Public Service Company of New Hampshire

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Public Service Company of New Hampshire

780 North Commercial Street
P.O. Box 330
Manchester, New Hampshire 03105-0330
U.S.A.
Telephone: (603) 669-4000
Toll Free: (800) 662-7764
Fax: (603) 634-2367
Web site: http://www.psnh.com

Wholly Owned Subsidiary of The Northeast Utilities System
Founded: 1926
Employees: 1,222
Sales: $794.2 million (2002)
NAIC: 221110 Electric Power Generation; 221111 Hydroelectric Power Generation; 221112 Fossil Fuel Power Generation

Public Service Company of New Hampshire (PSNH), the Granite State’s largest electric utility, is a wholly owned subsidiary of Connecticut-based Northeast Utilities (NU), which provides energy to customers from Maine to Maryland. PSNH serves more than 447,000 homes and businesses throughout the state with the help of over 1,200 employees who work and live in New Hampshire and contribute in many ways to the communities where they reside. Since its inception in 1926, PSNH has grown to comprise three fossil-fuel-fired generating plants and nine hydroelectric facilities, jointly capable of generating more than 1,110 megawatts of electricity. This ample and diverse supply of energy provides the foundation for the continued economic growth and prosperity of New Hampshire residents. As an integral part of New England’s largest electric system, PSNH serves three-quarters of the state in 201 communities. The principal business of the company is the generation, purchase, transmission, distribution, and sale of electricity. PSNH’s commitment to safeguarding the environment through reduced emissions, corporate giving, community involvement, and strategic partnerships has earned it numerous awards from state and federal agencies. PSNH accounted for about 41 percent of NU’s total consolidated 2002 earnings.

1850–1925: The Forerunners

As in many other states, the forerunners of electricity in New Hampshire were the water wheels powering the grist, lumber, and textile mills that spurred the development of industry. Gas lights and horse-drawn street cars were soon introduced to meet the needs of the people in the towns formed around New Hampshire mills—as well as for the growing population of the Portsmouth shipping center. Then came arc lights and trolley cars. The Nashua Gas Light Company turned on its first gas lights in November 1853 and the Manchester Horse Railroad in 1877 carried its first 16 passengers in ten-foot cars.

By 1882 Thomas A. Edison had put into operation the world’s first two commercial electric generators, one in London and another at Pearl Street Station in New York. Meanwhile, the New England Weston Electric Light Company of Boston had arranged to build a generating station in Manchester, New Hampshire, on the property of the Amoskeag Manufacturing Company. Weston Electric turned on the first electric street lights in Manchester on April 23, 1882—two weeks before the start-up of the Pearl Street Station. In 1885 the Manchester Electric Light Company bought all the Weston property in the city and in 1901 merged with the Manchester Traction, Light and Power Company. PSNH records indicate that 39 of the pioneer electric companies that later became part of the company had been in the electric business before 1900 and that another 15 had been incorporated before that date. Two specific developments, the operation of the first alternating-current generator and the industrial use of electric power and alternating current, opened the way for the evolution of PSNH.

1926–32: Founding and Early Years of PSNH

According to Everett B. Sackett, author of Fifty Years of Service: A History of Public Service Co. of New Hampshire, investment houses were the buyers and sellers of utility companies. The most active of these investment houses was Samuel Insull’s Middle West Utilities (MWU) in Chicago. Insull had bought most of the competing electric companies in the city and set electricity prices low enough to lure customers from the gas companies. Insull’s activity increased the volume of sales and thereby created economies of operation, but larger amounts of capital were needed to fund expanded operations. Insull then organized Middle West Utilities (MWU), which functioned as both an operating company and a holding company to raise money “by selling securities backed in part by the securities of the operating companies and in part by accounting legerdemain,” wrote Sackett.

At times, to raise new capital, Insull bought companies far removed from his Chicago base of operations. For example, MWU reached out as far east as northern New England to buy the Central Maine Power Company. Eventually Insull combined all his northern New England holdings by forming the New England Public Service Company (NEPSCo) as a holding company that owned all, or nearly all, the common stock of its subsidiaries, one of which was the Public Service Company of New Hampshire (PSNH).

In the early days of the industry, small electric companies emerged almost overnight and then sought to consolidate. PSNH, for instance, had been incorporated in August 1926 as a consolidation of five New Hampshire electric companies. PSNH eventually consolidated Insull’s holdings in New Hampshire, thereby acquiring properties in the southern and western parts of the state. Through its contacts with NEPSCo, PSNH could then bring eastern and northern New Hampshire into a statewide system. After its founding and up to December 1943, PSNH acquired the franchises and utility properties of 25 other electric and/or gas companies in New Hampshire. The company then hastened to unify its holdings by lacing the state with utility lines.

