“No supportable basis for optimism” and “ever higher costs”: PUC Staff calls out PSNH’s failed business model

Jun 10, 2013 by  | Bio |  Leave a Comment

This past Friday, staff from the New Hampshire Public Utilities Commission and The Liberty Consulting Group issued the results of their investigation (PDF) into the impacts of PSNH’s failing business model and “ever higher costs” to consumers. The Union Leader and NHPR were quick to quote the report’s damning conclusion:

In summary, the situation looks to worsen, as continuing migration from PSNH’s default service by customers causes an upward rate trend. We find no supportable basis for optimism that future market conditions will reverse this unsustainable trend, especially in the near term. To the contrary, the PSNH fossil units face uncertainties that combine to create a risk of further, potentially substantial increases in costs.

This underlines the benefits of abandoning PSNH’s residential energy service, noting that “PSNH’s default service rate has exceeded [competitive supplier] rates since mid-2009.” As PSNH itself stated in a filing before the NH Supreme Court in May, PSNH energy service ratepayers “have the legal right and ability to avoid payment of PSNH’s default energy service rate entirely by buying their electricity from a competitive electric power supplier.” The PUC staff’s report serves as a call to action for New Hampshire consumers to save money, protect their finances, and improve the environment by buying energy from lower cost and more efficient energy suppliers.

PSNH’s only public response to the report thus far has been to cite the dispatch of their coal units during extreme temperature events this year as evidence that the plants are necessary “insurance” against natural gas price increases. The report itself contradicts this, however, noting that even at this year’s levels of natural gas price spike frequency and severity in New England (due to a cold winter and a late spring heat wave two weeks ago), natural gas price fluctuations “have not served to give the PSNH fossil units enough of a boost to overcome their negative value,” and that PSNH has not offered any data or analysis to rebut this finding. That is, even with the extreme peaks of electric demand felt in the past year requiring their use more often than in the past few years, PSNH’s fossil fuel fired power units still lose ratepayer money.

The report assesses the real financial impacts of PSNH’s past and possible future decisions to invest in their coal units rather than shut them down, and demonstrates that the ratepayer money lost if PSNH’s electricity generation is sold off will be lower than many might fear. The key points raised by the report include:

  • Even in a best case scenario, PSNH’s already above-market rates will continue to climb. The investigation calculated PSNH’s energy service rates with a myriad of possible variables, including high natural gas prices and lower coal prices (the scenario that PSNH claims will validate its economic decisions) and a migration rate lower than PSNH reported this April. In all cases, the report found that PSNH’s default energy service rate would climb still higher than their current well above market 9.54 cents per kilowatt hour rate, to 10 or 11 cents per kilowatt hour.
  • Customers continue to flee PSNH’s energy service. CLF has been reporting the steep increase in residential customers rejecting PSNH’s high energy service rates for a while now. We’ve also noted that most large commercial customers had migrated away from PSNH years ago. The combination of these two trends led to the report this May that migration across all customers reached half of PSNH’s total load as of the end of April.
  • The full cost of the Scrubber Project has yet to be felt by ratepayers. PSNH has started recovering the cost of the ill-founded scrubber installation at Merrimack Station to the tune of 0.98 cents per kilowatt hour on a temporary basis. The report estimates that full recovery of the scrubber’s cost would nearly double that amount, to 1.8 cents per kilowatt hour added to ratepayers’ bills. This, of course, is a cost that competitive energy service providers don’t have to deal with.
  • Looming environmental compliance projects as Scrubber redux? PSNH is currently waiting for its new final permit from EPA for cooling water withdrawal and discharge at Merrimack Station. The final permit is likely to require cooling water intake structures (like those constructed at Brayton Point Station in MA), at a price tag of $111 million or more, in addition to other protections for water quality and wildlife. Costs associated with new or impending air quality requirements would require additional compliance at significant cost, and these estimates don’t even take into account the risk posed by CLF’s ongoing Clean Air Act citizen suit.
  • Potential ratepayer costs from divestment of PSNH’s electricity generation would be minimal. If PSNH’s generating assets are sold, New Hampshire state law allows PSNH to recover from ratepayers costs that are not covered by sale proceeds (“stranded costs”). The report roughly estimates that potential energy service rate increases to cover stranded costs would be no more than 0.9 cents per kilowatt hour and possibly much less, given the high value of PSNH’s hydro generation units.

The report ultimately recommends that the PUC initiate a proceeding to solicit formal feedback on the report and its conclusions. This proceeding would likely result in firmer value estimates for PSNH’s assets, interim steps that could be accomplished through the PUC’s existing authority, and more detailed recommendations for legislation.

As CLF and the Empower NH coalition have repeatedly noted, promoting and advancing competition in New Hampshire’s energy service markets yields only benefits for the state’s electricity ratepayers in the face of PSNH’s “ever higher costs” to ratepayers. While the PUC and the Legislature decide how to implement the recommendations of this report, ratepayers should continue to vote with their feet and leave PSNH’s energy service.

Energy: Out with the Dirty, In with the Clean

Apr 23, 2013 by  | Bio |  2 Comment »

Come join Conservation Law Foundation and our allies THIS SATURDAY in Burlington, Vermont for a discussion on Vermont’s Energy Choices.

Vermont’s Energy Choices: Old Dirty Problems and Clean Energy Solutions
Saturday, April 27th, 1:30 PM at the Billings Auditorium at UVM in Burlington

The time is NOW to move away from dirty sources of energy such as tar sands, nuclear, oil and coal. Solutions are available now to move us away from expensive, dangerous and polluting energy.

Come hear national and international experts on the problems of dirty energy – from fracking to tar sands – and  the real-world successes of renewable power – including community based renewable power in Europe.

Throwing up our hands is not an option. Come find out how to make a clean energy future our reality.

You can sign up and more information here:  See you Saturday!

Going to Church in the Senate: The Ministry of Responding to Climate Change

Mar 25, 2013 by  | Bio |  6 Comment »

Senator Sheldon Whitehouse has made a number of passionate speeches throughout the week regarding climate change impacts and the dire need to address climate change. He is establishing himself as a courageous leader on the single most important issue facing this country – the reality of a changing climate and our moral, economic, and human obligation to respond to the threat we continue to blindly build. He will not let his colleagues (or the country) forget the seriousness of this issue and the need to respond to it.

Interestingly and importantly, this past week, Senator Whitehouse spoke with strong references to Pope Francis and his call to Catholics to care for Creation – a connection we rarely hear in the Senate. In fact, a more common theme these days, among congressmen and clergymen alike, has been to invoke the Bible to justify a do-nothing approach to climate change, arguing that the idea that we can irreparably harm our environment runs contrary to scripture.

As a Roman Catholic myself, I can confidently say that the Church’s call to advance social justice on the one hand (i.e., protecting the poor, caring for the Earth and its creatures) and protect human life (i.e., opposing abortion, birth control, etc..) on the other hand, creates a conflict for voters that has often been exploited and manipulated by the dominant political parties in the United States. Indeed, there even have been a number of masses I have attended during election years past when I have been made to feel that a candidate’s position on abortion is the only deciding factor when voting. This isn’t because the Church asked me to vote one way or the other, but it was because “life” was only viewed through the single issue of abortion, and not the global lense that would allow one to consider the disproportionate impact that our continued reliance on fossil fuels, and our steadfast refusal to respond to climate change is already having on the poorest of the poor and on Earth’s natural systems.

I hope that by choosing the name Francis, our new Pope has done more than signal a concern for the poor and the environment. I hope that by choosing this name, and by being a former student and teacher of chemistry, Pope Francis’ mission will be to remind Catholics everywhere that they can believe in the science of climate change, advocate for the protection of all creation, and for social justice and the poor, and still be a good Catholic. Indeed, without such advocacy “justice will be unachievable.” http://conservation.catholic.org/u_s_bishops.htm

St. Francis of Assisi preached the duty of men to protect and enjoy nature as both the stewards of God’s creation and as creatures ourselves. On November 29, 1979, Pope John Paul II declared St. Francis to be the Patron of Ecology. During the World Environment Day 1982, Pope John Paul II said that St. Francis’ love and care for creation was a challenge for contemporary Catholics and a reminder “not to behave like dissident predators where nature is concerned, but to assume responsibility for it, taking all care so that everything stays healthy and integrated, so as to offer a welcoming and friendly environment even to those who succeed us.”

It would be truly inspirational if the Church would begin to pray during its Prayers of the Faithful that our political leaders make the right choices when it comes to caring for our natural world; and then, perhaps, Catholics would learn as much about the ministry of our new Pope during mass as they might from the Senate floor.

Public Hearing: Gas Pipeline Expansion

Mar 19, 2013 by  | Bio |  1 Comment »

The Vermont Public Service Board will be holding a public hearing on the proposed expansion of Vermont Gas facilities.

Vermont Gas Systems Expansion

Thursday evening, March 21, 2013

7:00 p.m 

Champlain Valley Union High School in Hinesburg, Vermont

At a time when climate change is upon us we must think carefully about putting in place new fossil fuel systems that will be around for a very long time. Keeping us hooked on fossil fuels for many years is a bad idea.

