DR 98-197
Public Service Company of New Hampshire
Fuel and Purchased Power Adjustment Clause
Order Approving Settlement
O R D E R N O. 23,073
December 1, 1998
APPEARANCES: Gerald M. Eaton, Esq. for Public Service
Company of New Hampshire; Dean, Rice and Kane, by Mark W. Dean,
Esq. for the New Hampshire Electric Cooperative; Gary R. Gilmore,
for the Campaign for Ratepayers' Rights; Michael Holmes, Esq., of
the Office of Consumer Advocate for residential ratepayers; and
Eugene F. Sullivan, III, Esq. for the Staff of the New Hampshire
Public Utilities Commission.
I. PROCEDURAL HISTORY
On November 10, 1998, Public Service Company of New
Hampshire (PSNH or the Company) filed with the New Hampshire
Public Utilities Commission (NHPUC or the Commission) a
Stipulation and Settlement signed by the Company, the Governor's
Office of Energy and Community Services (OECS) and the Commission
Staff (Staff) maintaining the currently effective Fuel and
Purchased Power Adjustment Clause (FPPAC) rate of 0.383 cents/kWh
for the period from December 1, 1998 through May 31, 1999.
On November 10, 1998, the Commission issued an Order of
Notice scheduling a Prehearing Conference on November 20, 1998,
ordering a technical session to be held on the same day, setting
deadlines for intervention and objections thereto, waiving in
part the notification requirements, and setting a hearing date
for November 24, 1998. The New Hampshire Electric Cooperative
(NHEC) filed a written request for intervention on November 10,
1998.
On November 13, 1998, PSNH filed the Prepared Direct
Testimony of Robert A. Baumann, Manager-New Hampshire Revenue
Requirements and Fuel Recovery for Northeast Utilities Service
Company, and exhibits supporting the calculation of the FPPAC
rate.
The Commission granted the unopposed motions for
intervention of CRR and NHEC.
II. POSITIONS OF THE PARTIES AND STAFF
A. Settlement
The Settlement, signed by PSNH, the Staff, and OECS,
proposes to keep the currently effective FPPAC rate of 0.383
cents per kWh in effect for the period from December 1, 1998
through May 31, 1999 for all retail customers. Maintaining the
current FPPAC rate will result in an estimated recovery of $13
million and an estimated under-recovery of $83 million for the
period ending May 31, 1999. The estimated $83 million of
under-recovery is composed of $67 million deferred recovery from
the prior FPPAC period, $9 million in light loading, and $7
million of Seabrook refueling cost (50% of the estimated total
PSNH Seabrook refueling costs). PSNH agrees to forego interest
on the current period under-recovery. Deferred costs that have
not previously been subject to Commission review and approval
will be subject to such review to demonstrate prudence at the
next FPPAC proceeding. The Stipulation is dependent upon PSNH
being granted waivers from its lender banks under the Revolving
Credit Agreement and the Series D and E Amended and Restated
Letters of Credit and Reimbursement Agreements.
B. PSNH
PSNH supported the Settlement through direct testimony.
PSNH testified that it was currently involved in discussions
concerning restructuring and felt it necessary to seek solutions
to the FPPAC proceeding which did not increase rates.
PSNH stated in the hearing that the rates paid to Qualifying
Facilities under short-term avoided cost were calculated in the
same manner as used in past FPPAC dockets. The proposed
Qualifying Facilities rates are as follows:
Short Term Rates (cents/kWh)
Project Type On-peak Off-Peak All Hours
All Projects Under
500 kW 2.7441 2.3201 2.4831
Projects Over 500 kW
Great Falls Upper 2.8277 2.3621 2.5446
Dunbarton Landfill 2.4581
Rochester Landfill 2.4713
Capacity cost is calculated as $2.40/kW-month.
C. Office of Consumer Advocate
At the Prehearing Conference, the OCA stated it had no
opposition to the Stipulation as filed. At the hearing, the OCA
raised questions about whether PSNH will recover in this FPPAC
rate the discounts provided to special contract customers.
D. Governors Office of Energy and Community Service
Although not an intervenor in the procedure, OECS was a
signatory and supporter of the Settlement.
E. Campaign for Ratepayer's Rights
At the Prehearing Conference, CRR stated it was pleased
there is no intended rate increase and did not object to the
Settlement.
F. Commission Staff
Although the Staff did not provide testimony, it was a
signatory and supporter of the Settlement.
III. COMMISSION ANALYSIS
We have reviewed the proposed Settlement and supporting
testimony and exhibits and find the Settlement to be in the
public interest. Based upon the circumstances regarding
restructuring discussions at this time and upon PSNH's
willingness to forego the interest on its deferred recovery for
this FPPAC period we believe the Settlement to be in the best
interest of PSNH's customers. We understand PSNH has notified
our Staff that the Company has received verbal confirmation of
the necessary waivers from a two-thirds majority of its lender
banks under the Revolving Credit Agreement and the Series D and E
Amended and Restated Letters of Credit and Reimbursement
Agreements to continue the FPPAC deferral of prior period costs.
We direct PSNH to file with the Commission a copy of written
confirmation once it is available.
In response to the OCA's concerns about the recovery of
special contract discounts, PSNH represented that it will not
seek such recovery in this FPPAC rate and that no part of its
expected $83 million under-recovery is attributable to the
special contract discounts. Based on these representations as
well as those made by PSNH in DR 98-139, our concerns in this
regard have been adequately addressed.
Based upon the foregoing, it is hereby
ORDERED, that the Settlement which establishes a Fuel
and Purchased Power Rate of 0.383 cents per kWh for the period
December 1, 1998 to May 31, 1999 is APPROVED as just and
reasonable, and it is
FURTHER ORDERED, that the Qualifying Facility rates are
approved as filed.
By order of the Public Utilities Commission of New
Hampshire this first day of December, 1998.
Douglas L. Patch Susan S. Geiger Nancy Brockway
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary