DE 94-163
freedom energy company, llc
Petition of Freedom Energy Company
Order Denying Request for Public Utility Status in
Light of Pending Rulemaking Efforts
O R D E R N O. 22,830
January 12, 1998
On August 1, 1994, Freedom Electric Company, since
reorganized as Freedom Energy Corporation, LLC (hereinafter
Freedom), filed with the New Hampshire Public Utilities
Commission (Commission) a Petition for Permission and Approval to
Do Business on a Limited Basis as a Public Utility in New
Hampshire. By Order No. 21,683 (June 6, 1995), the Commission
found that electric utility franchises were not exclusive as a
matter of law and that a competing utility could be granted a
franchise if it were in the public good. The Commission did not
rule on Freedom's qualifications to be a public utility,
deferring that issue to a further evidentiary phase of the
proceeding.
Public Service Company of New Hampshire (PSNH) appealed
the Commission's Order to the State Supreme Court, which upheld
the Commission's determination. Appeal of Public Service Company
of New Hampshire, 141 N.H. 13 (1996). The Commission moved
forward with the phase of the docket assessing Freedom's
qualifications as a public utility pursuant to RSA 362:2.
On March 28, 1997, Freedom requested suspension of the
proceeding due to the last minute withdrawal of its anticipated
financial partner. The Commission granted the request to suspend
the proceedings but asked Freedom to file a status report of its
developments by May 1, 1997. The Commission also held in
abeyance the Motion to Dismiss filed by PSNH on March 10, 1997.
The New Hampshire General Court enacted HB 726 during
the 1997 legislative session, which amended RSA 374-F by allowing
competitive energy suppliers the right to seek public utility
status from the Commission despite a lack of facilities owned or
operated. It is in the Commission's discretion to determine
whether such treatment would be in the public interest. See RSA
374-F:7. The amendment was effective June 20, 1997.
Freedom, on June 2, 1997, filed a status report with
the Commission in which it asked to be designated a public
utility, pursuant to the amended RSA 374-F:7. In its request,
Freedom argued that it no longer needed to "own, lease, operate,
or otherwise control facilities" and therefore the lack of a
financial partner was no longer a concern.
PSNH objected to the request on June 4, 1997, arguing
that there was no need for further proceedings and that the
matter of Freedom's status should be consolidated with the
Commission's docket on restructuring, DR 96-150.
The Commission heard arguments on the matter on August
21, 1997. In addition to Freedom and PSNH, the Office of
Consumer Advocate (OCA) participated and explored the legislative
history regarding the amendment to RSA 374-F. The OCA
recommended that the Commission grant the request if it found
that doing so would be in the public interest.
Since completion of that hearing and the Commission's
oral deliberations on this issue on November 3, 1997, Freedom
submitted a letter notifying the Commission that some of
Freedom's principals no longer wished to pursue this docket,
though Mr. Rodier and Mr. Clough intended to do so in the name of
Freedom Partners which was in the process of being organized.
Freedom Partners, according to Mr. Clough, would have the same
interest in this and the Retail Wheeling Pilot Program as did
Freedom.
We have considered the arguments in favor and
opposition to Freedom's request and believe the matter is best
addressed in the broader context of a rulemaking docket
concerning the standards for all aspects of competitive
suppliers. This does not mean, however, that we are
consolidating the issue with the full restructuring docket, as
PSNH urges. The Commission is in the midst of a rulemaking on
standards for competitive suppliers, which in turn is the
outgrowth of efforts of the working group established in our
February 28, 1997 Restructuring Plan. Because the bulk of the
working group's meetings were before the enactment of RSA 374-F:7, the current draft of the rules does not address the issue of
what standards should be applied to suppliers who seek to be
regulated as public utilities. We think it should be included in
the current rulemaking and will direct our Staff to develop
standards regarding when a competitive supplier should be
regulated as a public utility. Freedom (or Freedom Partners) and
all other interested parties will have the opportunity to
participate in the development of those rules through our
standard rulemaking process.
We will not proceed further with this docket. After
adoption of the rules, Freedom (or Freedom Partners) will be free
to seek authorization pursuant to the terms of the rules.
Based upon the foregoing, it is hereby
ORDERED, that the Commission's draft rules regarding
competitive energy suppliers be amended to address suppliers who
seek public utility status; and it is
FURTHER ORDERED, that Freedom's request is hereby
DENIED pending completion of the rulemaking.
By order of the Public Utilities Commission of New
Hampshire this twelfth day of January, 1998.
Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary