A proposal to bring more electric plants to parts of New England could raise rates for nearly all the region's electric customers, including those in New Hampshire.
The 13 billion dollar Locational Installed Capacity Market Proposal, or LICAP, has recently gained approval from an administrative judge at the Federal Energy Regulatory Commission in Washington.
But all six New England governors have come out against the plan.
And regulators and consumer groups in New Hampshire are also trying to derail it.
New Hampshire Public Radio's David Darman has more.
Officials who oversee the electricity grid in New England say they're anxious.
In just a few years, they predict there won't be enough power for everyone who wants it.
Ellen Foley is a spokesperson at ISO New England in Holyoke, Massachusetts.
electricity demand is growing at about 500 megawatts or about the size of a good power plant a year, so ...and it takes about 2 to 3 year ....lead time to construct a new power plant. so the time is now for us to put in place a wholesale market mechanism that will spur investment in new generating supplies.
ISO New England plans to increase the region's power supply by subsidizing the investment in new power plants.
ISO would raise the money from New England ratepayers, through an additional charge on their monthly bills.
Customers at New Hampshire Electric Coop, Granite State Electric, Public Service of New Hampshire, and Unitil would have to pay these additional fees.
David K. Foote is the senior vice president for Unitil Energy Systems.
our current residential rates for a typical customer are about 55 dollars a month. so that would be, you know, another 5 and a half, maybe 15 dollars additional. so, its a very significant increase ....
New Hampshire regulators are openly questioning why ratepayers here should have to pay this fee.
Anne Ross is New Hampshire's Consumer Advocate.
She says New England has plenty of power.
we're at twenty eight percent excess capacity of new england. and for new hampshire we're actually at 90 percent excess capacity. that is, we have generation in the ground that serves 90 percent in excess of our current load. and even for the region at twenty eight percent excess, the market response right now for capacity is, its not worth a lot, because of we have plenty of it.
Most of the region has sufficient power to meet their needs.
But ISO officials and state regulators agree that the Boston area and Southwest Connecticut are in danger of soon overloading their existing power supplies.
State officials say they're just not sure ISO's plan to pay existing owners will result in new power plants where they're needed.
Again, New Hampshire Consumer Advocate Anne Ross.
theres no requirement when a generator recieves these payments that the generator take that money and invest it in any new capacity. it simply goes to that generator's profitability. so, if your paying all existing generators, their incentive, under this scheme it is to not have new generation enter the market, ...
Part of the problem New England planners face in Boston and Connecticut is that there's no way to get electricity to these areas from other places.
The region's system was set up during an era when long distance transmission between states wasn't necessary.
But Ellen Foley of ISO New England says that's starting to change.
right now what we're trying to do is increase the transmission system or build up the transmission system to make it more flexible so we could take the power that's being produced in New Hampshire and move it down to market or take the power produced up in Maine, and take it down to where its needed in Greater Boston.
The power shortages ISO New England is worried about would likely take place on hot summer days, when utilities typically experience peak loads.
A few years ago, heavy electricity usage in California resulted in high prices and rolling blackouts there.
ISO New England planners hope their plan would avoid that picture by getting enough plants constructed to handle future electric loads.
But some conservationists in New Hampshire say they don't think it's necessary to spend billions of dollars to produce more electricity.
Laura Richardson is President of New Hampshire Sustainable Energy Association.
She says people can take simple steps to conserve power, so new plants wouldn't be needed.
i heard somewhere that if everyone in the country used six compact flourecent bulbs in their most commonly used lights ....we could eliminate 22 power plants. and that's a really easy thing to do. switching a light bulb, it shouldn't...you know, there a plenty of jokes about it. but it should take one person and it should take less than a minute to switch that light bulb.
Despite concerns from officials, regulators and environmentalists in several states, ISO New England has pressed forward with their plan to pay power plant owners and hope they build new plants.
Their plan has already been approved by part of the federal agency that oversees the electricity market.
The full Federal Energy Regulatory Commission is expected to rule on the plan sometime this fall.
New Hampshire officials have promised to fight the proposal, and to try and get ISO New England to consider cheaper ways to assure the region's power supply.
If that effort fails, and federal regulators approve ISO's plan, it would go into effect on January 1, 2006.
