DR 98-012
Granite State Electric Company
Retail Restructuring: Offer of Settlement
Order Approving Interim Low Income Assistance Program
O R D E R N O. 23,102
January 11, 1999
APPEARANCES: Carlos Gavilondo, Esq., for Granite State
Electric Company; Wynn E. Arnold, Esq., Asst. Attorney General,
for the Governor's Office of Energy and Community Services; Alan
Linder, Esq., for N.H. Legal Assistance; Kenneth Traum for the
Office of Consumer Advocate; and Robert J. Frank, Esq., for the
Staff of the New Hampshire Public Utilities Commission.
This Order approves an Interim Low Income Assistance
Program (Interim Program) for retail customers of Granite State
Electric Company (GSEC). The Interim Program will provide rate
discounts of approximately 25% to eligible low income customers
of GSEC and will remain in place until the Commission approves a
Statewide low income assistance program.
I. PROCEDURAL HISTORY
In Order No. 23,041 (October 7, 1998), the Commission
approved, with certain conditions, a settlement proposal relating
to GSEC's compliance obligations under the State's electric
utility restructuring law, RSA 374-F. One condition imposed by
the Commission required GSEC to propose an "interim" low income
assistance program to remain effective until the Commission
implements a Statewide program. See, Order No. 23,041 at 63.
On November 2, 1998, GSEC filed its proposed Interim
Program with supporting testimony and exhibits. The Commission
Staff filed testimony on December 4, 1998. On December 7, 1998,
the Commission held a hearing to address GSEC's filing and the
issues raised by Staff.
II. POSITIONS OF THE PARTIES AND STAFF
A. GSEC'S Proposed Interim Program
GSEC states that the primary objective of the Interim
Program is to provide low income customers with rate relief as
soon as possible and with minimal administrative burden.
According to GSEC, it is inappropriate to develop and implement a
complex administrative infrastructure for a program that will be
temporary. GSEC also contends that the Interim Program should be
self-sustaining and fully reconciling; in other words, the costs
of the Interim program should be paid solely from collections
under the Systems Benefit Charge, and any over- or under-
collections should be reflected in the Systems Benefit Charge for
the subsequent period.
GSEC's original Interim Program proposal was designed
to reduce the total bills for eligible customers by 25% through
discounted distribution rates. However, GSEC modified its
proposal during the hearing to address issues raised in Staff's
testimony such that eligible customers would receive discounted
customer charges (in addition to discounted distribution rates)
to produce overall bill discounts at the 25% level.
GSEC asserts that a 25% overall discount "will provide
[GSEC's] participating low income customers with a meaningful
level of rate relief...and also appears supported by empirical
data from low income programs offered by [GSEC's] affiliates in
Massachusetts and Rhode Island." Exhibit 59 at 18. In addition,
GSEC notes that 25% is within the range of discounts recommended
by the Low Income Working Group. In response to questions from
the Commission, GSEC stated that approval of the interim program
would not make implementation of the burden-based program
approved in Docket No. 96-150 more difficult.
B. Staff
Prior to the hearing, Staff filed direct testimony of
Tracy Guyette, Staff Economist. According to Ms. Guyette, GSEC's
original proposal was deficient in several respects. She argued
that GSEC should reduce customer charges as a means of
discounting bills rather than relying exclusively on discounted
distribution charges. GSEC's original proposal would create an
incentive on the part of customers to increase electricity
consumption because "the percent discount off the total bill
increases with consumption." Exhibit 69 at 2.
Ms. Guyette also contended that GSEC's proposal would
create a "negative charge" or credit for consumption with respect
to at least one distribution rate schedule, a result which she
characterized as "inappropriate rate-making.". Id.
Ms. Guyette further recommended that GSEC should not
discount the first 250 kWh block of Residential Rate D
distribution rates because that block of usage is already
discounted through lifeline rate design. Finally, Ms. Guyette
recommended that GSEC should be required to file monthly
reconciliation reports which track spending and recovery of the
system benefit charge.
III. COMMISSION ANALYSIS
We believe that GSEC's Interim Program (as amended to
address Staff's concerns) is reasonable and consistent with the
public good and, accordingly, we approve the Program without
condition. GSEC is authorized to reduce its systems benefit
charge and make the other necessary tariff adjustments to
implement the Interim Program. Consistent with Staff's
recommendation, GSEC is also directed to submit monthly reports
that track spending and revenues associated with the systems
benefit charge.
Based upon the foregoing, it is hereby
ORDERED, that Granite State Electric Company's Interim
Low Income Assistance Program is APPROVED as set forth herein.
By order of the Public Utilities Commission of New
Hampshire this eleventh day of January, 1999.
Douglas L. Patch Susan S. Geiger Nancy Brockway
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary