PUC rejects Unitil's cost-shifting proposal
The New Hampshire Public Utilities Commission (PUC) rejected Unitil's proposal to recover nearly $700,000 in default energy supply costs by adding them to its Stranded Cost Charge, a fee paid by all electric distribution customers.
In a May 20 decision, the PUC instead reaffirmed a long-standing policy that utility supply costs must be recovered through default service rates, not distribution charges.
The Community Power Coalition of New Hampshire (CPCNH) applauded the decision, calling it a 'win for fairness, customer choice, and the integrity of New Hampshire's competitive energy market.'
'New Hampshire residents and businesses deserve a level playing field, transparent rate structures, and the freedom to choose better energy options,' said Deana Dennis, director of Regulatory & Legislative Affairs at CPCNH. 'The Commission's decision ensures that utilities cannot offload supply losses onto customers of Community Power and competitive supply through hidden delivery charges.'
In a statement, Unitil said default service 'serves an important role for customers.'
'It's a stable, protected option that customers can rely on if they don't, or can't, choose a third-party supplier,' Unitil said. 'Our proposal aimed to recover costs in a way that reflects the value this service provides to all customers. However, we respect the Commission's decision and remain committed to working collaboratively with regulators, stakeholders, and communities to meet customers' evolving energy needs.'
The PUC found Unitil's proposed accounting treatment inconsistent with standard ratemaking principles and existing precedent, including the principle that those who create costs should pay for them.
The decision comes amid scrutiny of New Hampshire's default energy service procurement structure. Earlier this spring, the PUC approved changes that allow all three of New Hamshire's investor-owned utilities — including Unitil — to increase the portion of their default energy service procured through short-term spot market purchases to 50% for residential and small business customers.
CPCNH provided testimony in the case, including analysis from Clifton C. Below, chair of its Regulatory & Legislative Affairs Committee, who identified anomalies in Unitil's reported data — signaling errors in the company's billing and load settlement systems.
The anomalies were similar to flaws that Below uncovered in the Eversource $6.5 million cost-shifting case, where the PUC also acted to maintain the status quo and defer consideration of what to do with the Eversource under- collection to later this summer.
'It should never be acceptable for utilities to lowball their default service rates, lose money, and then socialize those losses across all customers — especially those who made other energy supply choices,' said Dennis. 'This decision helps preserve a competitive market that delivers greater transparency in electric rates and empowers customers and local communities.'
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