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New Legislature should not buy PSNH’s gimmicks |

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My campaign for Executive Councilor drew me into issues in addition to education so I will post sometimes on some of those and an opinion piece in Sunday’s Portsmouth Herald – New Legislature should not buy PSNH’s gimmicks – seems particularly important.  The role of PSNH and electricity rates is particularly important in New Hampshire.  But it’s complicated, so many of us probably glaze over.  That’s why I would like to call people’s attention to this very clear and grounded overview of the situation with PSNH.  It is an accurate and understandable framework for understanding the PSNH rate increase proposals.  It is similar to the views expressed by Merideth Hatfield when she was New Hampshire’s Consumer Advocate.  Here’s a sample:

Nearly a decade after New Hampshire decided to insulate Public Service Company of New Hampshire and its generations-old power plants from the region’s emerging competitive market for electricity, that choice — whatever its merits at the time — has left the state in a quiet crisis of escalating electricity costs for the homeowners and small businesses that today buy their power from PSNH.

How our new governor, new Legislature and state regulators address this challenge — and whether or not they reject PSNH’s attempts to protect its favorable treatment to the detriment of New Hampshire’s innovation economy and its most vulnerable residents — will be a critical part of their legacy.

In a few short weeks, PSNH’s energy service rate is expected to climb to over 9.5 cents per kilowatt hour. All of New Hampshire’s other electric utilities are charging 7.5 cents or less. PSNH’s rates are rising to cover the costs of its aged power plants, especially its large coal and oil-fired power plants, plus a nearly 10 percent rate of return. In 2013, PSNH will likely seek even higher rates to recover the full costs of the $422 million scrubber at its largest power plant, Merrimack Station in Bow. This plant operated less than one-third of the time during the first three quarters of 2012; its higher-than-market costs prevented it from being called upon by New England’s electricity grid. PSNH’s power plants have operated less and less over the last several years due to their high costs. Unfortunately, PSNH customers must pay not only for the replacement power that PSNH gets from other, cheaper generators, but also for the fixed costs of PSNH’s idle plants — such as the cost of the scrubber.

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