By William Opalka
Eversource Energy will sell its New Hampshire power plants to satisfy regulators’ divestiture demands and resolve a long-standing dispute over how much it should recover from ratepayers for pollution controls on its largest coal-fired generator.
Under an agreement announced Thursday, Eversource’s subsidiary, formerly “Public Service of New Hampshire,” will seek to sell three fossil fuel plants and nine hydroelectric stations, exiting the power generation market in the state. Eversource said it will join the state’s other utilities in purchasing energy on the open market.
Legislation enacted last year directed the state Public Utilities Commission to investigate ways to expedite the company’s sale of its electric generation as a means to develop energy markets and save consumers money.
An April report by the PUC said that the plants had a book value of $660 million but could only expect to bring in $225 million in any sale.
Eversource and state negotiators said the agreement will save consumers $300 million over the next five years due to securitization of those stranded costs. Realizing the savings will require legislation approving low-cost bond financing.
The settlement also resolves the long-standing issue over pollution upgrades made to the 439-MW Merrimack Station in Bow. Eversource agreed to forgo recovery of $25 million of the $422 million it spent on a scrubber on the 55-year-old generator.
The PUC in 2011 authorized a temporary charge of $0.98/kWh while the case remained on its docket, but the charge was insufficient to cover the entire cost of the scrubber. The PUC late last year was prepared to enter an order determining how the costs would finally be split when legislators and the company requested a delay to continue negotiations. The PUC agreed to the delay but denied a PSNH request to stay the divestiture proceeding.
“This agreement represents an opportunity to create real savings for PSNH customers, avoids protracted litigation with uncertain outcomes for all parties and moves the operation of PSNH generating plants to competitive markets rather than remaining an ongoing ratepayer obligation,” said Senate Majority Leader Jeb Bradley, who led the negotiations with the company.
In addition to Merrimack, the sale includes the 400-MW oil-gas Newington Station, built in 1974, and the 63-year-old 150-MW Schiller Station in Portsmouth, which burns coal, oil and biomass. The nine hydroelectric plants total 69 MW.
The agreement also includes a freeze on distribution rates through July 2017, and requires the plant buyers to honor current collective bargaining agreements and to keep the plants in operation for 18 months.
The agreement also calls for three years of property tax stabilization payments if a plant sells for less than its assessed value.
Eversource shareholders will also provide $5 million to capitalize a clean energy fund, which will target investments in energy efficiency and distributed generation projects.
The deal disappointed the New Hampshire Sierra Club, which sought the closure of Merrimack. Marc Brown, president of the New England Ratepayers Association, said he feared savings from the plants’ sale would be short-lived and that prices will rise as the state becomes more reliant on natural gas-fired generation.