Blameworthy Characters: Three Well-Paid Electricity Titans Worth Watching

Print More

Power to the People is a column by Donald M. Kreis, New Hampshire’s Consumer Advocate. Kreis and his staff of four represent the interests of residential utility customers before the NH Public Utilities Commission and elsewhere.

By DONALD M. KREIS, Power to the People

As New Hampshire emerges from a long winter of ratepayer discontent, the hunt for blameworthy characters continues.  Here are some nominations.

Let me start by saying who is not on the list.  Although electricity prices have soared since 2021, I am not proposing that we show up at the offices of Eversource with torches and pitchforks in search of Chairman and CEO Joseph R. Nolan, Jr.

Yes, Eversource has just issued its 2023 Proxy Statement, gearing up for the company’s annual shareholders’ meeting.  And, yes, it says right there on page 61 that Nolan received almost $13 million in compensation last year.

And, yes, that’s a lot of money for someone running a business that is, in New Hampshire, a monopoly provider of an essential service – let alone one that saw a typical residential bill increase by 60 percent in one fell swoop back in August.  (Rates have since abated, slightly.)

Nolan gets off the hook because the run-up in residential electricity bills is due to increases in the price of default energy service – which is what you get if you don’t exercise your right to buy electricity from a company other than your local utility.  Eversource, which no longer owns any generation, bids out its default energy service every six months and then takes whatever the low bidder or bidders offer.

Eversource gets no mark-up on default energy service.  It simply buys the juice at wholesale and then passes the cost through to retail.  So, even though Nolan’s compensation in 2022 was double what he received in 2021, it’s just a coincidence that it happened the same year the price of default energy service also doubled.

Really!  It’s just a coincidence.  (Also Nolan got a big promotion, to CEO, in May of 2021, so he did not command a chief executive officer’s salary for all of that year.)

So, in lieu of focusing on Joe Nolan of Eversource, consider this roster of faraway corporate titans:  Joseph Dominguez, John W. Ketchum, and W. Keith Maxwell III.

Dominguez and Ketchum are the CEOs, respectively, of Constellation Energy (based in Baltimore) and NextEra Energy (headquartered in Juno Beach, Florida).  Though a complicated array of subsidiaries, those two conglomerates are the dominant producers of electricity in New England.

Constellation owns the largest generator in the whole region, Mystic Station just north of Boston.  If that sounds familiar, maybe it’s because you have seen me and many others rail against the free money (known in the relevant parlance as a “reliability must run” arrangement) dispensed to Mystic Station both this winter and next.

NextEra owns the second biggest generator in New England, our very own Seabrook Station.  No free money for Seabrook Station, at least not yet.

Still, it might be of interest to read the recent story in the Portland Press Herald mentioning that NextEra kicked in $20 million in support of a 2021 statewide referendum in Maine whose purpose was to block the NECEC transmission project (successor to the failed Northern Pass project here in New Hampshire).

Both NECEC and Northern Pass were designed to facilitate the importation of hydro power from Quebec for consumption in Massachusetts.  Who loses if Hydro Quebec succeeds in selling lots more electricity into our regional competitive wholesale market?  The owners of existing generation, like NextEra.

Note that Constellation and NextEra currently hold almost all of the contracts to provide default energy service to Eversource, Liberty, and Unitil – and at prices that are worthy of Sofa King (because they are Sofa King high).  The only exception is 12.5 percent of the Eversource default energy service load, for which the utility has a contract with Hydro-Quebec.

Dominguez hauled in $10.4 million in compensation last year, according to the Constellation proxy statement. NextEra hasn’t issued its proxy statement yet, but according to last year’s version Ketchum’s total compensation was $15.5 million.

You can, of course, avoid contributing to the lavish compensation of Messrs. Dominguez and Ketchum by spurning default energy service in favor of electricity purchased from a competitive retail supplier.  That brings us around to W. Keith Maxwell III, CEO of a Houston-based outfit known as Via Renewables.

Via Renewables is the parent company of Spark HoldCo LLC, which is the parent company of Electricity N.H. LLC, which does business here in the Granite State as ENH Power.  And ENH Power is among the most visible and aggressive retail electricity suppliers in New Hampshire.

As an example of how ENH likes to do business, consider the saga of the Eversource customer from Litchfield who signed up with the supplier two years ago.

When the customer’s February 2023 bill arrived for Eversource, it was for a whopping $687.87, up from $242.02 the previous month.  There was a slight uptick in usage for the period covered by the February bill, but not enough to account for such a run-up in monthly electricity costs.

It turns out that ENH has switched the customer from an attractive rate – 8.6 cents per kilowatt-hour – to a ridiculous one:  37 cents.  Keep in mind that Eversource’s default energy service rate actually decreased between these two billing periods, from 22.6 cents to 20.2 cents.

What happened?  It’s in the fine print (from ENH’s “Disclosure Summary,” made available to new customers when they sign up):  “Upon completion of the initial fixed price term, unless otherwise notified, this Agreement will continue on a month-to-month basis at a variable price per kWh with no cancellation fee or at a new fixed rate price as determined by ENH Power at the time of renewal.”

Did you catch the “new fixed rate price as determined by ENH Power”?  That’s how you go from 8.5 cents to 37 cents.

The fine print also says ENH will notify you at least 45 days in advance of such a change, as required by the rules of the Public Utilities Commission.  In this instance, the customer moved to Litchfield a year and a half ago, and ENH managed to send the notice to the customer’s old address in a different town.

First the customer complained to his state senator, who referred him to the consumer services division of the Department of Energy.  (You can call them too, by the way, at 1-800-852-3793.)  They reached out to ENH, which admitted no wrongdoing, claiming they billed the customer at the address supplied by the customer.  But, ENH acknowledged they did not provide a timely response to the customer’s complaint and so they refunded the customer the difference between their 37 cent rate and Eversource’s 20.2 cent rate.

Did the customer get a bill credit, as you might expect?  Nope.  ENH furnished the customer with a Visa gift card.

The ultimate boss of ENH, founder and CEO W. Keith Maxwell III down in Texas, is not paid in Visa gift cards.  His total compensation in 2021 was $2.25 million, according to the 2022 proxy statement from Via Renewables.

Worried that poor ol’ W. is not keeping pace, salary wise, with that of his counterparts at Eversource, Constellation, and NextEra?  Don’t be.  At least as of a year ago, he owned or controlled almost 66 percent of the company’s stock.

Comments are closed.