New Hampshire Orders Changes to Implementation of Switching Fee at PSNH

The New Hampshire PUC has ruled that Public Service Company of New Hampshire shall cease applying a $5 switching fee to both a customer's new retail supplier, and to the retail supplier losing that customer.

The $5 switching fee shall now only be applied to the supplier initiating a customer switch.

The PUC declined, at this time, to eliminate the $5 switching fee entirely, stating that, "The record does not support a finding regarding whether the charges are just and reasonable, and absent such a finding, we will not suspend the tariff or the charges as requested by the competitive electric suppliers."

Specifically, PSNH's approved tariff provides, "For customers who are currently taking Supplier Service ... the Selection Charge will be assessed to the new Supplier at the time the Company receives an enrollment transaction from the new Supplier. For Customers who are currently taking Supplier Service, the Selection Charge will be assessed to the existing Supplier at the time the Company receives the drop transaction from the existing Supplier."

In cases where a customer was moving between suppliers, PSNH had been applying the $5 fee to both the existing supplier and new supplier.

The PUC agreed that the tariff language was unclear, and ruled that, "when a customer moves from one competitive supplier to another, the transaction involves one switch and not two."

"If moving from one competitive supplier to another constituted two switch transactions then moving from a competitive supplier to PSNH, or the other way around, would also constitute two switch transactions. PSNH presented no evidence to show that it charges itself as well as the competitive supplier in cases involving a switch between PSNH and a competitive supplier. We must therefore conclude that only one switch charge is appropriate when a customer moves from one supplier to another, whether the switch is between two competitive suppliers or a competitive supplier and PSNH."

"Therefore, we direct PSNH to discontinue billing more than one Supplier Charge when a distribution customer switches from one competitive supplier to a different competitive supplier," the PUC said.

The PUC's directive will continue until such time as the Commission orders otherwise following an inquiry into the reasonableness of the switching fee.

"We are, nonetheless, troubled that PSNH has not yet developed the incremental cost of the Competitive Supplier Charges. According to testimony, PSNH originally calculated the costs of the Billing and Payment Services and Collection Services charges on an embedded cost basis. The Selection Charge was established at the advent of competition without the benefit of prior experience in switching customers among competitive suppliers, or a cost-of-service study for performing such a service. We agree with the intervenors that it would be more appropriate to calculate the Competitive Supplier Charges based on the incremental costs for providing those services and we find that sufficient experience has been gained to now determine a cost basis for the Selection Charge," the PUC said.

"Therefore, we direct PSNH to conduct a cost-of-service study on the incremental cost basis for the Selection service, the Billing and Payment service and the Collection service that PSNH provides to CEPSs. PSNH will be allowed to continue to bill the Selection Charge, as modified by this Order, and the Billing and Payment and Collection Charges until the Commission determines the appropriate costs for these services," the PUC said.

"Given the years in which these charges have been in place and the directive to develop incremental cost-based analysis, we issue a supplemental order of notice establishing a prehearing conference and temporary rate hearing on the Competitive Supplier Charges discussed in this order. We will use the incremental cost study we have directed PSNH to conduct as a basis for evaluating the costs of these Competitive Supplier Charges and, if necessary, for adjusting those charges," the PUC said.

Docket DE 12-295