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Report: "Loyal" PSNH Customers Pay More, Those Who Switch Offered Lower PSNH Rate
July 07,2014 The Manchester Union Leader reports that New Hampshire PUC Staff and the Office of Consumer Advocate are recommending that Public Service Company of New Hampshire's pilot alternative default service rate be terminated, because "loyal" customers are paying a higher default service rate than those returning from competitive supply. While the Union Leader discusses parties' frustration with the rate not working as intended, this result was nothing but expected, since returning customers on alternative default service pay only marginal cost plus a share of scrubber costs (but not other PSNH fixed bypassable costs) As was previously noted by Commissioner Michael Harrington in a dissent from the PUC's approval of the alternative default service rate (Rate ADE), "what the ADE rate offers customers is the ability to obtain rates from PSNH that are lower than DE [standard default service] rates." "In each of the monthly reports filed by PSNH, default energy service customers are subsidizing alternative default energy customers in every month except April 2014. This means that default customers are not receiving any benefit and in fact are being harmed by the alternative default energy rate," the Union Leader quotes Staff as saying in a public filing. The "other shoe" implicated by a termination of alternative default service could be putting nonbypassable charges back on the table. Rate ADE, as well as nonbypassable charges, were among proposals to address the recovery of PSNH's fixed energy costs over a decreasing default service customer base, due to customer migration. See the Union Leader for more
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