PSNH Asks to Maintain Current Default Service Rate Beyond January 1

Public Service Company of New Hampshire has asked the PUC to maintain the currently applicable default service rate beyond January 1, 2012, until such time as the PUC approves temporary rates to address certain PSNH scrubber costs.

PSNH sought the action to maintain rate stability, as otherwise default service rates would decrease materially on January 1, but would later increase by the about same amount if the temporary scrubber costs are approved.

Specifically, PSNH recommended that the current default service rate of 8.89 cents per kWh be continued in the short term until the PUC determines whether to adopt temporary rates to recover costs of the Merrimack Scrubber Project. PSNH has sought the temporary rates reflecting scrubber costs until the PUC completes its prudence review of the costs.

If the current default service rate were not continued, and the temporary scrubber rates were not approved prior to January 1, 2012, the default service rate would fall to 7.90 cents per kWh. Thereafter, if the PUC later approved the temporary scrubber rate, the default service rate would jump back up to 9.08 cents per kWh.

"The Company believes that it is in the public interest to postpone consideration of the Company's Energy Service rate and Stranded Cost Recovery Charge until a date close in time to the Commission's consideration of the Company's request for temporary rates in DE 11- 250 in order to promote rate stability and rate continuity. Without postponements, the Energy Service rate will go down and back up again in a very short period of time. It would not be in the public interest for rates to decrease then increase in this manner in a relatively short time frame, especially when such variation can be easily avoided. By granting this request, the Commission would allow concurrent determinations of the Energy Service rate, Stranded Cost Recovery Charge, and temporary rates in DE 11-250 such that all the rate changes could be implemented at one time, thereby achieving rate continuity and stability," PSNH said.

PSNH noted that there is no statutory or other requirement governing the date on which the company's default service rate or stranded cost recovery charge must be put into effect. All that is required by RSA 369-B:3 is for the default service rate to be, "PSNH's actual, prudent, and reasonable costs of providing such power, as approved by the commission, together with, for those customers choosing a renewable energy transition service option under RSA 374-F:3, V(f), the price of the renewable energy component."

In updating its default service rate projections, PSNH reported that migration to competitive supply increased from 33.4% in August to 34.0% in November.