CHAPTER 21

SB 170 - FINAL VERSION

03/27/03 0888s

04/17/03 345eba

2003 SESSION

03-1138

08/09

SENATE BILL 170

AN ACT relative to Public Service of New Hampshire.

SPONSORS: Sen. Clegg, Dist 14; Sen. Green, Dist 6; Sen. Odell, Dist 8

COMMITTEE: Energy and Economic Development

ANALYSIS

This bill restricts PSNH from selling assets during the transition service period.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/27/03 0888s

04/17/03 345eba

03-1138

08/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Three

AN ACT relative to Public Service of New Hampshire.

Be it Enacted by the Senate and House of Representatives in General Court convened:

21:1 Repeal. 2000, 249:7, II as amended by 2001, 29:13, relative to the sale of PSNH assets, is repealed.

21:2 Authority to Issue Finance Orders to Finance RRB Costs. Amend RSA 369-B:3, IV(b)(1)(A) to read as follows:

(1)(A) From competition day until the completion of the sale of PSNH's ownership interests in fossil and [entitlement interests in nuclear] hydro generation assets located in New Hampshire, PSNH shall supply all, except as modified pursuant to RSA 374-F:3, V(f), transition service and default service offered in its retail electric service territory from its generation assets and, if necessary, through supplemental power purchases in a manner approved by the commission. [Once PSNH is no longer supplying transition service, to the extent applicable, any provider or providers of transition service shall have been chosen through a competitive bid process, administered by the commission, to provide such service or as determined under RSA 374-F:3, V(e). The commission may, if it finds it to be in the public interest, divide the competitive bid process into multiple categories or multiple competitive bids;] The price of such default service shall be PSNH's actual, prudent, and reasonable costs of providing such power, as approved by the commission;

21:3 Authority to Issue Finance Orders to Finance RRB Costs; Cost Reconciliation. Amend RSA 369-B:3, IV(b)(1)(D) to read as follows:

(D) Any difference between the price of transition service, exclusive of the portion attributable to the renewable energy component under RSA 374-F:3, V(f), from competition day to the day that PSNH ceases to provide transition service and PSNH's actual, prudent, and reasonable costs of providing such power as determined by the commission shall first be separated between the 2 groups of customers described in subparagraphs (b)(1)(B) and (b)(1)(C), used first to offset any differences described in subparagraph (b)(1)(B), and the net then reconciled for each group of customers either by changing the recovery end date, or by decreasing the stranded cost recovery charge, or if the recovery and date has passed, by implementing some other form of equitable reconciliation, as the commission finds to be in the public interest;

21:4 New Section; Divestiture of PSNH Assets. Amend RSA 369-B by inserting after section 3 the following new section:

369-B:3-a Divestiture of PSNH Generation Assets. The sale of PSNH fossil and hydro generation assets shall not take place before April 30, 2006. Notwithstanding RSA 374:30, subsequent to April 30, 2006, PSNH may divest its generation assets if the commission finds that it is in the economic interest of retail customers of PSNH to do so, and provides for the cost recovery of such divestiture. Prior to any divestiture of its generation assets, PSNH may modify or retire such generation assets if the commission finds that it is in the public interest of retail customers of PSNH to do so, and provides for the cost recovery of such modification or retirement.

21:5 Effect on Finance Order. The provisions of this act shall amend the specific provisions of public utilities commission Order No. 23,550, approving the issuance of rate reduction bonds, issued by the public utilities commission in Docket No. DE 99-099. All provisions of RSA 369-B, including the amendments made by this act, and all provisions of commission Order No. 23,550, as amended by this act, shall remain in full force and effect and are hereby ratified and confirmed in all respects. The provisions of this act shall not affect the validity, effectiveness, or finality of commission Order No. 23,550, or the validity of any rate reduction bonds issued thereto. The general court finds that commission Order No. 23,550, as amended by this act, satisfies all of the conditions and

requirements of RSA 369-B, as amended, including without limitation, RSA 369-B:3, IV, and is deemed to be authorized and issued pursuant to RSA 369-B, as amended, and that the implementation of such order, as amended, is in the public interest.

21:6 Report by Legislative Oversight Committee on Electric Utility Restructuring. The legislative oversight committee on electric utility restructuring established by RSA 374-F:5 shall submit a report no later than November 1, 2004, to the governor, the senate president, the speaker of the house, the senate energy and economic development committee, the house science, technology and energy committee, the state library, and the public utilities commission, recommending legislation to address the provision of transition service and default service subsequent to April 30, 2006. In preparing the report, the committee shall consider the amount and volatility of wholesale and retail electricity prices in New Hampshire and throughout New England; the viability and number of competitive electric suppliers providing service in New Hampshire and throughout New England for different customer classes; the risks, costs, and benefits associated with different options for all electric utilities' continued provision of transition service; and other policy options to promote competition, low-cost energy, and renewable power.

21:7 Effective Date. This act shall take effect upon its passage.

(Approved: April 23, 2003)

(Effective Date: April 23, 2003)