Senator’s bill to let utilities build generation draws sharp debate over risk to ratepayers

Senator Kevin Avard introduced legislation to permit electric distribution utilities to own and build generation facilities in New Hampshire, an exception to the state’s long-standing restructuring framework. The amendment read into the record would allow utilities, with Public Utilities Commission approval and a finding that projects ‘‘serve the public interest’’ and ‘‘provide benefits to ratepayers and taxpayers,’’ to develop generation up to a combined 400 megawatts apportioned by load served. The amendment would also bar utilities from earning a rate of return on capital expenditures made under the chapter and limit long-term power purchase agreements to 20 years.

Supporters said the measure is meant to create optionality for adding generation immediately near load centers and to give utilities a pathway to invest when it makes sense for customers. ‘‘We need more generation because we are becoming more dependent upon electricity,’’ Avard said, arguing limited utility ownership could help increase capacity.

Business and generator witnesses urged caution. Molly Connors of the New England Power Generators Association (NECCA) testified that utilities generally lack merchant‑generation expertise and that allowing rate‑based generation ‘‘will shift the risks and costs of bad investments and overruns from private investors onto consumers.’’ Jermaine Monaghan, speaking for Constellation, said the bill could send the wrong market signal and risk an unlevel playing field if utility investments are perceived to enjoy implicit support.

Consumer Advocate Donald Kreece urged the committee not to ‘‘walk back’’ restructuring, arguing that recent upward pressure on bills has come largely from transmission and distribution costs rather than generation. Eversource representatives said the company had no present plans to enter generation but cautioned that prohibiting a return entirely could make utilities unwilling to pursue optional projects.

Several witnesses proposed alternatives: broaden existing exemptions for small distributed projects under RSA 374‑g, expand programs that enable local distributed generation and storage, use long‑term procurements, or permit leasing arrangements so utilities can contract capacity without taking full ownership. Supporters of micro‑reactors and distributed solutions said smaller projects could add capacity faster and closer to demand.

The committee took testimony from utilities, generators, consumer advocates, and organizations representing community power and environmental interests, and recessed the hearing for further work on amendment language and risk protections. No final votes were taken.