{"id":5874,"date":"2012-02-06T17:45:56","date_gmt":"2012-02-06T22:45:56","guid":{"rendered":"http:\/\/stateimpact.npr.org\/new-hampshire\/?p=5874"},"modified":"2012-02-07T16:15:57","modified_gmt":"2012-02-07T21:15:57","slug":"some-key-arguments-for-and-against-making-psnh-sell-off-its-generating-facilities","status":"publish","type":"post","link":"https:\/\/stateimpact.npr.org\/new-hampshire\/2012\/02\/06\/some-key-arguments-for-and-against-making-psnh-sell-off-its-generating-facilities\/","title":{"rendered":"Some Key Arguments For&#8211;And Against&#8211;Making PSNH Sell Its Generating Facilities"},"content":{"rendered":"<div id=\"attachment_5883\"  class=\"wp-caption module image left\" style=\"max-width: 241px;\"><a class=\"fancybox\" title=\"Should NH's main power company be forced to give up its generating capacity?\" href=\"http:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/3314132434_180fe01ebe.jpg\" rel=\"\"><img decoding=\"async\" loading=\"lazy\" class=\"size-medium wp-image-5883\" title=\"Electricity\" src=\"http:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/3314132434_180fe01ebe-300x373.jpg\" alt=\"\" width=\"241\" height=\"300\" srcset=\"https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/3314132434_180fe01ebe-300x373.jpg 300w, https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/3314132434_180fe01ebe-220x273.jpg 220w, https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/3314132434_180fe01ebe.jpg 402w\" sizes=\"(max-width: 241px) 100vw, 241px\" \/><\/a><p class=\"wp-media-credit\">elycefeliz \/ Flickr<\/p><p class=\"wp-caption-text\">Should NH&#39;s main power company be forced to give up its generating capacity?<\/p><\/div>\n<p>One of the big issues in the New Hampshire business community <a title=\"The Ultimate Economic Guide To The 2012 NH Legislative Session\" href=\"http:\/\/stateimpact.npr.org\/new-hampshire\/tag\/nh-legislature-2012\/\" target=\"_blank\">this legislative session<\/a> is the push to continue deregulating utilities.\u00a0 The state&#8217;s current power regulation model is something of a hybrid between old-fashioned regulation and deregulation.\u00a0 The idea is, there are regulated utility companies (like <a title=\"PSNH\" href=\"http:\/\/www.psnh.com\/For-My-Home.aspx\" target=\"_blank\">PSNH<\/a>, which the Public Utilities Commission <a title=\"PUC Electric\" href=\"http:\/\/www.puc.nh.gov\/Electric\/electric.htm\" target=\"_blank\">reports<\/a> serves 70 percent of the state&#8217;s &#8220;retail customers&#8221;)&#8230;but customers aren&#8217;t forced to use it.\u00a0 With some deregulation going into effect about 10 years ago, customers were allowed to shop around for cheaper rates from other, unregulated electric providers.<\/p>\n<p>Now, <a title=\"HB 1238\" href=\"http:\/\/www.gencourt.state.nh.us\/legislation\/2012\/HB1238.html\" target=\"_blank\">HB 1238<\/a> would move toward completing the process of deregulation by making PSNH sell off all its generating assets&#8211;&#8220;fossil, hydro, and biomass&#8221;&#8211;by the end of next year.\u00a0 While the committee hearing for the bill took place on Thursday, February 2, the House Science, Technology, and Energy Committee is holding an executive session tomorrow at 10:00 am.\u00a0 Given the complicated nature of this issue, we decided to highlight some of the arguments for&#8211;and against&#8211;continued deregulation.<!--more--><\/p>\n<p>This afternoon, the <a title=\"Conservation Law Foundation\" href=\"http:\/\/www.clf.org\/\" target=\"_blank\">Conservation Law Foundation<\/a> (a group that is, incidentally, a well-known opponent of <a title=\"Why The Northern Pass Project Matters\" href=\"http:\/\/stateimpact.npr.org\/new-hampshire\/tag\/northern-pass\/\" target=\"_blank\">Northern Pass<\/a>, a partnership of which PSNH is a part), emailed their arguments in favor of HB 1238 to various media outlets.\u00a0 In the message, CLF attorney Christophe Courchesne wrote:<\/p>\n<blockquote>\n<ul>\n<li>&#8220;Per the attached PSNH filing (PSNH Projected 2012 Capacity Factors, Docket No. DE\n<div id=\"attachment_5884\"  class=\"wp-caption module image right\" style=\"max-width: 230px;\"><a class=\"fancybox\" title=\"The CLF argues the utility's generating facilities actually cost ratepayers more money\" href=\"http:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/5741325948_0a57d767bb.jpg\" rel=\"\"><img decoding=\"async\" loading=\"lazy\" class=\"size-medium wp-image-5884\" title=\"Electricity\" src=\"http:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/5741325948_0a57d767bb-300x390.jpg\" alt=\"\" width=\"230\" height=\"300\" srcset=\"https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/5741325948_0a57d767bb-300x390.jpg 300w, https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/5741325948_0a57d767bb-220x286.jpg 220w, https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/5741325948_0a57d767bb.jpg 384w\" sizes=\"(max-width: 230px) 100vw, 230px\" \/><\/a><p class=\"wp-media-credit\">elycefeliz \/ Flickr<\/p><p class=\"wp-caption-text\">The CLF argues the utility&#39;s generating facilities actually cost ratepayers more money<\/p><\/div>\n<p>11-215), PSNH is predicting that Merrimack Station\u2019s two units will operate <strong>at less than 50% of their capacity<\/strong> this year. The two coal-fired units at Schiller will operate at about <strong>25% of their capacity<\/strong>. Newington will operate at <strong>4% capacity<\/strong>.\u00a0 For about six full months of 2012 (indicated as months with a 0% capacity factor), PSNH ratepayers will be paying PSNH for all the fixed costs of its fossil-fuel fired power plant fleet, plus a return on the book value of that fleet, while it sits completely idle and provides no power to ratepayers whatsoever.\u00a0 During this time, PSNH ratepayers also have to pay PSNH to buy replacement power from the market for 100% of their needs.<\/li>\n<\/ul>\n<ul>\n<li>The attached data response in Docket No. DE 10-261 shows that <strong>in 2010, PSNH ratepayers subsidized other New England ratepayers for 1,766 hours<\/strong> when PSNH ran its more expensive plants beyond its customers\u2019 needs, and collected less than its costs from those sales.\u00a0 The data response confirms that this forced subsidy was a function of the uneconomic and outdated operating characteristics of these facilities.<\/li>\n<li>As reflected in the attached chart, with the scrubber factored into PSNH rates, PSNH ratepayers will be paying the highest rates for energy service in New Hampshire, by far.&#8221;<\/li>\n<\/ul>\n<\/blockquote>\n<p>In a previous email Courchesne sent to committee leadership, he wrote:<\/p>\n<blockquote>\n<ul>\n<li>\n<div id=\"attachment_5885\"  class=\"wp-caption module image left\" style=\"max-width: 225px;\"><a class=\"fancybox\" title=\"\" href=\"http:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/3565033594_dc31963a11.jpg\" rel=\"\"><img decoding=\"async\" loading=\"lazy\" class=\"size-medium wp-image-5885\" title=\"Electricity\" src=\"http:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/3565033594_dc31963a11-300x400.jpg\" alt=\"\" width=\"225\" height=\"300\" srcset=\"https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/3565033594_dc31963a11-300x400.jpg 300w, https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/3565033594_dc31963a11-220x293.jpg 220w, https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/3565033594_dc31963a11.jpg 375w\" sizes=\"(max-width: 225px) 100vw, 225px\" \/><\/a><p class=\"wp-media-credit\">MarksandSparks \/ Flickr<\/p><p class=\"wp-caption-text\">The CLF also says the facilities are money-losers<\/p><\/div>\n<p>&#8220;Schiller Station is losing money and will lose money for the foreseeable future. Based on a report prepared by Synapse Energy Economics, CLF submitted testimony to the NH PUC in July that shows that <strong>Schiller\u2019s net revenue will be negative by at least $10 million every year over the next ten years, totaling a negative $147 million over ten years<\/strong>.\u00a0 Changing assumptions about natural gas prices and other variables does not alter the conclusion that Schiller will have substantial negative cash flow over the period. (<a href=\"http:\/\/www.puc.nh.gov\/Regulatory\/Docketbk\/2010\/10-261.html\">http:\/\/www.puc.nh.gov\/Regulatory\/Docketbk\/2010\/10-261.html<\/a>, CLF testimony and exhibit dated 7\/27\/11)<\/li>\n<li>Last week, PSNH projected in a discovery response to PUC staff (attached) that its supposed flagship in which it has invested so heavily \u2013 Merrimack Station \u2013 may not operate <strong><span style=\"text-decoration: underline;\">for five months this year<\/span><\/strong> because it will be uneconomic to incur the costs of running the plant. (See attached chart \u2013 note the dashes showing the months for which no fuel cost is estimated.)&#8221;<\/li>\n<\/ul>\n<\/blockquote>\n<p>Meanwhile, in a <a title=\"Why PSNH Opposes HB 1238\" href=\"http:\/\/www.psnh.com\/MediaCenter\/Press-Releases\/2012-Press-Releases\/Why-PSNH-Opposes-HB-1238.aspx\" target=\"_blank\">recent media release<\/a>, PSNH outlined its opposition to the bill:<\/p>\n<blockquote>\n<div id=\"attachment_5886\"  class=\"wp-caption module image right\" style=\"max-width: 214px;\"><a class=\"fancybox\" title=\"\" href=\"http:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/420712025_835fc8392a.jpg\" rel=\"\"><img decoding=\"async\" loading=\"lazy\" class=\"size-medium wp-image-5886\" title=\"Electricity\" src=\"http:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/420712025_835fc8392a-300x420.jpg\" alt=\"\" width=\"214\" height=\"300\" srcset=\"https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/420712025_835fc8392a-300x420.jpg 300w, https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/420712025_835fc8392a-220x308.jpg 220w, https:\/\/stateimpact.npr.org\/new-hampshire\/files\/2012\/02\/420712025_835fc8392a.jpg 357w\" sizes=\"(max-width: 214px) 100vw, 214px\" \/><\/a><p class=\"wp-media-credit\">Merlinprincesse \/ Flickr<\/p><p class=\"wp-caption-text\"> PSNH argues the current model insulates ratepayers from market volatility<\/p><\/div>\n<p>\u201c&#8217;PSNH customers have saved more than $700 million over the last decade because our energy was priced below the market price for most of that time,&#8217; said [Terry] Large, [PSNH Director \u2013 Business Planning and Customer Support Services]. &#8216;A question for the Legislature is: \u2018is it in the best interest of consumers to eliminate their ability to choose, and instead rely solely on a market that is driven mainly by a single fuel, natural gas, which historically has experienced significant price volatility?\u2019&#8217;<\/p>\n<p>In his testimony to the House Science, Technology and Energy Committee, Large also testified that a forced sale will likely create &#8216;stranded costs&#8217; that will be recovered from all PSNH customers. Simply put, a stranded cost would be the difference between the sale price and value of the plants that PSNH is eligible to recover. Large noted that the energy market is currently depressed due to the economic recession and abnormally low natural gas prices; factors that may depress the sale price of the power plants in the near term.<\/p>\n<p>A forced sale at this time could result in significant stranded costs, and the loss of jobs and local taxes if the plants were shutdown.&#8221;<\/p><\/blockquote>\n<p>In other words, there&#8217;s good fodder for conversation during tomorrow&#8217;s executive session.<\/p>\n<p>Meanwhile, if you&#8217;d like to cram for the big event, or just want to see what the Conservation Law Foundation is referring to, we&#8217;ve the documents they sent along embedded below.<\/p>\n<h4>PSNH Projected 2012 Capacity Factors<\/h4>\n<div class=\"embed-documentcloud\" style=\"text-align: center;\"><a href=\"https:\/\/www.documentcloud.org\/documents\/289798-psnh-projected-2012-capacity-factors.html\">https:\/\/www.documentcloud.org\/documents\/289798-psnh-projected-2012-capacity-factors.html<\/a><\/div>\n<h4>NH Electric Default Service Rates January 2012<\/h4>\n<div class=\"embed-documentcloud\" style=\"text-align: center;\"><div class=\"DC-embed DC-embed-document DV-container\"> <div style=\"position:relative;padding-bottom:77.22222222222214%;height:0;overflow:hidden;max-width:100%;\"> <iframe src=\"\/\/www.documentcloud.org\/documents\/289800-nh-electric-default-service-rates-jan-2012.html?embed=true&amp;responsive=false&amp;sidebar=false\" title=\"NH Electric Default Service Rates Jan 2012 (Hosted by DocumentCloud)\" sandbox=\"allow-scripts allow-same-origin allow-popups allow-forms\" frameborder=\"0\" style=\"position:absolute;top:0;left:0;width:100%;height:100%;border:1px solid #aaa;border-bottom:0;box-sizing:border-box;\"><\/iframe> <\/div> <\/div><\/div>\n<h4>Data Responses Re: Market Sales<\/h4>\n<div class=\"embed-documentcloud\" style=\"text-align: center;\"><a href=\"https:\/\/www.documentcloud.org\/documents\/289799-data-responses-re-market-sales-clf-02-06-01-11-3.html\">https:\/\/www.documentcloud.org\/documents\/289799-data-responses-re-market-sales-clf-02-06-01-11-3.html<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>One of the big issues in the New Hampshire business community this legislative session is the push to continue deregulating utilities.\u00a0 The state&#8217;s current power regulation model is something of a hybrid between old-fashioned regulation and deregulation.\u00a0 The idea is, there are regulated utility companies (like PSNH, which the Public Utilities Commission reports serves 70 [&hellip;]<\/p>\n","protected":false},"author":28,"featured_media":5883,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[53],"tags":[504,497,555,557,515],"acf":[],"_links":{"self":[{"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/posts\/5874"}],"collection":[{"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/users\/28"}],"replies":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/comments?post=5874"}],"version-history":[{"count":15,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/posts\/5874\/revisions"}],"predecessor-version":[{"id":5893,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/posts\/5874\/revisions\/5893"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/media\/5883"}],"wp:attachment":[{"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/media?parent=5874"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/categories?post=5874"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/new-hampshire\/wp-json\/wp\/v2\/tags?post=5874"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}