Eversource 2014 Annual Report Download - page 19

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2011, the NHPUC opened a docket to review the Clean Air Project. For further information, see "Regulatory Developments and Rate Matters –New
Hampshire –Clean Air Project Prudence Proceeding" in the accompanying Item 7, '
.
The following table shows the sources of PSNH's 2014 electric franchise retail revenues based on categories of customers:
PSNH
 2014 % of Total
Residential $478,753 54
Commercial 299,538 34
Industrial 72,624 8
Other 37,544 4
Total Retail Electric Revenues $888,459 100%
A summary of PSNH's retail electric GWh sales volumes and percentage changes for 2014, as compared to 2013, is as follows:
2014 2013
Percentage
Change
Residential 3,172 3,208 (1.1)%
Commercial 3,332 3,357 (0.8)%
Industrial 1,382 1,373 0.6 %
Total 7,886 7,938 (0.7)%
Rates
PSNH is subject to regulation by the NHPUC, which, among other things, has jurisdiction over rates, certain dispositions of property and plant,
mergers and consolidations, issuances of securities, standards of service and construction and operation of facilities. New Hampshire utilities are
entitled under state law to charge rates that are sufficient to allow them an opportunity to recover their reasonable operating and capital costs, in order
to attract needed capital and maintain their financial integrity, while also protecting relevant public interests.
Under New Hampshire law, all of PSNH's customers are entitled to choose competitive energy suppliers, with PSNH providing default energy
service under its ES rate for those customers who do not choose a competitive energy supplier. At the end of 2014, approximately 21 percent of all
of PSNH's customers (approximately 46 percent of load) were taking service from competitive energy suppliers, compared to 25 percent of
customers (approximately 54 percent of load) at the end of 2013.
The rates established by the NHPUC for PSNH are comprised of the following:
A default energy service charge (ES) is charged to customers who have selected not to receive their energy supply from a competitive
energy supplier. These charges recover the costs of PSNH's generation, as well as purchased power, and include the NHPUC allowed ROE
of 9.81 percent on PSNH's generation investment.
A distribution charge, which includes an energy and/or demand-based charge to recover costs related to the maintenance and operation of
PSNH's infrastructure to deliver power to its destination, as well as power restoration and service costs. This includes a customer charge to
collect the cost of providing service to a customer; such as the installation, maintenance, reading and replacement of meters and
maintaining accounts and records.
A transmission charge that recovers the cost of transporting electricity over high voltage lines from generating plants to substations,
including costs allocated by ISO-NE to maintain the wholesale electric market.
A stranded cost recovery charge (SCRC), which allows PSNH to recover its stranded costs, including above-market expenses incurred
under mandated power purchase obligations and other long-term investments and obligations. PSNH had financed a significant portion of
its stranded costs through securitization by issuing RRBs secured by the right to recover these stranded costs from customers over the life
of the RRBs. The costs of the RRBs, which were retired on May 1, 2013, were recovered through the SCRC rate.
A systems benefits charge (SBC), which funds energy efficiency programs for all customers as well as assistance programs for residential
customers within certain income guidelines.
An electricity consumption tax, which is a state mandated tax on energy consumption.
The energy charge and SCRC rates change semi-annually and are reconciled annually and recovered in subsequent rates. The Rate ADE
reconciliation amount is incorporated into the ES reconciliation.
PSNH is currently operating under the 2010 NHPUC approved distribution rate case settlement, which is effective through June 30, 2015. Under the
settlement, PSNH is permitted to file a request to collect certain exogenous costs and step increases on an annual basis.
Generation Assets
In 2013, the NHPUC opened a docket that initiated a series of actions throughout 2013 and 2014 regarding the potential divestiture of PSNH's
generating plants, including actions by the NHPUC staff, the State of New Hampshire Legislative Oversight Committee on Electric Utility
Restructuring (Oversight Committee), a valuation expert, and the New Hampshire Legislature. During the 2014 Legislative session, in response to an