One of the ways PSNH promoted the sale of its product was to make central-station power available to rural areas. According to the company’s 1928 annual report, many of the newly installed electrical rural lines had been made “in response to an insistent demand for a higher standard of living and increased comfort on the farm.” PSNH sold its gas business in 1945.

PSNH also attracted new companies into the state by offering them free trials of electrical applications. According to the company’s annual report cited above, if PSNH had “spare generating and line capacity” at the time of a company’s desire for trial use, granting the request would “assist in bringing new industries into the territory.” A 1929 survey conducted by PSNH and local chambers of commerce found that 18 new industries employed 3,300 employees within the PSNH territory.

To promote domestic use of electricity, PSNH even experimented with an “active-room” rate for small houses and apartments: the company billed the customers in proportion to their needs, and at the same low rate applied to larger establishments. Initially PSNH’s business included the gas, electric railway, and steam businesses. By 1931, however, the number of gas meters had fallen to 10,960 while electric meters had increased to 51,270; use of the automobile had cut into the street-railway business; and the handful of customers buying steam required the use of only one of the generating plants.

1930s–40s: Meeting Challenges

Insull’s Middle West Utilities at first weathered the economic upheaval brought on by the stock-market crash and even came to the aid of the city of Chicago and of some troubled industries. Insull, however, had made some imprudent decisions and could not fend off a group of New York bankers determined to gain control of his $3 billion empire. In 1932 he resigned all his corporate positions. The collapse of the Insull companies occasioned a government investigation of how utility companies were financed and brought about the passing of the Public Utility Holding Company Act of 1935. Thus, NEPSCo was severed from MWU but remained the owner of its regional subsidiaries, which included PSNH.

The year 1936 had been good for New England business, but there was gnawing economic worry about growing competition from southern textile mills. The greatest threat to PSNH’s continued growth was the closing of Manchester’s Amoskeag Manufacturing Company, the largest cotton mill in the world. With a view to developing the abandoned establishment, PSNH’s Schiller and a group of Manchester business leaders formed a new corporation, Amoskeag Industries, Inc. Emboldened by PSNH’s purchase of 18 percent of Amoskeag’s stock and the offer to pay for waterpower developments and the electrical-distribution system, local industries raised enough additional money to finance renovation of the mill. By year-end 1937, due in large part to PSNH’s involvement, 40 companies had bought or leased space in the mill buildings and were employing about 4,000 workers. Thus, PSNH emphasized its continuing concern for creating jobs in New Hampshire.

Over and above dealing with economic storms, in 1936 PSNH also had to cope with ice jams and the worst flood in New England’s 300-year history. The hurricane of September 1938 proved so devastating that electric service was interrupted statewide and not fully restored for several weeks. PSNH could cope with these natural disasters because in 1931 it had acquired the Jacona, a government ship converted into a floating power plant anchored at Portsmouth. The Jacona generated steam for about one-sixth of PSNH’s total generating capacity. On March 17, 1945 the U.S. government seized the ship for use in the war effort.

Company Perspectives:

PSNH and its employees share a deep conviction that the defining factor separating a business leader from other successful businesses is a sincere commitment to serving the needs of its community. As a statewide company that provides electricity, a product essential to everyday life, PSNH addresses the economic, educational, environmental and social needs of its community. PSNH believes that this pledge fosters the personal development of its employees and the sense of teamwork that assure productivity and corporate success.

From 1929 to 1945, except for a minor setback in 1938, PSNH annually generated and sold an increasing amount of electricity. Residential customers’ average use increased without a break, from 453 KWHs in 1932 to 1,012 KWHs in 1945. The average cost per KWH for domestic consumers moved steadily downward from 7.48 cents in 1932 to 4.45 cents in 1945 (in 1945 dollars).

Postwar Period

By 1966 PSNH’s sale of industrial power was 333 times what it had been in 1948, while the gain in domestic use of electricity (due mainly to electrical heating in homes) was twice that much. At year-end 1966, electricity was used to heat 19,276 homes and 1,309 establishments. PSNH slowed down its marketing efforts and discontinued its complimentary wiring of buildings for heat. According to historian Sackett, in 1948 “the company’s 31 hydroelectric plants, with a rated capacity of 77,500 KWs, were matched by six fuel-burning plants having a capacity of 76,250 KWs. New England was running out of undeveloped water power.” Furthermore, the generating stations situated on New England rivers could not always operate at optimum capacity because of erratic stream flow. For example, the Amoskeag installation at Manchester could run at its maximum level only 17 percent of the time in an average year. Maine still had an undeveloped amount of power, but a 1955 law forbade exportation of power to other states. By 1973, PSNH had retired 41 of its hydroelectric plants.

From 1945–51, the demand for power more than doubled and obliged PSNH to add new generating facilities. In 1948 the company replaced the Jacona with the Resistance, which had been built and used by the government in World War II. After extensive repairs, the Resistance generated 30,000 KWs of electricity, thereby merely replacing the Jacona. PSNH then planned the construction of a fully integrated 40,000 KW mercury binary-cycle plant that became known as the Schiller Plant. This station, the first of its kind in the country, used a unique mercury-based process to generate power; required only three-fourths of the fuel needed by former methods for producing a comparable amount of electricity; and, according to historian Sackett, “was said to be the most efficient fuel plant in the world.” The first unit of the Schiller plant was dedicated in 1950. By 1970 three additional units were also functioning.

Use of electricity increased as fast as PSNH could build additional generating stations and transmission facilities. By 1968 the company was adding new electrical companies and withdrawing its involvement in fields other than electricity. The gas business had been sold in 1945 and the steam business was stopped in 1949. By 1940 the electric-trolley activity, once a major part of PSNH operations, had become unprofitable and the company switched to operating buses. After World II, the lifting of gasoline restrictions led to increased use of automobiles for transportation and PSNH sold its bus lines in 1954.

In 1941 PSNH had registered a 70 percent gain in revenue; however, in 1950 the company was overwhelmed by a 90 percent increase in production costs, especially for the purchase and transportation of coal. Repeatedly, the company implemented rate increases and tried to control costs by joining other utilities to study and implement the use of atomic power. According to PSNH’s 1954 annual report, the region’s major utilities had organized the Yankee Atomic Electric Company to explore “the unknown and unlimited potentialities of the concentrated energy possessed by atomic fuels.” In 1971 PSNH also joined other investor-owned power companies in New England to form the New England Power Pool (NEPOOL) to share the construction and operational costs of developing the “Big 11” power loop. This loop was a network of 345-kilovolt (KV) transmission lines tying together the systems of the 11 pool members. (A kilovolt is a unit of 1,000 volts). Membership in NEPOOL was later opened to all New England utilities, regardless of ownership.

1970s–80s: Escalating Prices and Crises

Since use of nuclear energy was already a proven technology in some parts of New England, as early as 1968 PSNH considered building an 860-megawatt atomic plant at Seabrook, but financial conditions obliged the company to shelve the plans. However, when the newly established Organization of Petroleum Exporting Countries (OPEC) raised the price of oil to previously unknown heights, oil that had cost 4 cents a gallon in October 1970 sold for 27 cents a gallon in 1974. Faced “with the threat of economic starvation and blackmail posed by OPEC,” wrote Chris Herbert in the May 1996 issue of New Hampshire Business Revue, the U.S. government discouraged the use of fossil fuel and to encourage use of alternate resources, in 1978 Congress passed the Public Utilities Regulatory Policy Act.

Key Dates:

1926:: Public Service Company of New Hampshire (PSNH) is formed by consolidating five New Hampshire electric companies.
1929:: PSNH begins selling gas and electric appliances.
1935:: The Public Utility Holding Company Act is passed.
1946:: PSNH goes public.
1950:: PSNH’s Schiller station becomes the first fully integrated binary cycle plant in the country and is considered the world’s most fuel-efficient plant.
1954:: PSNH sells the bus lines that grew out of its electric trolley businesses.
1971:: PSNH joins the New England PowerPool (NEPOOL).
1989:: N.H. Supreme Court rejects PSNH emergency rate increases; the company files bankruptcy; bankruptcy court approves Northeast Utilities’ (NU) two-step purchase plan.
1992:: PSNH emerges from bankruptcy, becoming a wholly owned NU subsidiary.
2001:: The N.H. Deregulation Act and the N.H. Clean Power Act go into effect.
2002:: PSNH relocates its headquarters to the old Manchester Steam Plant, which is renovated and renamed Energy Park.

By January 1972 PSNH had decided not only to build a nuclear plant at Seabrook but also to have it consist of two 1,150-megawatt units, to be completed in 1979. PSNH was to own 50 percent of the $1.3 billion project and share the remaining investment with other New England utilities. In January 1974 the New Hampshire Site Evaluation Committee, the Public Utilities Commission (PUC) and other regulatory bodies had issued the basic permits, but interveners in the case succeeded in having the New Hampshire Supreme Court overturn these permits. After repeated appeals and rehearings PSNH received its construction permit in July 1976—and experienced its first protest at the planned site.

