PUC Staff Recommend Increase to PSNH Default Service Rate

Staff of the Public Utilities Commission of New Hampshire have recommended that Public Service Company of New Hampshire's forecast 2014 default energy service rate be increased to reflect the removal of credits relating to Regional Greenhouse Gas Initiative (RGGI) rebates.

Pursuant to RSA 125-O:23, when RGGI allowances are sold, the sales proceeds are split between the Core energy efficiency programs (proceeds up to and including $1 per allowance) and customers (proceeds in excess of $1 per allowance). Through December 31, 2013, the portion of the proceeds that is rebated to customers goes only to, "all default service electric ratepayers in the state."

Beginning January 1, 2014, the RGGI rebate will go to, "all retail electric ratepayers in the state."

"For PSNH, this means that all of its customers, whether or not they take default service from PSNH, are entitled to a share of the rebate," Staff said.

Staff noted that in calculating its forecast 2014 default service rate, PSNH attempted to capture this change by estimating the annual amount of RGGI rebates and then adjusting for migration to recognize that many of its customers do not take default service.

"While I understand PSNH's attempt to match a customer's RGGI cost and associated RGGI rebate in the same rate component -- the ES rate [default rate] -- logistically it could be quite cumbersome, especially as customers switch between supply options. In addition, if customers of competitive suppliers take service under fixed-price contracts, it would be difficult to determine if those customers receive a RGGI rebate and, if so, how much," Staff's witness testified.

"Considering that customers of New Hampshire electric distribution utilities receive energy supply service from a variety of sources, in my view it would be preferable to, beginning January 1, 2014, flow the rebates to all electric customers using a non-bypassable rate component such distribution or transmission rates or a stranded cost charge. Doing so would avoid the inherent complexities involved with, among other things, customers switching between supply options and competitive supplier pricing strategies. Consistent with my position, I note that the default service rates of Liberty Utilities and Unitil Energy Systems for effect beginning January 1, 2014 do not have RGGI rebates included in the respective calculations," Staff's witness testified.

Staff recommended that for purposes of this 2014 default service rate proceeding, PSNH should remove the estimated amount of the RGGI rebates from PSNH's ES rate calculation. Specifically, $3,050,000 of RGGI rebates which were used as a reduction to ES costs should be removed from the calculation.

"Using PSNH's forecasted 2014 ES sales of 3,830,948,000 kWh, this change would increase the ES rate by 0.08 cents per kWh, bringing PSNH's preliminary [default energy service] rate calculation inclusive of the temporary scrubber rate to 9.07 cents per kWh," Staff testified.

North American Power also submitted testimony arguing that PSNH under-forecast migration to competitive supply, which has the effect of lowering the projected default service rate necessary to adequately recover costs.

Docket DE 13-275