PUC endorses direct access, plant divestiture and limits on recovery of stranded costs. Says order will not interfere with 1990 bankruptcy plan for Northeast Utilities. The New Hampshire Public Utilities Commission has issued its final plan for restructuring the state's electric industry, at the same time announcing what is believed to be the first formal policy decision by a state utility commission that would deny full recovery of costs left "stranded" by the transition to competition.
Released on Feb. 28, the 125-page decision %n1%n is accompanied by a separate document of equal length, that presents the commission's analysis of its legal authority to limit stranded-cost recovery and effect other aspects of restructuring.
In substance, the plan varies little from a preliminary proposal announced by the commission back in September 1996. %n2%n It essentially follows guidelines and a timetable contained in a new state law on electric restructuring enacted in May 1996. %n3%n
In the face of considerable controversy, the commission has maintained its original plan to limit recovery of stranded investment by tying recovery to a benchmark based on regional average electric rates for New England utilities. It also has denied claims by Northeast Utilities that the restructuring policy will conflict with a bankruptcy rate plan agreed to by Public Service Co. of New Hampshire and Northeast Utilities back in 1990 (see sidebar). That agreement %n4%n had been approved by both the commission and the Federal Bankruptcy Court and had served as a foundation for the purchase of PSNH and its Seabrook investment by Northeast Utilities, a regional utility holding company.
The decision announces many other key policies, including: