PSNH Forecasts Migration Up To 58% in 2015

Public Service Company of New Hampshire forecasts that monthly migration to competitive electric supply will reach 58% in 2015.

The forecast was included in PSNH's data supporting its increased default service rate of 10.56¢/kWh effective January 1, as first reported on December 30.

In the default service filing, PSNH provided the following monthly forecast of migration rates for 2015.

Jan-15     43.9%
Feb-15     44.9%
Mar-15     48.2%
Apr-15     52.3%
May-15     54.4%
Jun-15     53.5%
Jul-15     51.3%
Aug-15     53.5%
Sep-15     55.9%
Oct-15     57.6%
Nov-15     54.4%
Dec-15     50.4%

Migration was 50% in November 2014 and 45% in December 2014.

PSNH also said that the reason for the increase in the default service rate (particularly as PSNH was initially forecast a modest decline in the rate) was higher-than-forecast migration during the early fall of 2014, which led to an under-recovery of costs, plus "reverse migration" in December 2014 which led to lower revenues from sales of excess power.

In approving the new default service rate, the PUC directed PSNH to further refine the price forecasts used in its future migration rate forecasts, and review whether the final rate (which is filed in mid-December) should use an updated forecast (a forecast from November 20 was used):

"[W]e believe it is reasonable for the Company to use a price forecast in developing its energy service rate calculation, and we direct PSNH to continue to use the forecast in subsequent filings. We understand that, if PSNH had used a more recent electricity price forecast than that of November 20, 2014, the resulting default service rate would be somewhat lower. There is some question, however, whether those lower market power costs will actually occur, or whether the power costs will end up being closer to PSNH’s forecast. We understand that this uncertainty is the nature of forecasting. Nonetheless, we find that it is appropriate for PSNH to meet with Staff and the OCA to determine if the Company can use a more current forecast when it develops its final energy service rates in future proceedings," the PUC said.