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PSNH, CPD go for another round at the PUC

October 07, 2009
CONCORD — Public Service of New Hampshire and Clean Power Development continued their legal battle at the Public Utilities Commission last week. PSNH sent the PUC their first letter since June, which resulted in an immediate response from CPD, as well as a response from Concord Steam, another company involved in the case.

In its response PSNH reiterated their position that they cannot be forced to purchase power from any generation company. They also said they were considering proposals from both CPD and Concord Steam in September when CPD once again asked the PUC to investigate. They decided to stop consideration of both proposals as a result of CPD's action, they said.

CPD responded that, "PSNH's letter is detached from reality." PSNH decided not to consider CPDs proposal before the September request for an investigation, CPD said, not after, and therefore there reason for rejecting the proposal isn't valid.

Concord Steam also responded that PSNH had no reason to reject their proposal other than CPD's complaint, which shouldn't weigh against Concord Steam.

The disagreement began in April, when CPD filed a complaint with the PUC about PSNH. PSNH refused to discuss entering a purchase power agreement with CPD, according to the complaint, despite CPDs repeated attempts to negotiate.

CPDs complaint said PSNH was not treating their company fairly and went on to say that PSNH entered into a long-term agreement with Laidlaw without ever considering CPD's proposal, a violation of PSNH's requirement to consider all available options before acting in the public's interest. CPD requested the PUC investigate the matter.

PSNH responded they are not required to enter into long-term contracts with any power supplier, so they cannot be forced into an agreement with CPD.

"We are happy to review any bonafide offer," said PSNH spokesman Martin Murray. "We would not reject a proposal out of hand."

He would not comment on whether or not they considered CPD's proposal before rejecting it.

He would also not confirm whether they have a long-term contract with Laidlaw, but he did say they were trying to phase out such agreements.

"We're trying to get away from long-term purchase contracts," Mr. Murray said.

But Laidlaw said several weeks ago they are putting the finishing touches on their 20 year contract with PSNH.

"Essentially it's 98 percent done, the lawyers are just doing their thing," Lou Bravakis, Vice President of Planning and Development for Laidlaw Berlin Biopower, said.

A long-term agreement is essential for a power generation company hoping to find financing. Without one, project risks are often too high to find investors.

PSNH is not responsible for providing a secure future for independent generators, Mr. Martin said. The legislature decided to let the marketplace determine what projects succeed, he said, and PSNH works to meet customers' and the company's needs.

At the PUC, whether or not PSNH can reject a proposal without first considering its terms is not clear.

"That's kind of an open question right now," said Anne Ross, the PUC's general council, one that will be decided if the PUC decides to investigate the case. The state's other two utilities send out requests for proposals, she said, and then compare all the proposals before making a decision. PSNH is the only one that doesn't have an open procedure for awarding contracts.

PSNH doesn't work that way, Mr. Murray said, because they generate their own electricity in addition to buying it from others. He said PSNH is a special case unlike the other utilities, and therefore their rubric for making contracts is different.

PSNH does make more money selling the electricity it generates than it does selling electricity it buys from independent producers, Mr. Murray said. They make a fixed return on the investments they have made to their infrastructure of about nine and a half percent.

The CPD complaint says PSNH only will consider renewable projects PSNH can own, because they want them to be part of their infrastructure, and therefore be subject to the nine and a half percent return on investment.

Mr. Martin said PSNH tried to convince the legislature several years ago to allow PSNH to build and operate a 50 megawatt biomass plant in the North Country, but the legislature said no.

"So we stopped asking," he said. But PSNH still feels this would be in the public's best interest, he said.

Clean Power President Mel Liston said he still hoped PSNH would agree to a long-term purchase power agreement with CPD, but if they don't CPD will still move forward. They will find electricity buyers in another state, he said.

Mrs. Ross said the PUC will decide soon if they will have an investigation. If they do, it may take up to a year, she said.

"It depends on the parties and the docket," she said.

Matin Lord Osman
Salmon Press
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