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Court Clears Way for N.H. Retail Wheeling Pilot

Fortnightly Magazine - July 15 1996

Clearing a legal challenge blocking initiation of New Hampshire's newly approved retail wheeling experiment, the New Hampshire Supreme Court has ruled that the state Public Utility Commission (PUC) has the authority to grant competing electric utility franchises. Public Service Co. of New Hampshire (PSNH), an incumbent electric utility, had argued that the PUC exceeded its authority under state law when it ruled that: 1) plans by Freedom Energy Co., an energy marketing company, to purchase power at wholesale and resell it to end users in close proximity to PSNH transmission facilities would make the company a public utility subject to regulation; and 2) PSNH's existing certificate to provide service in a defined territory in the state could be changed to a nonexclusive franchise if the PUC found that such a result would further the public interest.

According to the court, the "plain language" of state law concerning electric utility franchises authorizes and obligates the PUC to grant competing certificates when they serve the public good. Further, the PUC may never grant a competing utility franchise, regardless of the public good, that would contradict the intent of the legislature by "depriving the PUC of authority to grant franchises for the public good." Nevertheless, the court cautioned that its ruling "should not be read as expressing a point of view either on the desirability of retail competition among electric utilities . . . or on the recoverability of 'stranded costs'." Re Appeal of Public Service Co. of New Hampshire, No. 95-610, May 13, 1996 (N.H.P.U.C.).

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