The New Hampshire Public Utilities Commission (PUC) has issued preliminary guidelines for a pilot program to examine the implications of retail competition in the electric industry. The guidelines, which respond to a state law mandating creation of a retail competition pilot, propose opening 3 percent of each electric utility's peak load to competitive suppliers of electric power. The load subject to the program would total 60 megawatts statewide and would be allocated proportionately among all customer classes, including residential customers.
To "move the pilot forward," the PUC proposed an even split of stranded costs between participating customers and shareholders. Full recovery was deemed unjustified inasmuch as utilities are free to seek rates of return that reflect the risk of competition and uneconomic investment. Further, the PUC found that full recovery was "incompatible with a transition to competitive markets" and could increase the delivered price of power above market levels, making the pilot's success unlikely.
The preliminary guidelines assert that the PUC has the legal authority to set rates, terms, and conditions for use of the intrastate transmission and distribution system necessary to effectuate retail wheeling. Re Retail Competition Pilot Program, DR 95-250 (Report and Preliminary Guidelines), Oct. 9, 1995 (N.H.P.U.C.).
In a separate order, the PUC declared that federal law does not preempt a 1979 state law that allows small qualifying facilities (5 megawatts or less) to sell power directly to end users, with transmission service provided by franchised utilities. Re Cabletron Systems, DR-95-095, Order No. 21,850, Oct. 3, 1995 (N.H.P.U.C.).).