DR 96-424
hannaford brothers company, inc.
Petition for Retail Electric Service or, In the
Alternative, Amendment to Public Service Company of New
Hampshire Backup Service Rate B (NHPUC No.
37-Electricity)
Order Requiring Negotiations
Regarding Special Contract
O R D E R N O. 22,947
June 1, 1998
APPEARANCES: Preti, Flaherty, Beliveau and Pachios
by Donald J. Sipe, Esq. for Hannaford Brothers Company,
Inc.; Gerald M. Eaton, Esq. for Public Service Company of
New Hampshire; and Eugene F. Sullivan, III, Esq. for the
Staff of the New Hampshire Public Utilities Commission.
I. PROCEDURAL HISTORY
On December 31, 1996, Hannaford Brothers Company,
Inc. (Hannaford) filed with the New Hampshire Public
Utilities Commission a request for an order requiring Public
Service Company of New Hampshire (PSNH) to provide
separately priced Distribution and Transmission demand plus
the related Administrative and Translation charges of PSNH's
Backup Service Rate B (NHPUC No. 37-Electricity).
On July 11, 1997, PSNH filed with the Commission a
Petition for Approval of Optional Pricing to PSNH's Backup
and Standby Service Rate B to become effective immediately
or within 30 days pursuant to RSA 378:3 and N.H. Admin.
Rules, Puc 1601.05(a)(1). The Petition proposed an optional
pricing scheme that has a higher Administrative charge and a
lower Distribution and Transmission charge compared to that
currently under Rate B which PSNH asserted would provide for
a more stable revenue stream.
By Order No. 22,676 (August 4, 1997) the
Commission noted that the two filings related to Rate B and
set a prehearing conference for August 19, 1997 to address,
among other things, whether PSNH's newly proposed
Amendments to Rate B are discriminatory, and whether
Hannaford's petition should be addressed in conjunction with
DR 97-141, PSNH's Rate B proposal.
A duly noticed prehearing conference was held
August 19, 1997 at which the Parties and Staff stipulated to
separate procedural schedules for each proceeding after the
Commission ruled from the bench that consolidation of the
two proceedings was not in the public interest. By Order
No. 22,717 dated September 15, 1997, the Commission
established a procedural schedule regarding Hannaford's
Petition providing for discovery and a hearing on October
30, 1997.
On October 23, 1997, Staff requested a stay of the
procedural schedule to conduct further discovery and resolve
certain discovery disputes. On October 27, 1997, the
Commission stayed the procedural schedule and determined
that the October 30, 1997 hearing would be used to resolve
discovery issues.
A hearing on the substantive issues was ultimately held on
December 3, 1997.
II. DISCOVERY DISPUTES
There were a number of discovery disputes
requiring resolution. On October 3, 1997, Hannaford filed a
Motion to Compel in which it sought PSNH answers to data
requests, 01-22, 01-23, 01-24 and 01-25. On October 17,
1997, Hannaford filed an Objection to Data Requests in which
it argued that data request 1-PSNH 34 was an overly broad
and burdensome request and in which it objected to data
request 1-PSNH 33 as requesting confidential information.
On October 17, 1997, Hannaford filed its Second Set of
Objections to Data Requests in which it objected to data
requests 1-PSNH 8 through 12 as requesting confidential
information. On October 20, 1997, Hannaford filed its
Objection to Staff Data Request and Request for Protective
Order in which it argued that data request Staff-002 and 004
should not be answered without a protective order in place.
The Commission held a hearing on October 30, 1997
at which it heard comments on pending motions regarding
discovery issues. At the conclusion of the hearing, the
Commission indicated, as to the pending motions, that data
request 1 PSNH 33 was irrelevant and therefore granted
Hannaford's objection; that it would not address 1-PSNH 34
since the parties indicated that issue had been resolved;
and, regarding Staff 02 and 04, 1-PSNH 08, 09, 10, 11 and
12, and Hann 1-22, 1-23, 1-24 and 1-25, that it would allow
those questions to be asked and expect them to be answered,
and would expect the answers to be protected by means of a
protective order.
