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Connecticut Seeks 2,000 MW of Offshore Wind Capacity

LCG, August 22, 2019--The Connecticut Department of Energy and Environmental Protection (DEEP) on Friday released a request for proposals (RFP) for offshore wind power projects. DEEP is seeking up to 2,000 MW, as required under Public Act 19-71, An Act Concerning the Procurement of Energy Derived from Offshore Wind.

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EIA Publishes Regional Electricity Supply and Pricing Forecasts Using UPLAN Model

LCG, August 13, 2019--The U.S. Energy Information Administration (EIA) announced that it is revising the presentation and modeling of its forecasts for electricity supply and market hub pricing to better reflect current electricity markets and system operations in the U.S. Beginning with the August 2019 Short-Term Energy Outlook (STEO), the new forecasting approach models electricity markets using the UPLAN production cost optimization software developed by LCG Consulting. EIA uses the solution results provided by this proprietary model to develop the STEO forecasts of monthly electricity generation, fuel consumption, and wholesale prices.

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Industry News

Regulators Move State Closer to Electric Dereg

LCG, Sept. 6, 2000Utility regulators in New Hampshire, which has for five years been toying with electric industry restructuring, moved the state a step closer to a competitive power market yesterday by endorsing a legislation passed last spring by state lawmakers.

While no formal order was issued, the New Hampshire Public Utilities Commission approved a settlement agreement that conforms to a new law passed in May to end a four-year dispute with Public Service Co. of New Hampshire, the state's largest utility.

In 1995, the New Hampshire legislature passed a law requiring PSNH to run a pilot program to test the likely consequences of deregulation. The utility did so in 1996 and discovered that one of the consequences would be lower rates rates insufficient to allow it to recover its investments in power plants, substations, transmission lines and the rest of the electric utility infrastructure.

When state politicians started talking about rate cuts approaching 20 percent, PSNH was alarmed, and went to court to halt the process. It has been bogged down ever since.

Yesterday's regulatory action could end the stalemate at least Gov. Jeanne Shaheen thinks so. "This is an important step forward in our efforts to lower electric bills and to allow New Hampshire families and businesses to finally choose their own electric suppliers," Shaheen said. "I look forward to the Public Utilities Commission moving quickly to complete its work on the settlement agreement, moving us toward electric competition and another rate cut."

Under the legislation endorsed by the commission, electric rates will be reduced 5 percent on October 1 and will drop another 12 percent when actual competition begins. A typical householder stands to save about $13 on his electric bill next month.

Gary Long, president of PSNH, said "It's always been our intent to have restructuring happen for our company this year. We think we can meet it, if there aren't roadblocks put in our way."

There could be a couple of roadblocks, the result of the treatment of PSNH stranded costs by the legislation and yesterday's commission action. PSNH will absorb $450 million of its estimated $2.3 billion in stranded costs, but will be allowed to refinance $800 million through securitization and stands a chance to collect the rest over a period of up to 14 years.

Those provisions will be challenged in court by The Campaign for Ratepayers' Rights and the Great Bay Power Corp.

Robert Backus, lawyer for the ratepayers group, said "We are not satisfied the order achieves a significant benefit for ratepayers. For many of us with long memories, it's just irrefutable that the so-called stranded costs arose out of decisions by PSNH management in which the ratepayers had no right and no voice to dispute what they did."

Great Bay owns 12 percent of the 1,200 megawatt Seabrook nuclear power plant, which this morning was humming along at 100 percent of capacity. Great Bay's lawyer, Steven Camerino, said the company, which sells the power on the wholesale market, pays about $1.7 million a year into Seabrook's decommissioning fund and could be at a disadvantage if the plant were sold to buyers who didn't have that cost.

New Hampshire legislator Jeb Bradley, a backer of the legislative compromise, called the commission action a "reasonable solution to a festering problem." He pointed out "Every day a customer of PSNH paid a PSNH bill, they were paying all of PSNH's stranded costs and existing bills, so PSNH was inexorably marching to the end zone of full recovery of all of their stranded costs if we did not get this deal done."

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