New Hampshire Approves New Default Service Rates

The New Hampshire PUC approved new default service rates for both large and mass market default service customers at Unitil Energy Systems, Inc. (UES) for the six-month period beginning December 1, 2013.

For the residential (small) Non-G1 customer group, the total default service rate will be $0.09771 per kWh for the period December 1, 2013 to May 31, 2014, reflecting a fixed energy component of $0.09193 per kWh, and RPS adder of $0.00578 per kWh.

For the medium Non-G1 customer group, the total default service rate will be $0.09231 per kWh for the period December 1, 2013 to May 31, 2014, reflecting a fixed energy component of $0.08653 per kWh, and RPS adder of $0.00578 per kWh.

UES reported that the bid responses reflected market uncertainty regarding the full effect of the ISO-NE Winter 2013-2014 Reliability Program which, at the time of bidding, was pending before FERC. UES stated that suppliers who elected to submit final bids on the Non-G1 (small and medium) customer groups were instructed to include in their bids their estimate of costs associated with the Winter Reliability Program. UES said that the winning suppliers assumed all risk in connection with such costs. UES said it had considered using a pass-through mechanism to recover the Winter Reliability Costs from customers but that it ultimately decided to ask the suppliers to include those costs in their default service supply bids.

With respect to the recovery of costs associated with the Winter Reliability Program, the PUC noted that having the bidders include the cost of this program in their bids, "was a major reason for fewer than normal final bids being submitted."

"Additionally, the charge for this program will be assigned to all bidders at the same cents per kWh rate negating any possible efficiencies that may be obtained through competitive bidding," the PUC said.

"At this point, it is uncertain whether the ISO will implement a Winter Reliability Program for the 2014-2015 winter period; however, if ISO does take such action, we direct the Company to work with the Staff and the OCA to determine an efficient and cost-effective method to recover winter reliability costs from customers," the PUC said.

For large customers (G1), the power supply charge component will be determined at the end of each month based upon the ISO New England real-time hourly locational marginal price (LMP) for the New Hampshire load zone plus an adder in the six-month service period. For the G1 customer group, the RPS adder for each month from January through May 2014 is calculated to be $0.00651 per kWh.

UES selected TransCanada Power Marketing, Ltd. as the winning bidder of the small customer (residential Non-G1) supply requirements (100% share), for the six-month period beginning December 1, 2013.

UES selected NextEra Energy Power Marketing, LLC as the supplier for the medium customer (small commercial Non-G1) supply requirement (100% share) and as the supplier of the large customer (G1) supply requirement, for the six-month period beginning December 1, 2013.