For Immediate Release

Contact

Michael J. Crouse, Staff Attorney
(603) 271-1173 | Michael.J.Crouse@oca.nh.gov

Tree Trimming Troubles at Liberty

OCA Seeks PUC Investigation

If you hired someone to mow your lawn for a fixed price, you paid them, but then they only did 68 percent of the work, what would you do?  If a mowed lawn were essential to your safety and security, would you just pay the person a second time?

Of course not.  But Granite State Electric Company – which does business under its parent company’s trade name Liberty – apparently has different ideas.

Liberty doesn’t have any lawns to mow, but it has trees to trim.  Untrimmed trees next to overhead electric lines tend to cause outages when falling limbs make contact with adjacent wires.  So, in its last rate case, Liberty obtained permission from the Public Utilities Commission to spend $2.4 million a year on tree trimming.

In that recent rate case, DE 19-064, Liberty freely entered into a settlement agreement that put the utility on a four-year trim cycle. That means Liberty agreed, with the PUC’s approval, that it would complete approximately 214 miles of tree trimming annually. In 2023, Liberty completed just 146 miles of this work, known in the trade as “vegetation management.”

Regrettably, 2023 was not unique. Via its own testimony in the Company’s most recent Vegetation Management Plan (VMP) filing (DE 24-044), Liberty discloses that it has allowed an increasing inventory of deferred vegetation management work to build up since the settlement agreement was approved four years ago — approximately 214 miles – or an entire year’s worth of work.

That’s right – Liberty has allowed itself to get a whole year behind on tree trimming.  How could this have happened?

Presumably, the reason is money.

Via that same settlement agreement, Liberty agreed to eat (i.e., not recover from its customers) any VMP expense that exceeds $2,420,000 annually in staying on the agreed-to four-year trim cycle. The settlement agreement’s terms with respect to Liberty’s VMP continue until changed by the Public Utilities Commission in a future rate case. However, Liberty has faced financial challenges which are increasing the cost of its VMP that have presumably led Liberty to believe it negotiated a poor deal in hindsight.

For example, in 2021, Liberty’s tree trimming contractor, ClearWay, unexpectedly defaulted –causing Liberty to contract with a different provider, Asplundh, at a higher rate, increasing Liberty’s costs. As noted in the PUC’s order on the Company’s vegetation management costs from that year, Liberty faced one of its lowest achievements in VMP as a result.

Meanwhile, the landline telephone utility Consolidated abruptly stopped paying its share of vegetation management costs for poles it co-owns with Liberty.  The PUC warned against shifting the resulting unreimbursed costs onto the backs of Liberty ratepayers.

But in spite of the above, Liberty is presently seeking to recover an annual tree trimming budget of $4 million via the utility’s pending rate case.  That $4 million includes the increasing cost of its deferred vegetation work it should have already performed but cannot otherwise currently recover from customers pursuant to the settlement agreement from the last rate case. The state’s Department of Energy also states, in written testimony, that it believes Liberty has not demonstrated its proposed VMP will provide future benefits to customers to warrant this substantial budget increase.

However, Liberty faces multiple other challenges in its pending rate case that affect both the review of its VMP and any potential corrective action. The Department has moved to dismiss the entire case based on the unreliability of Liberty’s underlying books and records. Even if not dismissed, the rate case is likely to be delayed in light of the PUC’s April 30 order expressing disappointment in Liberty poor judgment and directing the Department to perform a comprehensive audit.   In other words, meaningful review of Liberty’s Vegetation Management Plan seemed to have been thwarted.

Therefore, on behalf of residential customers, the OCA has petitioned the Commission to initiate an investigation pursuant to RSA 374:7 in a new docket (DE 24-073). RSA 374:7 vests in the Commission the power to conduct such investigations of investor-owned utilities and issue orders based on its findings — meaning the PUC can order Liberty to comply with the settlement agreement resolving its previous rate case, including having Liberty eat the cost of its noncompliance.

Liberty freely entered into that agreement and made legally binding commitments therein. Liberty cannot continue to defer its legally binding obligations and expect to impose on its customers the increasing cost of work it should have already performed. “Residential customers are facing increasing cost burdens resulting from Liberty’s admitted noncompliance and the OCA looks forward to participating in any such investigation that addresses these higher than necessary costs,” said Staff Attorney Michael Crouse.

Please follow Docket No. DE 24-073 for updates on the investigation as it progresses.