“To be paid like a judge, one must act like a judge.”
In re ex parte legislative chatter about default energy service
Members of the Public Utilities Commission are supposed to act like judges.
That’s not me talking — it’s the New Hampshire Supreme Court, from a 1982 decision. See Appeal of Public Service Company of New Hampshire, 122 N.H. 1062, 1074-75 (1982). Noting that the General Court had recently raised the salaries of PUC commissioners to make their pay equal to that of Superior Court judges, the justices in that now-ancient case rather testily observed: “To be paid like a judge, one must act like a judge.” In particular, the Court admonished the utility regulators that “ex parte communications or public comment . . . about pending cases are clear violations of the standard of conduct expected of a commissioner.”1
That was then, and this is now. Back then, the big controversy had to do with Seabrook Station, the nuclear facility that was then still eight years away from completion and six years away from triggering the bankruptcy of Public Service Company of New Hampshire (and the subsequent bankruptcy of the New Hampshire Electric Cooperative).
Now, the issue of the day is default energy service — the supposedly ‘backstop’ source of energy for people who rely on their utility, and not a competitive supplier or a community power aggregation program, for electricity. There are at least two open and pending cases at the PUC that concern themselves with how the utilities (which no longer own generation) acquire default power at wholesale, and how they set the retail price of default service. The outcome of these cases is of paramount importance to the Community Power Coalition of New Hampshire (CPCNH), which serves 190,000 Granite Staters despite ongoing financial woes that have forced it to adopt rates that are significantly more expensive than the default service rates now available from our investor-owned electric utilities (Eversource, Unitil, and Liberty).
CPCNH thought it was home free when the House of Representatives adopted House Bill 1733 on March 5 by voice vote, in the wake of a unanimous “ought to pass” recommendation from the House Committee on Science, Technology & Energy (ST&E). HB 1733 would require utilities to buy their default service via fixed-price six-month wholesale contracts — no more messing around in the volatile “spot” market for electricity — and it would forbid the utilities from collecting any retail shortfalls associated with default energy service via so-called “nonbypassable” charges imposed on everyone, including customers buying their energy from CPCNH. Thus would be eliminated the avenues by which utilities compete with CPCNH and other non-utility suppliers on price, effectively restoring default energy service to its originally intended purpose as a mere backstop option for those unable or unwilling to shop elsewhere.
Then the Senate took up HB 1733, which came before the Committee on Energy and Natural Resources for hearing on March 24. And, suddenly, everything had changed. There was the Chairman of ST&E, Rep. Michael Vose of Epping, and the lead sponsor of HB 1733, Rep. Michael Harrington of Strafford, urging their Senate colleagues to put the bill on ice. What happened?
“In the interim I personally had conversations with two PUC commissioners who have convinced me that some of the language in the bill as it exists today is not necessarily advantageous to the state,” Chairman Vose testified. He noted that the PUC objects, in particular, to the requirement for “fixed price” wholesale contracts in most circumstances. “They think that takes away a potentially valuable tool for us to use to lower electricity rates,” said the ST&E Chairman.
Representative Harrington — himself a former member of the PUC — also fessed up, unabashedly. “I had pages of e-mails from a PUC commissioner and pages of e-mail from community power people, all advocating good positions [and] all coming to a different conclusion,” he told the Senate hearing.
To be clear, the issue is not members of the PUC — which presently consists of newly confirmed Chairman Christopher Ellms, Jr. and Commissioners Pradip Chattopadhyay and Mark Dell’Orfano — expressing opinions about pending legislation. The issue is ex parte comments on issues before them in pending cases — including, here, pending cases involving how and when to procure default energy service, how to price default energy service (which, when procured in whole or in part via the spot market, must be priced at least somewhat based on projections, because those retail prices are currently fixed for six-month periods), and what to do when retail revenue does not cover wholesale costs.
And let me also be clear: No criticism is intended here of either Chairman Vose or Representative Harrington. They’re legislators, not the ex parte police. They can take calls from, or read e-mails from, anyone they want. Heck, they even talk to me from time to time.
Hobbled as I am by my legal training, plus five years as a judicial law clerk, plus a stint as the general counsel of the PUC, I am something of an absolutist when it comes to ex parte conversations involving utility regulators. You never see (or hear about) any of the state’s judges weighing in on pending legislation (beyond bills concerning the actual administration of the judicial branch) and I think our quasi-judicial utility regulators should follow this example. Imagine filing a negligence action, or a products liability case, or an antitrust suit, or a medical malpractice claim in Superior Court only to hear the judge presiding over your case testifying on some bill involving negligence, products liability, antitrust law, or medical malpractice! As the state’s ratepayer advocate, I ask: Why should it be any different for those who judge our utility cases?
At the risk of engendering boredom, but in the hope of inoculating myself from some of the complaints this post might engender — let me add a bit more nuance to the discussion. The two pending cases to which I am referring are DE 25-030 (involving Liberty) and DE 25-032 (involving Unitil).2 Having only taken office on March 16, Chairman Ellms has not yet participated in either case and he may yet decide to disqualify himself. Until assuming his current job, Chairman Ellms was Deputy Commissioner of the Department of Energy, a party to every case of significance at the PUC. That, in itself, is more than enough to require him to abstain from participating in all such cases that were pending prior to his resignation from the Department.
When the General Court created the Department of Energy in 2021, largely out of what used to be the staff of the PUC, the idea was that the Department would be the policy shop and the PUC would be the impartial court-like decisionmaker. Somehow the roles got flipped during the tenure of former PUC Chairman Daniel Goldner, who was not shy about making his policy views known to the General Court while the Department was chronically neutral on pending bills. Now that Chairman Ellms has replaced Chairman Goldner, the worry becomes: Are relations between the Department and the PUC too cozy? Remember, since the Department of Energy is a party to every major PUC case, the ex parte rules definitely preclude Chairman Ellms from idle chatter with his former colleagues at the Department.
With that in mind, consider what Joshua Elliott, the Department’s Director of Policy and Programs, had to say at the Senate hearing of March 24 on HB 1733. Though his House testimony on HB 1733 stolidly proclaimed the Department’s characteristic neutrality, suddenly at the Senate he put the Department firmly in the “opposed” category, promising that his agency is working on a new approach to the default energy service problem “where you can have your cake and eat it too,” by which he meant low rates and a new approach to pricing that is fair to non-utility suppliers (including CPCNH).
Okay. But what’s bothering me is what Elliott offered as a final aside. “I did speak to the Chairman prior to coming here,” he told the Senators. “If there are any questions for the commission I’d be happy to facilitate that.” The Department of Energy should not be facilitating discussions between legislators and PUC commissioners, and Chairman Ellms should be more careful about what he discusses with his former colleagues.
None of the above is calculated to endear me to either the Department of Energy or the Public Utilities Commission. I am sorry about that, since as Consumer Advocate I am trying to replace frosty relations with meaningful collaboration between my office and the Department — and, of course, I should be trying to capture the PUC (on behalf of residential utility customers) rather than antagonizing it. In my dream version of New Hampshire, some enterprising journalist would be writing about this stuff, using the same hearing videos I reviewed. But this is the real New Hampshire, and somebody has to bring these concerns to the attention of the public.
As the Court noted in 1982, that standard of conduct is enshrined in statute — see RSA 363:12. The statute does not merely preclude ex parte communications about pending cases (“ex parte” referring to conversations about cases without notice and opportunity to participate given to all parties). It also requires a PUC Commissioner to “disquality himself from proceedings in which his impartiality might reasonably be questioned.”
“I think OF THEM like this.”
Adjudicative. Damn spell check…