The Board will be considering the proposed route, which runs through valuable wetlands and farmland. This is the beginning of a bigger project to supply gas across Lake Champlain to New York. It also moves Vermont closer to being able to access gas supplies from fracking, which is ongoing in New York and Pennsylvania.

Come let the Board know what concerns you have. Tell the Board you want to make sure energy is used wisely and that Vermont takes steps now to reduce our addiction to fossil fuels. It is important for the Public Service Board to hear from you.

Gina McCarthy: Right Choice for EPA, Bridge Builder, Wicked Big Sox Fan

Mar 4, 2013 by  | Bio |  1 Comment »

We are delighted by the news that Gina McCarthy has been nominated as Administrator the U.S. Environmental Protection Agency (EPA). Over the course of the last two decades the staff of Conservation Law Foundation has worked productively with Gina in her various roles in Massachusetts state government, during her tenure as the Commissioner of the Connecticut Department of Environmental Protection and, most recently, as Deputy EPA Administrator for Air and Radiation.

Gina is a fierce advocate for the health and welfare of our children and families. She was instrumental in the creation of the landmark nation and world-leading efforts to rein in mercury and toxics use and pollution in Massachusetts and across New England.

Gina is both a hard-nosed negotiator and a sympathetic ear always willing to listen to criticism and learn from just about anyone. Indeed, the “McCarthy Principle” of crafting regulations can best be summarized in her own words: “In nearly all cases the more people are involved in making a decision, the better the decision will be.”

Her engagement, over the years, on nearly every conceivable environmental issue, ranging from the transportation system of Greater Boston, holding her own state transportation agencies to account for their obligation to help clean up our air, to the clean-up of contaminated groundwater at the Massachusetts Military Reservation on Cape Cod to her powerful leadership in crafting the Regional Greenhouse Gas Initiative, has prepared her well for the breathtaking scope of issues that land on the EPA Administrator’s desk.

Her sincerity, humor, willingness to admit error, flashes of caustic (and often self-deprecating) wit are all qualities that disarm those who approach her, and help explain the deep loyalty of those who have worked with her directly.

At the end of the day, Gina is at heart still the same person who once served as a municipal public health agent, worrying about the families of one town in Massachusetts. But that person now has deep and essential knowledge about the complex worlds of energy, environmental and climate policy and a broad set of tools essential to meeting the powerful challenges that EPA faces in the 21st Century.”

. . . And she is wicked smart and a wicked big Red Sox fan.

Waves of Change: Who’s in Charge Here?

Jan 11, 2013 by  | Bio |  Leave a Comment

Rules work better when we all understand them, but what happens when the rules overlap or conflict with one another? And, who is in charge of implementing all these rules anyhow? When it comes to the rules of the road we all learn the same common rules during the drivers’ education course. But, what happens when it comes to the rules which manage and protect our ocean and coasts?

Ocean and coastal resources are currently managed by more than 20 federal agencies and administered through a web of more than 140 different and often conflicting laws and regulations. We use our coasts and ocean for so many things – fishing, boating, swimming, tourism, shipping, renewable energy – and there are no easy guidelines about who is in charge at any given moment, in any given spot.

Fortunately, we are on our way to making this puzzle of governance a bit easier to solve.

The National Ocean Policy directs federal agencies to coordinate management activities, implement a science-based system of decision making, support safe and sustainable access and ocean uses, respect cultural practices and maritime heritage, and increase scientific understanding of ocean, coastal and Great Lakes ecosystems.

Improving the way in which federal and state agencies work with each other and the public is a distinct goal of the National Ocean Policy. To do this, the NOP presents a set of nine priority objectives for policies and management actions and establishes a new National Ocean Council (NOC), which will be responsible for developing strategic action plans for these priority objectives and leading coordination and collaboration between federal agencies.

A well coordinated group of agencies can better serve the people they are supposed to serve, create the jobs and economic benefits we all need, help us enjoy and safeguard our waters, beaches, and wildlife for our families and our future.

Bright Energy Forecast: Saving Electricity, Reducing Pollution, Saving Money

Dec 12, 2012 by  | Bio |  Leave a Comment

For decades Conservation Law Foundation has pushed for more energy efficiency, which continues to be the lowest cost, cleanest and most reliable way to meet power needs. More energy efficiency means fewer dirty coal plants, fewer monstrous transmission lines, and more money in our pockets. We all win.

The operators of the New England Power grid, the ISO-New England, released their energy-efficiency forecast. The news is pretty remarkable.  It shows the real effect of our commitment to energy efficiency. You can read the report here.

In states like Vermont, efficiency will more than offset expected growth and allow older and dirtier supplies to step aside.

 

By comparison New Hampshire, which has not invested as much in efficiency, continues to grow its power use and continues to pay too much for ever more polluting power supplies.

In the words of the ISO New England, the energy efficiency forecast shows the states’ investment in energy efficiency is having a significant impact on electric energy consumption and peak demand. About $260 million in transmission expenses have already been deferred for New England customers. (p.23).

That’s $260 million in our pockets.

What’s also important is that these are very conservative numbers: if states like Massachusetts and Rhode Island meet their goals for helping customers to save energy and money the reductions in energy use will exceed what the ISO is presenting.

This report shows that investments in electricity efficiency are really paying off – we need to apply the lessons from that sector to other areas, like ensuring we use natural gas and oil very efficiently as well, saving customers money while reducing pollution and fuel imports.

More savings are available. Some states are not making as large investments in energy efficiency as others. New Hampshire for example is causing its citizens to experience unnecessarily high costs.

It is good to see the bright payoff from what are only the beginnings of our efficiency investments.

 

 

 

 

International Nuclear Lessons

Jul 27, 2012 by  | Bio |  1 Comment »

Environmental issues span the globe. When it comes to nuclear power, global action is needed. That’s why it was a privilege for CLF advocates to meet with a number of environmental lawyers from Japan, many of whom are members of the Japan Environmental Lawyers Federation.

The tragedy of Fukushima shows the need for the US to stop giving nuclear power a free pass. Just yesterday another mishap at the accident-prone Vermont Yankee facility resulted in the draining of some of the radioactive cooling water. Enough already.

Our conversation addressed how environmental groups operate. We also touched on some of the litigation tools available to protect our environment from the risks of nuclear power – from problems with the storage of waste, the possibilities of accidents, and the economic problems that nuclear power creates.

Our colleagues in Japan have a far keener sense of how important this work is. As different as our legal systems are, it was interesting to find the similarities as well, including how challenging it is to navigate the interplay of state or local government oversight with federal regulations.

The attorneys shared with CLF MA advocate Jenny Rushlow that most Japanese attorneys interested in practicing environmental law are only able to dedicate a small percentage of their time to environmental cases, as it is difficult to find compensation for that work. As a result, the attorneys we met with mostly take on environmental cases on a volunteer basis. The group reported on a number of high impact cases, including a current lawsuit aimed at classifying carbon dioxide as a pollutant, much like the Massachusetts v. EPA case.

Energy Efficiency: A Regional Legacy of Transformation

Jul 12, 2012 by  | Bio |  Leave a Comment

photo courtesy of Department of Energy @ flickr.com

In the past 25 years, our lives have become increasingly “plugged in.” We have an ever-increasing number of devices in our lives, our homes, and our offices that use electricity. What is amazing is that with our foresight and work during this same time period, our region now uses energy efficiently more than ever – reducing pollution, saving money, growing jobs, and cutting through partisan politics to succeed.

That’s a regional legacy to be proud of and one highlighted in the recent op-ed co-authored by former CLF President Douglas Foy. 

With the publication of “Power to Spare”  in 1987, CLF and others set forth the effective “out of the box” thinking that allows for reduced energy consumption while increasing economic growth. As the op-ed recounts:

“Our proposition was unique: To shift incentives that encouraged utilities to sell more power, to a new model that would reward them for promoting conservation. By putting efficiency on a level playing field with coal, gas, oil and nuclear, we would be able to lower demand, cut consumption, decrease total use and reduce pollution. We promised to boost the local economy at the same time through the job intensive investments in efficiency and by reaping the economic benefits of lower energy costs.”

And it’s been a success that continues.

Massachusetts passed the “Green Communities Act” and has grown energy efficiency jobs and lowered electric costs, with average rates for residential consumers dropping from the 4th highest to 11th highest place.

Rhode Island recently approved an aggressive efficiency budget and is expected to meet more than 100% of its anticipated load growth with energy efficiency, not through additional polluting electricity generation.

In New Hampshire, CLF Ventures recently managed a statewide project helping communities throughout the state identify ways to reduce energy consumption and costs through greater efficiency.

Vermont has its own efficiency utility that works statewide providing one-stop-shopping for businesses and residents to reduce costs and energy use with a budget designed to achieve over 2% annual savings.

Maine now has an independent energy efficiency authority which, in 2011, obtained state-wide energy savings equivalent to the output of a 110MW power plant by obtaining $3 of savings for every $1 invested by the program.

The transformation begun 25 years ago – that we are all a part of – continues. It provides a model for the country, and a model for further action to tackle climate change.