PUC short circuits Eversource deal to buy power tied to Northern PassBy PAUL FEELY
New Hampshire Union Leader
March 27. 2017 9:20PM
CONCORD — The state’s Public Utilities Commission on Monday ruled against a petition filed last June by Eversource seeking approval of a proposed 20-year Power Purchase Agreement with Hydro Renewable Energy, after determining the proposal is “inconsistent with New Hampshire law.”
Eversource announced in June 2016 it had reached an agreement with HydroQuebec (HQ) guaranteeing at least 100 megawatts from the proposed Northern Pass project would be available to New Hampshire consumers at lower-than-market prices.
Eversource cited the possibility of a power purchase agreement (PPA) with HQ as one of the benefits of the controversial transmission project, that would run 192 miles from the Canadian border to Deerfield.
Under the terms of the proposed PPA, Hydro Renewable Energy would sell, and Eversource would buy, approximately 100 megawatts of on-peak electric energy delivered to Eversource’s Deerfield Substation over the proposed Northern Pass transmission line. This energy would then be resold into the ISO-New England wholesale energy market by Eversource. Under the terms of Eversource’s proposal, net gains or losses from the purchase and subsequent resale of the energy would be accounted for through the Stranded Cost Recovery Charge (SCRC) rate.
In its ruling on Monday, the Public Utilities Commission (PUC) states the proposed PPA is inconsistent with state law, specifically the Electric Utility Restructuring Statute, RSA Chapter 374-F.
The PUC ruling can be viewed below:
“The proposal before us would have Eversource purchase electrical energy for a 20-year term over a new transmission line, resell that electricity into the wholesale market, and include the net costs or benefits of its purchases and sales in its electric distribution rates, through the mechanism of the SCRC,” writes the PUC in its decision. “That proposal, however, goes against the overriding principle of restructuring, which is to harness the power of competitive markets to reduce costs to consumers by separating the functions of generation, transmission, and distribution. Allowing Eversource to use the SCRC mechanism as a ratepayer financed ’backstop’ for its proposed 20-year PPA would serve as an impermissible intermingling of a generation activity with distribution rates. We cannot approve such an arrangement under existing laws, and accordingly dismiss Eversource’s petition.”
The financial details of the PPA are confidential and redacted from the PUC filing.
If approved, Northern Pass would bring a little more than 1,000 megawatts of electricity into the New England power grid. New Hampshire accounts for about 10 percent of the power used in New England, which is how negotiators arrived at the figure of 100 megawatts included in the power purchase agreement.