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PSNH to Propose Alternative Default Energy Service Rate —again May 1, 2012

Posted by freedomenergy in Lead Story.
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For the third time since last summer, PSNH seeks ways to make consumers pay for taking advantage of electric supply choice.

In its latest attempt, PSNH announced to the PUC its plan to resurrect a version of the “Alternative Default Energy Service Rate”—rejected by the New Hampshire PUC in January of this year.  This time around, the ADE would affect all consumers in PSNH territory, both large and small users.

According to verbal testimony, PSNH’s new proposal will seek an ADE for resident and small business accounts, as well as large users, that choose alternative suppliers and then seek to return to PSNH default service.  The revision seems to stem from the alternative electricity options offered by FEL sister company Resident Power (RP), says Bart Fromuth, Managing Director of RP.

In the ADE it introduced last fall, PSNH sought to charge an Alternative Default Rate plus an “adder” to recover costs of the Merrimack Station scrubber pollution control system

Freedom Energy Logistics argued that while the ADE might address symptoms, it ignored the underlying disease causing PSNH to lose market share and profits, stating,”…PSNH’s problems all stem from an ever widening gap between what PSNH must charge to maintain its financial   health and the much lower prices that competitive suppliers will be able to charge.” No amount of higher rates and added surcharges can change the continuing negative impact of PSNH’s past bad choices.

Although the ADE was rejected, the NH PUC approved a PSNH consumer rate hike of 5.29% effective April 16 to start recovering costs of the $359.1 million project. PSNH had requested the price hike include $1.58 cents/kWh, but received $.98/kWh in this temporary rate hike.

The first ADE was introduced by PSNH after the New Hampshire PUC rejected its proposal for a Non-Bypassable Surcharge to all.  The ADE would have charged all customers in PSNH territory the fixed costs of generation assets, whether or not their power was supplied by PSNH.  In its rejection, the PUC stated, “Such a charge, in our view, would constitute unfair cost-shifting to customers that have taken advantage of competitive supply. “ The Surcharge would have been “contrary to principles of restructuring…customer choice and minimization of customer confusion.”

On April 12, In response to a continuing pattern of decisions that put PSNH’s smaller accounts at a disadvantage,  FEL affiliate  Power New England proposed three simple modifications to PSNH’s Tariff to ensure that all of PSNH’s small customers  benefit from retail electricity competition. The modifications are simply intended to begin the process of bringing PSNH into line with other New England utilities, most notably PSNH’s affiliates in Massachusetts and Connecticut per Jim Rodier (with transition by B).

FEL’s response to all such efforts to charge electricity consumers for the effects of deregulation–no matter what PSNH names the surcharge–remains the same:  Deregulation was undertaken to let the competitive marketplace work, therefore it should be allowed to work. Regulatory intervention to fix a marketplace is unnecessary when the marketplace is already reordering itself.  Not only are such efforts unnecessary but, strangely, they assault the original purpose of deregulation