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Committee flags CPCNH negative reserve and exit costs as key risk for Pembroke
Summary
Members heard a CPCNH memo citing a roughly $31 million Eversource under‑collection and were told Pembroke’s financial reserve could become negative (estimates cited between roughly $100,000 and $300,000). The committee asked CPCNH for a town‑specific amortization chart and discussed a three‑year termination window.
During the June 1 Pembroke Energy Committee meeting, Committee member (S3) told the group a CPCNH memo that used Eversource data showed under‑collections in recent intervals totaling about $31 million and estimated a 0.9¢ residential rate increase over 12 months would be required to reconcile those under‑collections.
S3 said CPCNH will prepare a table showing the town’s committed load and what CPCNH has already hedged; the sum of committed purchases and the financial reserve balance becomes the town’s exit obligation at a point in time, and CPCNH will illustrate how that obligation amortizes month by month until it reaches zero. “They would create a table that that would show how our load obligation would go down and how our financial reserve would change over time,” S3 said.
Why it matters: committee members worried a large negative financial reserve could leave Pembroke exposed to a substantial liability if the town sought to exit community power. Chair (S4) said some accounting reviews suggested a negative reserve is mostly a transient accounting artifact until formal exit; others warned the figure could represent a real liability if the town attempted an immediate exit. Committee member (S3) quoted CPCNH expectations that Pembroke’s financial reserve could be negative roughly $100,000 to $300,000 now but might shrink by about $200,000 by July.
The committee discussed contract mechanics and timing: members cited contract language that allows CPCNH up to three years to settle committed obligations if a town decides to leave (example given: leaving on June 1, 2026 could extend obligations through March 31, 2029). The group asked Jackson Casperi and CPCNH to prepare a Pembroke‑specific chart before the June 24 Select Board update.
Committee members raised creditor and market‑counterparty risk as an open question. S3 said trading and finance counterparties such as Calpine could hold much of the exposure in stressed scenarios but acknowledged the system’s complexity and that bankruptcies or failures could cascade through suppliers.
Outcome and follow‑up: the committee resolved to monitor CPCNH financial data, request the town‑specific exit/amortization chart, and include CPCNH liability figures in the June 24 Select Board briefing. The committee did not vote to leave CPCNH or take unilateral action; members framed the next steps as information gathering and risk assessment.
