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Little support on oversight committee to force PSNH to sell fossil fuel power plants

State House Bureau

August 28. 2013 10:07PM

PSNH's Schiller Station in Portsmouth generates 150 megawatts of power in three boilers. Two burn coal or oil, the third burns wood chips. (PSNH photo)

CONCORD — Forcing the state's largest electric utility to sell its fossil fuel-burning power plants had scant support at a legislative oversight committee meeting Wednesday.

While several members of the Electric Utility Restructuring Oversight Committee believe forcing Public Service of New Hampshire to sell its four fossil fuel plants is an option, no one wants to move forward anytime soon.

"Divestiture has to be explored but it has to be entered into cautiously," said Sen. Jeb Bradley, R-Wolfeboro, one of the architects of the state's electric deregulation legislation, "but I'm not ready to go there now."

The committee is deciding what action — if any — lawmakers should take to help lower rates for Public Service power customers, who pay the highest rates in New England for their electricity.

Bradley and several other committee members said state regulators will decide within a year how much Public Service's electric customers will have to pay for the new $430 million emission scrubber at the Merrimack Station coal-fired power plant in Bow. (See story above.)While regulators make their decision, customers are paying about 1 cent a kilowatt hour — and could pay as much as 3 cents per kwh — for the scrubber, which began operating about two years ago.

Public Service is the only electric utility in New England that owns its own generating plants. The company was set to auction its fossil fuel plants and had sold its hydro facilities and the Seabrook Station nuclear plant when the 2000-2001 California energy crisis prompted lawmakers to decide PSNH could retain its generating facilities.

But today, low natural gas prices have reduced the cost of electricity below what PSNH can produce it for, which has allowed competitive suppliers to enter the residential and small business market. Large electric users have had a competitive market for some time; almost all buy their power from competitive suppliers.

Today, about 55 percent of the electricity used by PSNH's customers is supplied by its competitors.

At Wednesday's meeting, a number of committee members said there are too many unknowns and not enough information to make a decision on whether to move forward with divestiture.

Several agreed one option is to do nothing right now and see what the PUC decides on scrubber costs and default service rates for residential and small business customers in January.

"The default service price is why we are all here today," Bradley said.

Rep. Mary Beth Walz, D-Bow, noted over the last 30 years the legislature has not made good decisions — such as forcing the sale of Seabrook and mandating the scrubber at the Bow plant.

"When the legislature tries to micro-manage," she said, "I'm not sure they do the right thing."

But she noted she is not sure lawmakers can continue to let things continue the way they are now.

Several committee members were concerned a totally deregulated market may not be sustainable if future power generation is dependent on investors building new power plants. Some questioned how the closing of Vermont Yankee nuclear power plant next year would affect the future of New England's power grid.

"I do not believe we have enough answers to proceed," said Rep. Jacqueline Cali-Pitts, D-Portsmouth. "We're putting the cart before the horse."

The committee developed a list of questions members need answered before making any decisions. The next meeting of the oversight committee will be Oct. 2 at 10 a.m. in the Legislative Office Building.

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