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Wednesday, March 21, 2012

PSNH divestiture bill clears House committee

CONCORD – A surprise plan to make Public Service of New Hampshire sell power plants that generate higher-priced power won bipartisan support from a key House committee Tuesday.

A month ago, the aggressive lobbying campaign from PSNH, along with many of their small- and large-business customers, appeared to have succeeded in keeping this divestiture bill, HB 1238, from gaining traction.

The sponsor, Rep. Frank Holden, R-Lyndeborough, said he did not even have a position on it while speaking before a crowd of more than 300 who packed a Representatives Hall hearing to oppose it.

But a strange set of bedfellows on the House Science, Technology and Energy Committee emerged with a rewritten bill, winning support by a 12-2 count.

Rep. Naida Kaen, D-Durham, a former committee chairman, was one of the architects of the compromise.

“I don’t know which plants should be divested and what, if any, ones would be. But it’s time we fully examined that,” Kaen said.

This is far more than a study bill because as written, it orders PSNH to divest any of its generating assets that the state Public Utilities Commission finds would be in the “economic interest” of its retail customers.

The bill orders the commission to begin a hearing on divestiture by next Aug. 1.

If the commission finds any of PSNH’s coal, hydro or biomass plants should be sold off, the utility has six months to do so.

A clear majority on the committee favored divestiture but did not want the Legislature to be the ones to carry it out, instead giving state utility regulators the final call.

Rep. Jim Garrity, R-Atkinson, the committee’s chairman, had tried to turn the divestiture issue into a study for an ongoing legislative panel that looks at electricity restructuring.

Garrity’s plan lost in committee, 9-5, so he teamed with Kaen to endorse this form of divestiture and give the legislative panel an oversight role in the future.

Martin Murray, spokesman for PSNH, declined comment until company executives could study the amended bill.

“We haven’t had a chance to thoroughly review the amendment and do not expect to have a comment on it today,” Murray said in a statement Tuesday.

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 said.

Critics point out PSNH has admitted in recent years to 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 the state’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 officials note that 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.

Former Gov. Craig Benson authored an op-ed earlier this week endorsing divestiture.

The Rye Republican, who served one term, said he had wanted the sell-off of PSNH generation to occur back in 2003 but agreed to delay it after state Senate leaders convinced him this would be too harmful to PSNH ratepayers.

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.