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OCA Activity - ElectricCase Update: Modified: 11/20/08 This update contains information about selected dockets with activity since the last Board meeting.
1. ISO/Regional Electric Issues Meredith attended a regional meeting of ratepayers convened by the Massachusetts Attorney General’s office to discuss winter issues facing ratepayers on September 17, 2008, and ways that regional advocates could work together. The meeting was very well attended, though largely by non-ratepayer organizations (utilities, merchant generators, competitive suppliers, etc.). The attendees agreed that the advocates and consumers in the region should work together to try to impact state, regional and national policies that impact ratepayers. 2. Energy Planning Advisory Board and State Energy Policy Commission The OCA has a seat on both the Energy Planning Advisory Board (EPAB) and the Energy Policy Commission (EPC). The EPC has created three subcommittees: siting of commercial wind facilities, renewable energy, and energy efficiency. Meredith serves on the latter two. The EPC is also charged with reviewing restructuring-related issues. The EPC must issue its final report in December 2008. The EPAB has been on hiatus during the EPC’s existence. The EPC met on September 11, 2008 to discuss the work of a subcommittee focused on wind energy siting issues. The subcommittee worked with an ad hoc group of environmental groups to develop voluntary guidelines for wind energy developers. The EPC sunsets on December 1, 2008 and has its final report due on that date. 3. Energy Efficiency and Sustainable Energy Board This board was created by HB1561 to advise the Commission in several areas, including the expenditure of the RPS funds for renewable energy projects, and RGGI funds for energy efficiency projects. The Board is also charged with developing a plan to achieve the state’s energy efficiency potential, as well as for the economic and environmental sustainability of the state’s energy system. The OCA has a seat on this Board, which includes several state agencies, non-profit organizations, and businesses. The utilities are non-voting parties. The Board has been meeting twice monthly to begin work on its broad charge. All materials are posted at www.puc.nh.gov/EESE.htm. 4. Electric Assistance Program – Advisory Board As of October 24, 2008 there no households on the wait list, and 31,037low income households were enrolled in the program and receiving discounts on their electric bills. On September 30, 2008, the Commission issued Order No. 24,903, approving the EAP Board’s recommendation that the System Benefit Charge for the EAP be raised from 1.2 mils to 1.5 mils ($0.015) per kWh. This is estimated to have a total bill impact of about $2.16 per year for a household using 600 kWh per month. The Commission also approved the EAP budgets for the utilities and the Community Action Agencies for the 2008-2009 program year. The total proposed budget increase will be just under 3%. An EAP quarterly meeting was held on October 16, 2008, which focused largely on updates and a discussion of state efforts to explore ways to enroll eligible people in multiple programs to avoid having to visit several different agencies. The next quarterly meeting will be held on January 16, 2008. 5. DE 06-061 Energy Policy Act of 2005 On April 24, 2006, the Commission opened a docket to consider five new federal energy standards created under the Energy Policy Act of 2005 (EPAct). EPAct requires that each state PUC make determinations as to whether implementation of the standards is appropriate, or if the state has already made progress through prior action. The standards are Interconnection, Time-Based Metering Communications (or "Smart Metering"), Net Metering, Fuel Diversity, and Fossil Fuel Generation Efficiency. The docket is currently focused on the first two standards, and the last three issues are to be addressed in 2008. On January 22, 2008 the Commission issued Order No. 24,819 which concluded “that the potential benefits of time-based rates deserve further inquiry” and will open several dockets to consider implementation for the different utilities. Staff filed its recommendations on May 13 stating that they believe the Commission has no obligation to investigate the net metering, fuel diversity or generation efficiency standards because there is prior state action on the standards which waives the requirements of EPAct. The Commission issued Order No. 24,893 on September 15, 2008 approving the Staff’s recommendations and ordering Staff to establish a working group to facilitate the evaluation and implementation of advanced metering infrastructure and time-based rates, and to report by December 1, 2008 regarding next steps and utility-specific cost-benefit analyses. The Commission also ordered Staff to revise the Puc 900 rules on net metering, and said that it will open a rulemaking docket for that purpose. 