III. POSITIONS OF THE PARTIES
Hannaford explains that it operates eleven
supermarkets in the PSNH service territory that are the
focus of an aggressive energy management program which
includes self-generation. It also contends that the
geographic proximity of the supermarkets makes it practical
to supply back-up power by means of a mobile generator and
it is therefore prepared to isolate its operations from the
PSNH system.
As an alternative to isolating its operations from
the grid, Hannaford proposes to wheel back-up power between
various locations. Consequently, Hannaford seeks to modify
the demand charge under PSNH Rate B and requests
transmission and distribution (T&D) service from PSNH on an
unbundled basis under the T&D portion of Rate B.
Hannaford contends that the modifications make
Rate B economically viable, although not as advantageous as
mobile back-up generators, and that retention of Hannaford
as a customer would contribute approximately $270,000
annually to the benefit of PSNH and its other customers.
Finally, Hannaford argues that its request should be granted
because it is like arrangements PSNH had earlier allowed
with Manchester Mack, GE Somersworth and Crown Vantage.
PSNH asserts that the service requested is not
authorized under its tariff and that retail wheeling of the
nature requested must await industry restructuring. In
addition, PSNH contends that deviation from the tariff would
not be in the public good because there are numerous
commercial customers similarly situated and that the
potential revenue loss "could easily amount to millions of
dollars." Moreover, PSNH states that the only exception to
tariff service is a special contract and the Commission may
not have the authority to order PSNH to enter into a special
contract. Finally, PSNH distinguishes the Manchester Mack,
GE Somersworth and Crown Vantage cases from the instant
case. The Manchester Mack and GE Somersworth cases involve,
among other things, geographically contiguous operations
that allowed physical interconnection and Qualifying
Facilities that could net sales and purchases while the
Crown Vantage case involved an occasion where the customer
deferred a cogeneration alternative.
IV. COMMISSION ANALYSIS
Granting the relief requested by Hannaford would
constitute an amendment to PSNH Rate B based on Hannaford's
particular circumstances and would be contrary to
longstanding regulatory practice that tariffs have general
applicability and not be discriminatory. This finding is
consistent with our position in Order No. 22,756 (October
20, 1997) where we denied PSNH's request to amend Rate B to
meet the particular needs of one customer, North Atlantic
Energy Services Company. Moreover, Hannaford's request to
unbundle Rate B is inopportunely timed to the extent it
would conflict with or undermine the ongoing efforts to
bring about retail competition in DR 96-150 where unbundling
is a key component. Accordingly, we cannot approve
Hannaford's request to modify Rate B.
While we believe it inappropriate to order a
tariff change on Hannaford's behalf, we nonetheless
recognize that under existing circumstances it is very
likely that Hannaford will leave the PSNH system and that
substantial lost revenues will accrue that PSNH may seek to
collect from other ratepayers. Thus, we conclude that the
logical alternative is for PSNH to pursue a special contract
with Hannaford.
Accordingly, we direct PSNH to enter into good
faith negotiations with Hannaford to develop within thirty
days of our written order a special contract that would
address Hannaford's particular need for back-up service. If
PSNH and Hannaford are unable to reach agreement on the
terms and conditions of a special contract, we direct the
parties to provide us with their respective last best
offers. Based on that information, we will determine
whether PSNH acted imprudently in rejecting Hannaford's
offer and reserve the right to disallow recovery of lost
revenues if Hannaford leaves the PSNH system as a result of
PSNH imprudence.
Based upon the foregoing, it is hereby
ORDERED, Hannaford's request to modify PSNH Rate B
is not approved; and it is
FURTHER ORDERED, that PSNH and Hannaford file
within 30 days of the date of this order a report detailing
efforts to negotiate a special contract and, if an agreement
is not reached, include with the report a copy of their
respective last best offers.
By order of the Public Utilities Commission of New
Hampshire this first day of June, 1998.
Douglas L. Patch Bruce B. Ellsworth Susan S.
Geiger
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary