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Friday, February 3, 2012

PSNH opposes power plants sale

CONCORD – Public Service of New Hampshire led an all-out assault Thursday against legislation that would force the state’s largest utility to sell off its power plants.

When the Legislature restructured the industry a decade ago, originally PSNH had advocated for divesting from their plants.

But now they oppose the move and warn it would lead to higher costs for consumers, put at risk hundreds of jobs and more than $9 million in property taxes paid from these power plants.

“Our customers today have the best of both worlds because they can buy from the market when it is cheaper than PSNH energy, and they can buy from PSNH when the market is more expensive,” said Terry Large, PSNH director of business planning and customer support services.

“Therefore, the consumer never pays too much for electricity.

“To be clear: New Hampshire completed electric utility deregulation. The state chose to do it differently than some other states, and PSNH customers have been the beneficiaries.”

The crowd of opponents only filled half the seats in cavernous Representatives Hall but included dozens of PSNH employees, business customers, economists and some municipal officials including a top aide to Nashua Mayor Donnalee Lozeau and Manchester Mayor Ted Gatsas.

“Given how all of our constituents depend on this essential service, it is critical that New Hampshire has a system in place that ensures reliable service and protects them from the volatility of the energy market,” Lozeau and Gatsas wrote in a joint letter.

“New Hampshire already has that system in place and it deserves to be maintained.”

Supporters of the concept, largely competing power companies and some environmental groups, said it would spur more competition for energy spending and ultimately save consumers more money in the future.

Former Federal Energy Regulatory Commission member William Massey said PSNH makes 50 percent of sales to all customers and 72 percent of residential consumers in the state.

By contrast, 90 percent of large customers and 60 percent of medium-sized businesses have switched suppliers in neighboring Massachusetts, Massey noted.

“Divesting the company’s remaining generation assets is a necessary foundation for a competitive retail market and improving customer choice in New Hampshire,” said Massey, of the Compete Coalition with 600 electicity suppliers and customers as its members.

“And with greater competition in its electricity market, New Hampshire will help keep electricity cost as low as possible, drive greater innovation in products and services, and produce other benefits for customers while ensuring a reliable supply of electricity.”

Dan Dolan with the New England Power Generators Association said making PSNH sell its three fossil fuel and nine hydroelectric plants would help consumers and the utility in the long run.

“Delaying any longer the completion of what the PUC called a transition away from utility-owned generation to a competitive model for all consumers would simply continue a fatally flawed structure,” Dolan remarked.

Critics point out PSNH has admitted in recent years losing many of its larger customers that have sought cheaper energy with competitors. A year ago, PSNH supporters had initially asked lawmakers to consider imposing a “bypass charge” for future PSNH users who left the system.

PSNH generation makes up 27 percent of NH’s energy capacity but only 3.4 percent of the New England market.

While 15 states have deregulated electricity generation starting just after 2000, PSNH official Large noted seven states have suspended it, four put in price caps and two others states are exploring whether to go back to full regulation of the market.

“As history has shown us, deregulation of the electric industry didn’t work in other states. Why would it work here in New Hampshire?” Large asked rhetorically.

Lyndeborough Republican Rep. Frank Holden authored this bill (HB 1238) to raise the matter and admitted having no position on it.

Kevin Landrigan can reached at 321-7040 or klandrigan@nashuatelegraph.com; also check out Kevin Landrigan (@KLandrigan) on Twitter and don’t forget The Telegraph’s new, interactive live feed at www.nashuatelegraph.com/topics/livefeed.