N.H. Bill Would Require Divestiture of PSNH Generation

The New Hampshire legislature is conducting a hearing today on a bill (House Bill 1238) which would require Public Service of New Hampshire (PSNH) to divest its fossil, hydro, and biomass generation assets by December 31, 2013.

PSNH's original restructuring agreement called for the public sale of PSNH's entire generation portfolio; however, Senate Bill 170, passed in 2003, required PSNH to use its remaining generation assets for the provision of default service.

House Bill 1238 would require PSNH to submit to the PUC by October 15, 2012 a plan for the divestiture of the generation assets. "The plan shall provide for an open and fair process for buyers to compete for the purchase of the assets," the bill provides, and shall require PUC approval.

In prepared testimony on behalf of the Retail Energy Supply Association to be delivered today, Daniel Allegretti, Vice President for energy policy with Constellation Energy, notes that the energy market and power plant economics have changed since the legislature ordered PSNH to use the generation to provide default service.

New environmental regulations for PSNH's coal-fired plants, and the abundance of shale gas, have caused the market price of electricity to fall below the cost of power from the PSNH portfolio.

"[W]hatever cost advantage may have been achieved through retaining the PSNH fleet back in 2003 is now gone," Allegretti said in support of House Bill 1238.