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Eversource hits the panic button

By Donald M. Kreis - Power to the People | Nov 11, 2022

Joseph R. Nolan, Jr., President and Chief Executive Officer of Eversource, received nearly $6.5 million in compensation last year. Or, at least, so says the 2022 annual proxy statement of the region’s biggest utility empire.

His recently retired predecessor, Executive Chairman James J. Judge, received $10.2 million in compensation for that year. Again, look on page 59 of the document furnished to the Company’s shareholders and filed with federal regulators.

Therefore, on behalf of New Hampshire’s residential ratepayers, I am floored – absolutely floored – by what these people sent their employees into the hearing room of the New Hampshire Public Utilities Commission (PUC) today to request.

The issue is Default Energy Service. As of September, roughly 84 percent of the Company’s residential energy customers were on default service, despite their right to choose a different supplier. September was the month after the Default Energy Service rate doubled, to nearly 22.6 cents per kilowatt hour.

Now it is time to procure Default Energy Service for the next six months, beginning on February 1, 2023. The company recently issued a request for proposals, to wholesale suppliers, to meet that load. And today, publicly, Eversource hit the panic button.

Appearing before the PUC, Eversource officials warned they might not receive enough bids to serve the Default Energy Service load, on the due date of December 6. Or there might be only 1 or 2 bids, as recently happened to Eversource in Massachusetts and Connecticut.

Does all of this portend a new Default Energy Service rate for Eversource, beginning in February, that is even more outrageously unaffordable than the current rate? Dunno. Does the species Ursus Americanus excrete solid waste in the Northern Forest?

Eversource’s lawyer warned the PUC of “exigent circumstances” arising out of “a breakdown in the competitive market.” She therefore urged the utility regulators to adopt a more “collaborative approach” to procuring Default Energy Service this time around.

Here’s what Eversource has in mind. The bids arrive – or, perhaps, do not arrive – at 10:00 a.m. on December 6. At that point, Eversource wants the PUC to convene a closed door session at which the utility, the Department of Energy, the Office of the Consumer Advocate, and the company all put their heads together on what to do.

Oh – did I mention that any contracts must be executed by 3:00 p.m.?

In other words, this utility wants the Department of Energy to hold one of its hands, and the Office of the Consumer Advocate to hold the other, at a secret meeting with the three PUC commissioners on December 6 so everyone shares responsibility for addressing the, uh, “exigent circumstances.”

Seriously? Joseph R. Nolan, Jr. – the same highly compensated utility executive who recently wrote a very public letter to the President of the United States, full of all kinds of opinions on what to do about the possibility of insufficient electricity in the depths of the winter now upon us – won’t take responsibility to make what is admittedly a tough call on behalf of his customers in the Granite State?

Reality check: What Eversource is proposing here is illegal and an affront to due process.

First of all, you can’t put the three PUC commissioners in a room, require them to participate in a huge financial decision, and then have them ruling on the prudence of that very same decision just days later. That would be a travesty of the regulatory process.

Second, Eversource – officially known as Public Service Company of New Hampshire – has held a utility franchise in New Hampshire since the dawn of electricity. That means Eversource has the obligation to serve its customers and to do so prudently. Nothing about the state’s electric industry restructuring law, passed in 1996, relieved any of our electric utilities of that solemn responsibility.

Eversource points out that my counterpart in Connecticut – known there as the Consumer Counsel – does exactly what the Company is now proposing the Consumer Advocate (and everyone else aforementioned) do in New Hampshire. But all of that is authorized under Connecticut Law, and proceeds under a thoughtfully developed procurement plan.

The Office of Consumer Counsel in Connecticut has an outside consultant – an expert on wholesale electricity markets – to advise it on what to do about the wholesale bids that come in for backstop electric service down there. I have no such help, and there is not time to lay it on between now and December 6.

Oh – and in Connecticut, the utility commissioners are not in the room where it happens. Nor does that happen in Massachusetts.

During the PUC proceedings at which Eversource went through its proposal – which it plans to file in writing next week – the question arose of whether it might make sense, depending on how things play out, for Eversource to go back to the drawing board.

In other words, rather than enter into wholesale contracts on December 6, maybe Eversource should issue a second request for proposals – perhaps offering different terms?

Eversource’s director of electric supply, James Shuckerow, predicted that such a second solicitation would fail and would, in fact, unhelpfully roil the region’s wholesale electricity market. He then added that it might be difficult for everyone in the entities involved to put in the necessary work because by then it will be “holiday season.”

Seriously? Tell that to the thousands of Granite Staters whose holiday season is about to be ruined by 22.6 cent electricity.

The last resort here is the “spot” wholesale electricity market of regional grid operator ISO New England. There the price varies constantly and often wildly. The idea of residential utility customers being sent, naked, into that market – well, there’s a December chill for you.

A few months ago, the Concord Monitor ran an article comparing the unaffordable Default Energy Service price to the lavish compensation enjoyed by Eversource’s senior executives in Massachusetts and Connecticut. At the time I thought this was unfair, given that Eversource is a wholesale buyer, not a wholesale seller.

I defended Eversource’s executives then. I am not defending them now.

Power to the People is a column by Donald M. Kreis, New Hampshire’s Consumer Advocate. Kreis and his staff of four represent the interests of residential utility customers before the NH Public Utilities Commission and elsewhere.


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