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
On October 23, during the lunch break in the middle of a hearing at the Public Utilities Commission (PUC), I hustled down to the Market Basket in downtown Concord and purchased a box of Grape-Nuts for $3.69. Then I took the cereal box and put it on my table where the commissioners, and Eversource, could see it.
The hearing was not about breakfast food – it was about Eversource’s multi-year quest to collect an extra $4 million from small customers (including residential customers) – to correct a mistake someone at Eversource made back in early 2023.
Still, electricity and food have some things in common. Both are among life’s essentials. And, as I explained at the PUC hearing, sometimes you get a break at the checkout counter.
I offered a hypothetical. If I bought a box of cereal and paid $4, the person behind me bought the same item and got charged $6, but the correct price was $5, the grocery store cannot catch up with me a day or a week or a year later and force me to fork over the extra dollar.
Nevertheless, that’s exactly what Eversource is trying to do with respect to electricity sold to retail “default energy service” customers in 2022 and 2023. “Default energy service,” of course, is the electricity Eversource customers get if they don’t buy their energy from a competitive supplier or a municipal aggregation program.
Eversource has been obfuscating about this missing $4 ever since. At first they blamed the mass migration of customers away from default energy service that was triggered by the launch of the Community Power Coalition of New Hampshire (CPCNH).
Indeed, thanks largely to the CPCNH, Eversource lost roughly 145,000 default energy service customers between August 2022 and September of this year. But, to its credit, the CPCNH fought back, successfully arguing that Eversource’s explanation made no sense.
Thus, last year, the Commission rejected Eversource’s plan to include this money in the utility’s stranded cost recovery charge, which would have forced all customers (including those using the CPCNH for their electricity) to make Eversource whole.
Now Eversource is back with an entirely different theory – and a new plan, to force only small customers (including all of its residential customers taking default service) to pony up. This one fails the milk test.
I learned in law school that the milk test is a sure-fire method for testing the veracity of a potentially dubious proposition. Just drink a glass of milk while the proposition is being recited, and if you end up snorting the milk out your nose then the milk test has been flunked.
Given the obvious connection between milk and cereal, the milk test is appropriate for inclusion in a column arguing that electricity is not all that different from Grape-Nuts. But I digress.
The revelation Eversource served up on October 23 is that the whole fiasco basically centers on the 17 megawatt wood-burning electricity generator in Bethlehem that was purchased in early 2023 by New England Renewable Power. Owned by one of those private equity firms – Hartree Partners – the company goes by the endearing acronym “NERP.”
NERP bought the Bethlehem biomass plant after the prior owner went bankrupt. And, according to Eversource’s PUC testimony on October 23, the utility promptly managed to put the new owner on the wrong rate.
Keep in mind that the Bethlehem facility is a generation facility; it is producing electricity and selling it into the region’s wholesale electricity market. So, all NERP needs from Eversource is backup power.
Eversource has a special rate for backup power – it’s called Rate B – but someone at Eversource screwed up and put the NERP facility on the regular rate (Rate LG) applicable to big commercial users of electricity.
Eversource fixed the problem but somehow the fix did not get communicated to the separate system the utility uses for wholesale load settlement. And it’s through load settlement that Eversource settles its wholesale electricity accounts and allocates the costs to its retail customers.
Let me stress here that NERP did nothing wrong. New Hampshire’s non-utility biomass generation facilities have been controversial over the years but in this instance the new owners of the Bethlehem facility were just trying to set up their accounts with Eversource as their backup supplier of electricity.
Eversource, however, is a different story.
“This issue was not caused by the billing system,” testified Michael Dooley, Eversource’s director of billing, payments, and meter data services. “It was caused by human performance error. . . . We’ve since put controls in place to identify situations like this.”
How, you might wonder, can Eversource now claim that this power was actually used by small customers and should now be billed to them? The answer is a little thing called “reconciliation.”
Quite a few charges on your monthly electric bill are subject to periodic reconciliation, in which the utility adjust balances to be recovered from customers to reflect actual costs. Default energy service works that way, as the utility squares up its wholesale accounts.
But there are limits, thanks to Part 1 of Article 23 of our state Constitution, which says: “[R]etrospective laws are highly injurious, oppressive and unjust.” Utility rates, when approved by the PUC, have the force and effect of law.
So, it’s fine for the utility to square up its accounts every six months as default energy service rates are adjusted. But reaching back three years, to force today’s customers to make good on a colossal utility blunder, is retroactive ratemaking run riot.
After I bought my box of Grape-Nuts at Market Basket for $3.69 I went online and discovered that Hannaford was selling the same item for $4.99. Maybe Market Basket screwed up and offered me too good a deal?
If so, too bad. And for exactly the same reason, Eversource should have to eat that $4 million. Any other outcome would be highly injurious, oppressive, and unjust.