6. DE 07-045 Briar Hydro Associates Briar owns and operates the Penacook Lower Falls Project, a 4.1 MW hydroelectric generating facility on the Contoocook River in Penacook and Boscawen. Briar claims that as a result of its purchase of the Penacook Lower Falls Project on June 28, 2002, it has succeeded to New Hampshire Hydro Associates’ rights in the Contract for the Purchase and Sale of Electric Energy dated April 28, 1982 (1982 Power Purchase Contract) with PSNH. The 1982 Power Purchase Contract has a term of 30 years and requires PSNH to purchase the project’s entire generation output, pursuant to the federal Public Utility Regulatory Policies Act (PURPA), and its state analog, the Limited Electrical Energy Producers Act (LEEPA). The current price for that output is 3.53¢/kWh. Briar requests that the Commission determine whether PSNH or Briar is entitled to receive payments for capacity arising under an order of the Federal Energy Regulatory Commission (FERC) (FCM Order). The Commission issued Order No. 24,804 on November 21, which denied Briar Hydro’s Petition. This decision is worth approximately $50,000 annually to ratepayers. Briar Hydro filed a motion for reconsideration and rehearing on December 21, to which PSNH replied on December 31, 2007. A hearing was held on May 20, 2008 to hear oral arguments on certain issues in Briar Hydro’s motion for rehearing. We await the Commission’s decision. 7. DE 07-064 Rate Mechanism for Energy Efficiency On May 14, 2007 the Commission opened a docket to “investigate the merits of instituting, for electric utilities, appropriate rate mechanisms, such as revenue decoupling, which would have the effect of removing obstacles to, and encouraging investment in, energy efficiency.” On November 7, 2007, the Commission held a technical session with presentations from expert representing differing views on decoupling. On March 13, 2008 the Commission issued a letter asking the parties to respond to certain questions. The OCA, in conjunction with the Department of Environmental Services and Office of Energy & Planning, filed a response on April 11, 2008. On June 30, 2008, the Conservation Law Foundation filed a motion for a scheduling order and requesting that the Commission take steps to finish the investigation in the docket. On July 10, NH Legal Assistance on behalf of The Way Home filed an objection to the Conservation Law Foundation’s motion. The Commission has not yet ruled on the motion. 8. DE 07-106 Electric Utilities 2008 CORE Energy Efficiency Programs On December 28, 2007 the Commission issued an Order approving a settlement agreement among the parties regarding the 2009 Core efficiency programs. As one part of the Core programs, the Commission and the utilities are undertaking a study on the remaining energy efficiency opportunities in the state. The Commission awarded a contract to study and quantify all energy efficiency opportunities in New Hampshire to GDS Associates, a consulting company in Manchester. The OCA continues to participate in regular updates with the consultant. The study is expected to be released on November 13, 2008. 9. DE 07-108 PSNH Least Lost Integrated Resource Plan PSNH made their filing on September 28, 2007. A prehearing conference was held on January 31, 2008. Technical sessions were held on March 4 and March 11 on supply-side and demand-side management/energy efficiency issues. Staff filed testimony in June, and PSNH filed rebuttal testimony on August 15. Staff, PSNH and several intervenors representing competitive suppliers and merchant generators reached a settlement in the case. A final hearing was held on October 14, and we now await an order. 10. DE 07-122 PSNH Petition for Clarification and Interpretation of Commission Orders Regarding Hemphill Power & Light On November 9, 2007 PSNH filed a petition seeking a declaratory order concerning PSNH’s obligations to purchase power from Hemphill Power and Light Company (Hemphill), an independent wood-burning power producer located in Springfield. Pursuant to the federal Public Utility Regulatory Policies Act (PURPA) and its New Hampshire analog, the Limited Electric Energy Producers Act, the Commission approved a 20-year rate order in 1985, establishing the terms and conditions for purchases of power from Hemphill by PSNH. The dispute concerns the expiration date of the 1985 rate order. PSNH discontinued payments under the rate order in October 2006; Hemphill contends it was entitled to receive such payments through October 2007. The dispute is also the subject of civil proceedings instituted by Hemphill in Hillsborough County Superior Court. The case involves issues related to the Commission’s jurisdiction to resolve the dispute, as well as substantive questions about the rate order end date and the annual rates paid by PSNH to Hemphill. The Commission convened a prehearing conference on January 7, 2008, after which Hemphill and PSNH agreed to enter settlement discussions. On September 2, 2008 PSNH filed testimony supporting a settlement with Hemphill for $3.5 million, or half of what Hemphill sought. A hearing on the settlement agreement is scheduled for November 6, 2008. 