Commission to order Eversource to sign agreements with eligible facilities, or to order Eversource to purchase power from the eligible facilities in the absence of any agreement."

"We also reject Eversource’s proposal that we issue 'rate orders' requiring it to purchase power from the eligible facilities. There is nothing in RSA 362-H referring to PURPA or avoided costs, and nothing tasking the Commission with ordering alternative methods of implementing the statute. The statute imposes obligations on Eversource, the eligible facilities, and on the Commission, but the extent of the Commission’s role is to 'review' agreements 'for conformity with this chapter,'" the PUC said

The PUC's order also addressed various statutory terms, such as whether capacity is to be included in the purchase (the PUC ruled capacity is not to be included), and what the rate to be paid to the biomass plants is to be based on (the PUC ruled that the rate on which compensation is to be based is the default service energy rate, not avoided costs or another rate)

DE 18-002

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