Restructuring, Community Power, and Competitive Markets

In 1996, New Hampshire led the nation in being the first state to pass an Electric Utility Restructuring Act (RSA 374-F), the purpose of which was to de-monopolize aspects of the power sector to give customers greater choice, lower costs, and enable market innovations.

After several periods of rapid growth in the intervening years, the competitive market has stalled. Four out of five customers remain on default service provided by the distribution utilities, and the customers that are on competitive supply only account for about half of total electricity usage. Residential customers, in particular, are not offered many rate options or clean technology innovations today: out of the 29 competitive suppliers currently offering service in New Hampshire, only nine offer service to residential customers (and only four serve customers in every distribution utility territory).

 

As a consequence, New Hampshire has fallen behind every other state with a restructured electricity market in terms of price competition:

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Credit: Retail Energy Supply Association

To achieve the goals of the Electric Utility Restructuring Act, New Hampshire’s Community Power law (Senate Bill 286; RSA 53-E:6) was passed and became effective October 1, 2019. Under the new law:

  • Municipal governments (cities, towns, and counties) are now authorized to launch Community Power programs to serve as the default electricity provider for their residents and businesses on a competitive, opt-out basis; and 

  • The incumbent distribution utility that owns and operates the local electrical grid (poles, wires, transformers, substations, etc.) continues to deliver electricity to customers.

 

The programs are required to be self-funded through revenues received by participating customers, with only limited exceptions allowed for public funds to cover incidental costs prior to launch (such as to comply with regulatory requirements, review contracts, and so on). 

 

All customers in the municipality must be notified and may choose to opt-out of, or request to opt-in to, participating in the program:

  • Customers currently on utility default service must be notified, provided the opportunity to decline participation, and thereafter transferred to the Community Power program if they do not opt-out.

    • Customer notifications will: include the initial fixed rate for the program’s default service compared with the utility’s rate, be mailed to customers at least 30 days in advance of program launch, and provide instructions for customers to decline participation (for example, by return postcard, calling a phone number or using a web portal).

  • Customers already served by Competitive Electric Power Suppliers must be notified and may request to opt-in to the program; and

  • New customers will thereafter be transferred onto the Community Power program’s default service, unless they choose to take service from the utility or a Competitive Electric Power Supplier.

All customers on the Community Power program’s default service will remain free to switch back to the utility or to take service from a Competitive Electric Power Supplier thereafter.

Local Control Authorities

RSA 53-E:3 allows Community Power programs to enter into agreements and provide for: “the supply of electric power; demand side management; conservation; meter reading; customer service; other related services; and the operation of energy efficiency and clean energy districts adopted by a municipality pursuant to RSA 53-F and as approved by the municipality's governing body.”

 

RSA 53-E:3-a further provides Community Power programs with authorities and regulatory pathways to offer more advanced meters for customers, and to provide for a more streamlined customer billing experience. 

 

Both metering and billing services are important means by which Community Power programs will be able to better engage customers and offer more innovative services that lower the energy expenditures and carbon emissions for individual customers and communities.

 

Unlocking the full range of municipal authorities enabled by RSA 53-E could be a game changer for our communities, local infrastructure and the competitive retail electricity market. Successful implementation requires coming up to speed on industry best-practices, navigating complex regulations, coordinating across utilities, and contracting for an array of sophisticated services. 

 

To enable all municipalities to work together to achieve this purpose, RSA 53-E:3 provides that “such agreements may be entered into and such services may be provided by a single municipality or county, or by a group of such entities operating jointly pursuant to RSA 53-A.”

 

In launching Community Power programs through the Coalition (a Joint Powers Agency established pursuant to RSA 53-A), our Member municipalities have begun working together to competitively procure electricity supplies, offer innovative customer services and programs that communities want, and begin to work in partnership with our distribution utilities — along with regulators and innovative businesses — to modernize our electrical grid and market infrastructure.

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