11. DE 08-066 PSNH Reconciliation On May 1, 2008, Public Service Company of New Hampshire (PSNH) requested approval of its proposed reconciliation of revenues and costs associated with its energy service (ES) charge and stranded cost recovery charge (SCRC) for calendar year 2007. The case includes a review of the reconciliation between the revenues and expenses included in the SCRC and ES; the performance of PSNH’s fossil and hydro generation facilities, and how PSNH met its energy and capacity requirement during the 2007 reporting period. Discovery is under way and the final hearing in the case will be held on November 20 th. 12. DE 07-096, DE 07-097, DE 08-69, DE 08-071_PSNH Energy Service, Stranded Cost Recovery Charge, Transmission Cost Adjustment Mechanism and Storm Reserve Account interim year changes On June 27, 2008 the Commission approved changes in PSNH rates resulting in a rate increase of approximately 6% for average residential customers on July 1. See Orders 24,869, 24,870, 24,871 and 24,872). However, on April 30 PSNH filed for a request to adjust its distribution rates, due to increases in fuel costs and market prices. The Commission approved the adjustment and the energy service rate will increase from 8.82¢/kWh to 9.57¢/kWh. The average Stranded Cost Recovery Charge will drop from $0.072/kWh to $0.065/kWh due to the increase in market prices (the remaining wood plant contracts, though still over market, are less so when market prices increase). The Transmission Cost Adjustment Mechanism (TCAM) will increase from $0.0752/kWh to $0.0935 due to increases in regional transmission costs. Lastly, the Storm Reserve account that PSNH maintains for large storms is carrying a negative balance and must be replenished. This will result in PSNH collecting an additional $2.958 million per year over the next two years for the Storm Reserve account. 13. DE 08-077_PSNH Power Purchase Agreement and Renewable Energy Certificate Agreement with Lempster Wind On May 29, 2008 PSNH filed a petition for approval of a Power Purchase Agreement (PPA) and Renewable Energy Certificate (REC) Option Agreement between PSNH and Lempster Wind, LLC (Lempster Wind). Lempster Wind is in the final stages of building a 24 MW wind farm in Lempster, which is expected to be online between September and December. PSNH seeks to enter into a 15-year contract with Lempster under a provision in the Renewable Portfolio Standard (RPS) Act (RSA 362-F) to purchase the energy, capacity and RECs from Lempster. PSNH would use the energy to offset market purchases, and the RECs to meet its obligations under the RPS Act. The RPS Act authorizes multi-year purchase agreements, and requires the Commission to consider issues related to cost-effectiveness, economic development, environmental benefits, and the impact on the competitive markets in its review. Discovery is under way and the final hearing in the case is scheduled for December 9, 2008. Staff filed testimony on October1, 2008 recommending approval of the contract, and Constellation filed testimony the same day raising questions about whether PSNH should have issued an RFP to seek proposals to meet its RPS obligations, and questioning whether the proposed contract term of 15 years is appropriate, and whether it is least cost for ratepayers. A hearing is scheduled for December 9. 14. DE 08-103 Investigation of PSNH Installation of Scrubber Technology at Merrimack Station On August 22, 2008 the Commission issued a Secretarial Letter requesting PSNH to file by September 12, 2008 a comprehensive status report on the “scrubber” installation plans for the coal-fired plant in Bow, a detailed cost estimate for the project, an analysis of the anticipated effect of the project on energy service rates, and an analysis of the effect on energy service rates if Merrimack Station were not in the mix of fossil and hydro facilities operated by PSNH, as well as a memorandum of law addressing the nature and extent of the Commission’s authority relative to the Merrimack Station scrubber project in light of the requirement in RSA 125-O that PSNH must install the scrubber. The Commission’s letter was driven by PSNH’s disclosure in August that the estimated cost of the scrubber has risen from $250 million to $457 million since 2006 (see note below). The Commission’s letter also allowed the OCA to file a memorandum of law. On September 11, 2008 the OCA filed its memorandum of law which argued that the PUC does have jurisdiction to review the significant cost increase, which will be borne by ratepayers. On September 19 the Commission issued Order No. 24,898, finding that it does not have jurisdiction to review the project. On October 17 several parties filed motions for rehearing, including an individual ratepayer, TransCanada (an owner of hydro plants), and three commercial ratepayers including Stonyfield Farm and the Common Man Restaurants. On October 21 TransCanada and the commercial ratepayers also filed motions to stay to stop PSNH from proceeding with the project, after PSNH issued a press release stating that they intended to begin site work on November 3, 2008. On October 23 the Commission issued a secretarial letter suspending its order to allow more time for review of the pending motions. We now await a decision on those motions. All filings in the docket are posted on the OCA’s website, www.oca.nh.gov. NOTE: On August 7, 2008 PSNH’s parent company, Northeast Utilities (NU), filed its quarterly earnings report (10-Q) with the Securities and Exchange Commission (SEC). In its 10-Q, NU reported that it was moving forward with a project to install a wet flue gas desulphurization system, commonly referred to as “scrubber” technology, at Merrimack Station in Bow for the purpose of achieving reductions in mercury emissions as required by RSA 125-O:11 through 18. NU estimated the cost of the scrubber at $457 million, which represented approximately an 80 percent increase over the original estimate of $250 million. 15. DE 08-015 Unitil Energy Service On September 12, 2008, Unitil Energy Systems, Inc. (UES) filed a petition requesting approval of its default service for the period beginning November 1, 2008. The filing was made pursuant to the terms of the settlement agreement approved by the Commission in Unitil Energy Systems, Inc., Order No. 24,511, 90 NH PUC 378 (September 9, 2005), which requires that UES solicit Non-G1 supply in four blocks on a laddered portfolio basis, (i.e., at six month intervals) each block consisting of 25 percent of the power supply requirements for Non-G1 customers, with retail prices based upon a simple average of the wholesale prices for each of the four blocks. Non-G1 includes customers in the residential rate classes. Order No. 24,511 also requires UES to reset retail prices for Non-G1 customers every six months, effective May 1, and November 1, as the composition of the portfolio changes. In this petition, UES requested approval of its solicitation of one 24-month power contract to supply 25% of the requirements for Non-G1 customers, and a contract with Connective Energy Supply, Inc. (Connectiv) to supply that block of UES’s default service requirements. Consistent with Order No. 24,511, UES proposed to reset the rates for its Non-G1 customer classes for the six-month period from November 2008 through April 2009. Under the contract with Connective, the resulting fixed default service rate for Non-G1 residential customers will be $0.11239 per kWh, which amounts to an increase of $0.00948 per kWh, or approximately 9.2 percent, in the cost of the default service energy over the currently effective energy cost. UES attributed the rate increase to the higher contract costs for the period November 1, 2008 through April 30, 2009, compared to the contract costs for the current period, May 1, 2008 through October 31, 2008. On September 17, the Commission convened a hearing on UES’s petition. At that hearing, the OCA supported UES’s petition. The Commission approved UES’s petition on September 19, 2008, in Order No. 24,897. 16. DE 08-011 National Grid Energy Service On September 22, 2008, Granite State Electric Company d/b/a National Grid (National Grid) filed a petition requesting Commission approval of its proposed default service rates for the period November 1, 2008 through January 31, 2009 for medium and large commercial customers (Large Customer Group), and November 1, 2008 through April 30, 2009 for its residential and small commercial customers (Small Customer Group). The filing was made pursuant to a settlement agreement approved by the Commission in 91 NH PUC 6, Order No. 24,577 (January 13, 2006) in Docket No. DE 05-126. National Grid’s Small Customer Group includes residential customers. As a result of its solicitation process, National Grid selected PSEG Energy Resources & Trade, LLC (PSEG) as the supplier for 100 percent of the six-month block of the Small Customer Group’s default service energy requirements beginning November 1, 2008. Under the contract with PSEG, the Small Customer Group would experience a decrease in overall bills in the range of 8.0 percent to 10.4 percent. On average, a residential customer taking 669 kilowatt hours (kWh) per month, which, according to National Grid, is the average kWh monthly usage over the 12 months ending August, 2008 would experience a bill reduction of 8.3 percent. On September 25, 2008, the Commission convened a hearing on National Grid’s petition. At the hearing, the OCA did not object to National Grid’s petition. On September 29, 2008, the Commission approved National Grid’s petition, in Order No. 24,902. 17. DE 08-113 and 08-114 PSNH 2009 Energy Service and Stranded Costs Rates On September 12, 2008 PSNH filed proposed energy service and stranded costs rates for effect on January 1, 2009. PSNH proposes an energy service rate of 10.51 cents/kWh, up from 9.57 cents in 2008. PSNH proposes a stranded cost charge of .9 cents per kWh, up from .65 cents in 2008. Discovery is under way, and a final hearing is scheduled for December 4, 2008. 18. DE 08-120 2009 Core Electric Energy Efficiency Programs On October 6, 2008 the four electric utilities (PSNH, Unitil, National Grid and NH Electric Cooperative) filed their joint proposal for both statewide and utility-specific ratepayer funded energy efficiency programs. Each year ratepayers contribute approximately $20 million to a fund that the utilities manage and spend on efficiency programs. A prehearing conference was held on October 17, and discovery is under way. The final hearing is scheduled for December 11, 2008.
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