Read my lips
No retroactive ratemaking in New Hampshire!
“Highly injurious, oppressive, and unjust.” That’s how Part 1, Article 23 of the New Hampshire Constitution describes “retrospective laws,” flatly providing that “no such laws” are permissible in the Granite State. Period, full stop.
Rates approved by the Public Utilities Commission (PUC) have the force and effect of law, which means this prohibition applies to such rates. In New Hampshire, a utility may not apply its rates retroactively. Again: period, full stop.
That’s why the Office of the Consumer Advocate has just filed a rehearing motion with the PUC, asking the agency to change its mind about its recent decision to award Eversource about $1.4 million in retroactive adjustments to its default energy service charge. “Default energy service” is what you get if you are an Eversource customer in New Hampshire who does not buy electricity from a community power aggregation program or competitive energy supplier.
In the grand scheme of things, this is a small amount of money (when spread among all of the customers who would be forced to cough up this sum) and, indeed, it’s less than half of what the utility asked for. But the principle of the thing compels my office to seek rehearing and, perhaps eventually, review by the New Hampshire Supreme Court.
When the PUC made its decision last month, it called the constitutional principle at issue here, as applied to utility rates, “murky.” Thus the regulators ruled they were balancing competing interests by awarding the utility less than have of what it sought. But, unlike garden variety situations when the PUC must weigh ratepayer interests against shareholder interests in quest of rates that meet the “just and reasonable” standard, what we are dealing with here is an inexorable constitutional command.
Underlying Eversource’s request for a retroactive rate adjustment is a colossal screw-up of the sort that should be the responsibility of shareholders rather than residential customers. A large industrial customer of Eversource — by coincidence, it happens to be the biomass generation facility in Bethlehem — changed hands and somehow this led PSNH to assign a bunch of electricity, purchased at wholesale beginning in late 2022, to large customers when the energy was actually consumed by small customers (including residential customers).
That’s not how utility regulation is supposed to work! The customers should not indemnify shareholders when the shareholders’ agents — including the individual Eversource employee who apparently was responsible for the error — screw up. You have to go all the way to tab 65 of this docket page on the PUC web site and then go all the way to page 14 of the order at tab 65 to see the cursory, one-paragraph treatment this issue got from the PUC even though it was the subject of an all-day hearing in October.
This situation is especially galling because Eversource originally sought to blame the Community Power Coalition of New Hampshire (CPCN) — and the thousands of New Hampshire customers who switched from Eversource default energy service to power supplied by the Community Power Coalition — for the missing revenue. It was only when CPCNH board member Clifton Below (also a former legislator and PUC Commissioner) popped up to demonstrate the impossibility of that explanation that Eversource came up with its subsequent “oops” scenario involving the Bethlehem biomass facility.
Now it’s the PUC that has committed an “oops” — a constitutional one — but fortunately it has a chance to correct the mistake by granting the OCA’s rehearing motion.
[Frank Lloyd Wright’s Kahlil House in Manchester, N.H. No known connection to the above post about retroactive ratemaking.]