Senate hearing on performance‑based utility rates spotlights tradeoffs between affordability and incentives
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Summary
Lawmakers and utility stakeholders debated a bill to add performance‑based criteria to electricity rate‑making, with the sponsor emphasizing consumer protections and utilities and the Department of Energy urging clarity on triggers, Totex, and who sets key definitions.
Sen. Rebecca Perkins Cuoco introduced SP 597 and an accompanying amendment, saying the bill would let regulators use performance‑based mechanisms and an inflation adjuster to protect ratepayers while encouraging grid modernization and demand‑response measures. "My name is senator Rebecca Perkins Cuoco. I represent District 21. I'm the prime sponsor of the of s p 5 97," she told the Energy and Natural Resources Committee.
Supporters and neutral witnesses framed the bill as a potentially useful tool but flagged implementation risks. Josh Elliott, director of the Division of Policy and Programs at the New Hampshire Department of Energy, said the department was neutral on the bill and identified structural ambiguities: the statute does not define the measurement period for the amendment’s 4% trigger, it lacks an explicit CPI definition, and it is unclear whether supply‑side price swings (outside a distribution utility’s control) could inadvertently trigger PBR oversight.
The sponsor said the amendment aims to inject metrics into the Public Utilities Commission’s rate‑making—things like affordability and volatility reduction, interconnection timing, demand‑response attribution and grid modernization—and to allow an inflation adjuster on a proposed rate cap to give consumers predictability. "So that's starting, let's see, on line 36 of page 2...these criteria...would really sort of help inject into the rate making process further incentives," she said.
Utility and stakeholder witnesses urged caution. Dina Dennis of the Community Power Coalition of New Hampshire said PBR frameworks should preserve market access for competitive suppliers and include symmetrical incentives and penalties so utilities face consequences for failing to meet targets. Alec O’Meara of Unitil said his company is agnostic toward PBR in principle but prefers the Public Utilities Commission’s investigative process design a program tailored to each utility’s characteristics. Eversource representatives raised legal concerns about statutory caps and referenced an ongoing PUC proceeding addressing similar issues.
Committee members focused on practical design choices: whether to confine PBR to distribution functions the utility controls (rather than supply procurement), how Totex (blending capital and operating expenditures) would interact with GAAP and financial audits, and whether step increases or lumpier adjustments better serve predictability for households. Senators also discussed smart‑meter rollouts and how time‑of‑use pricing, demand response and more granular meter data could reduce bills irrespective of wholesale supply volatility.
Next steps: witnesses and sponsors agreed language needs clarification on definitions (measurement period, CPI index, scope of "energy rate") and on whether the PUC’s ongoing investigatory docket should be allowed to complete before statutory action. The committee closed the hearing without a vote on SP 597 and moved to other business.
