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NH PUC approves divestiture of Eversource hydro, fossil fuel assets

TheNew Hampshire Public Utilities Commission on July 1 authorized the divestitureof hydroelectric and fossil fuel generation facilities owned by subsidiaryPublic Service Co. of NewHampshire.

Thedivestiture is part of a settlement agreement reached in by the utility and otherparties, including PUC staff, the state Office of Energy and Planning and thestate Consumer Advocate. The auction of the assets will occur within the nextsix months.

PSNH,which had already sold its nuclear assets, was required by electricrestructuring statutes to get PUC approval before selling its remaining assets,which consist of about 1,200 MW of capacity generated by nine hydro facilitiesand three fossil fuel plants. After PUC advisory staff in September 2015recommended delaying the divestiture to avoid imposing a financial burden of$677 million onratepayers, a "partial litigation settlement" was reached in January.

"Wecannot predict the future, and we cannot guarantee that the projected savingsand economic development promised by divestiture and securitization willactually occur," the PUC said. "The record before us, however,demonstrates that customers of Eversource and the economy of the state willlikely benefit from our approval of the settlement agreements."

"Byapproving the divestiture of Eversource's remaining generation assets, we implementthe legislature's long-standing policy goal of restructuring the State'selectric industry to one of full and fair competition," the PUC said inits approval.

New HampshireGov. Maggie Hassan welcomed approval of the settlement, which she said willreduce costs for ratepayers and help avoid costly litigation.

"Thisagreement provides substantial benefits to our customers, while also ensuringour employees are treated fairly during this transition," Bill Quinlan,president of New Hampshire electrical operations for Eversource, said in a newsrelease. "Our customers will enjoy substantial savings as we divest ourgenerating plants due to the current high capacity value for generation, theavailability of low-cost financing of any remaining costs and our agreement toforego recovery of $25 million related to the Merrimack Station emissionreduction 'scrubber.'"

Anextension of PSNH's reliability enhancement program will also allow Eversourceto continue making important system investments, Quinlan said.

Otherterms of the settlement include a tax stabilization plan for affectedcommunities and a $5 million clean energy fund created by Eversource. As laidout by S.B. 221, which was enacted in July 2015, stranded costs are to berecovered following the sale through the issuing of securitization bonds whileany remaining stranded costs will be recovered through a nonsecuritized,stranded-cost charge. PSNH's electric distribution rates are also to remainfrozen two years beyond the utility's current rate plan through at least July1, 2017.

The fossilfuel plants that will be sold are the 439-MW coal-fired plant in Bow, the400-MW dual-fuel Newington plant in Newington, the dual coal andbiomass-fired SchillerCoal plant in Portsmouth and the oil-fired plant, also inPortsmouth.

The69-MW of hydro facilities that will be sold are the plant in Manchester, theAyers Islandfacility in Bristol, the Canaan facility in West Stewartstown, the plant inFranklin, the Garvins Fallsplant in Bow, the Gorham plant in Gorham, the facility in Hooksett,the Jackman plantin Hillsborough and the Smith facility in Berlin.

Newowners of the facilities are required to continue operating the plants for atleast 18 months following the sale.(Order No. 25,920)