There followed a decade of other protests at the site, inside regulatory chambers, and in New Hampshire and Washington courtrooms. The 1979 accident at the Three Mile Island nuclear-power plant in Pennsylvania—to name but one event that triggered concern about ecological and safety issues—played a significant role in these protests. So did delays imposed through public intervention, slow regulatory approvals, and two significant labor strikes. PSNH had to borrow money to meet ever-escalating costs. In 1978 the company had been authorized to charge customers for the carrying costs of loans to build the Seabrook plant. New legislation stated that PSNH could not recover any investment in the Seabrook Station until the plant provided electricity to its customers. Deprived of CWIP costs (Construction Works in Progress, known as stranded costs), PSNH had to borrow even more heavily at a time of high interest rates. The N.P. Public Utilities Commission (NHPUC) ordered PSNH to reduce its ownership in the plant from 50 percent to 35.6 percent. In March 1984 the joint owners canceled Seabrook Unit II and formed New Hampshire Yankee, a separate division of PSNH, to manage the construction of Unit I and bring it into operation.

Seabrook Unit I was completed in July 1986 at a cost of $4.5 billion but did not go into full operation until August 19, 1990, at which time PSNH had not yet recovered any of the construction costs. Seabrook’s final cost was $6.6 billion and PSNH’s share of the debt was $2.9 billion. In May 1986 PSNH asked the NHPUC for a two-step rate increase; however, the agency ruled against the request. In a final effort to remain solvent, PSNH appealed NHPUC’s decision by filing for a 15 percent emergency rate increase and asked the New Hampshire Supreme Court to suspend the Anti-CWIP law.

Late 1980s–90s: Bankruptcy and Restructuring

On January 26, 1988, the court ruled that the Anti-CWIP statute was constitutional and prevented PSNH from receiving the emergency rate increase. Two days later, on January 28, PSNH filed for protection under Chapter 11 of the U.S. Bankruptcy Code and became the first investor-owned utility since the Great Depression to declare bankruptcy.

The declaration of bankruptcy ended PSNH’s long downward economic spiral but did not win public support for the company or for the station. (PSNH sold the Seabrook plant in 2002. See below, 2000 and Beyond) Later, in a 1996 editorial printed in The Keene (N.H.) Sentinel, Guy MacMillin observed that the decisions—some good, some bad—that brought on the bankruptcy could “be traced to previous generations of New Hampshire politicians and legislators.” He pointed out three factors that had contributed to the bankruptcy. First, up until the moment of bankruptcy, state regulators and legislators had encouraged the Seabrook nuclear project. Second, the New Hampshire governor and the legislature, certainly aware that PSNH’s electric rates were among the highest in the country, had accepted the seven-year annual rate increases and the stipulation for recovery of stranded costs that were part of the NU deal. Third, according to MacMillin, state regulators and the legislature had required “that PSNH buy very expensive electricity from small wood-fired and hydroelectric power plants... to encourage those technologies and thereby guard against a future oil shortage or nuclear-power collapse.”

What ensued after the bankruptcy was a power struggle between the state of New Hampshire, PSNH management, and the Federal Bankruptcy Court. Exercising its exclusive right to reorganize after bankruptcy, in December 1988 PSNH chose to abandon state jurisdiction under NHPUC and restructure under the Federal Energy Regulatory Commission (FERC). According to the PSNH document titled New Hampshire’s Energy Partnership, the FERC “had a favorable record of allowing utilities to recover costs and increase rates as a result of investments in abandoned generating plants.” The state’s Anti-CWIP law, on the other hand, would have prevented PSNH and its investors from recovering any investment made in the Seabrook station.

By the spring of 1989 little progress had been made; the state transformed the bankruptcy into an auction open to reorganization plans of other competing utilities and major parties. Connnecticut-based Northeast Utilities (NU), one of the six major bidders, announced its plan in January 1989 and PSNH endorsed it in December of the same year. The plan was based on the revenues of a rate agreement that provided for seven annual rate increases of 5.5 percent from 1990 through 1996. The first 5.5 percent base-rate increase went into effect January 1990. The rate agreement projected that there would be no increase to rates in 1997, 1998, and 1999, and included a special mechanism for adjusting rates up or down, according to the cost for fuel and power purchased during the term of the agreement.

The rate agreement assured the $2.3 billion of new revenue needed to finance NU’s two-step plan to reorganize PSNH. As the first investor-owned utility company to fall into bankruptcy since the Great Depression, PSNH started the 1990s in major debt and with a tarnished public image. On May 16, 1991, PSNH completed step one of the NU plan, thereby ending its 39-month bankruptcy. Step two was completed June 5, 1992 and PSNH became a fully owned subsidiary of Northeast Utilities. NU paid approximately $2.3 billion to satisfy the bankruptcy claims of creditors and shareholders of PSNH; acquired responsibility for PSNH’s 35.6 percent ownership of Seabrook; and established a new subsidiary, the North Atlantic Energy Corporation (NAEC), which had Seabrook as its only asset. NU then owned all the stock of both PSNH and NAEC.

Throughout the bankruptcy proceedings PSNH had offered uninterrupted service to its customers. PSNH continued to rebuild the trust of its employees and of the general public. Company involvement became central to PSNH’s corporate culture; employee volunteers answered to needs across the state. In 1993, PSNH created The Economic and Community Development Division to highlight its focus on the business and ecological needs of the communities it served. PSNH also continued to produce The New Hampshire Economic Review, first published in 1970 as a compendium of statistics about the advantages available to businesses in New Hampshire. In 1993, PSNH received the Governor’s Volunteerism Award. From 1994 onward, PSNH collaborated with the New Hampshire Department of Resources and Economic Development to increase jobs and commerce opportunities. On an annual basis, the company provided funds for special projects, such as trade shows and the state’s Export Marketing Grants program.

PSNH also devoted substantial resources to meeting the requirements of the Clean Air Act. In 1995 PSNH retrofitted its coal-fired Merrimack Station’s 320-megawatt Unit 2 in Bow, New Hampshire, with an emissions-cleansing Selective Catalytic Reduction (SCR) system, thereby becoming the first power company in the nation to reduce coal-power plant emissions with SCR pollution equipment. The SCR system, a state-of-the-art technology brought in from Germany, treated the nitrogen oxides before they left the plant by converting them into non-polluting, natural elements. According to a PSNH newsletter, the SCR system “slashed the production of smog-producing … nitrogen-oxides emissions by 65 percent, the largest single-source reduction in New England.” PSNH’s efforts to reduce harmful emissions earned the U.S. EPA’s Environmental Merit Award and the Governor’s Award for Pollution Prevention. PSNH also formed a landmark alliance with the Audubon Society of New Hampshire, the N.H. Fish and Game Department, and the U.S. Fish and Wildlife Service, to operate the Fishways Learning Center next to the Amoskeag Falls Hydro Station in Manchester, New Hampshire. The Fishways included a fish ladder that, in the Spring, enabled visitors to watch through underwater viewing windows as anadromous fish—such as broodstook Atlantic salmon, river herring, sea lamprey, eels, and American shad—returned to their native waters to spawn. The Center provided year-round environmental educational programs and exhibits on the natural and cultural history of the Merrimack River.

As the deadline for ending the seven-year period of rate adjustments approached, the New Hampshire legislature introduced a bill to reduce PSNH electric rates and to end electric monopolies as early as in 1997. The subsequent law, effective May 21, 1996, directed the NHPUC to develop a statewide plan for restructuring electric utilities. In April and again in October of that year PSNH proposed a plan, dubbed Customers First, “to provide near-term rate relief for all customers and introduce choice of electric-energy suppliers within a reasonable time frame.” On February 28, 1997 the NHPUC issued its orders in a document titled Restructuring New Hampshire ‘s Electric Utility Industry: Final Plan, which established interim stranded-cost charges for PSNH and set January 1, 1998 as the date by which all customers were to choose an electric company.

In the mid-1990s, more than half the states in the nation—including the New England States, New York, Pennsylvania and California—were considering electric-utility deregulation. Although New Hampshire was “the state that led the charge into electricity deregulation,” according to the December 8, 1997 issue of Asset Sales Report, PSNH argued with state officials over deregulation because the company insisted that “stranded cost securitization be part of the state’s effort to deregulate utilities.” If that condition could be met, PSNH said that it could go ahead with deregulation in July 1998. Meanwhile, Hurricane Georges swept across Puerto Rico in September 1998 and knocked out power to 1.3 million customers. Over 60 PSNH employees joined other NU employees who traveled to Puerto Rico to restore electricity after what was known as “the worst storm to hit that Island in 70 years.” By December, electricity had been replaced.

In 1998 the company introduced the Grazing Power Project: more than a thousand sheep were used to reduce vegetation under power line rights-of-way. The four-legged tree-mowers ate the shoots of young trees that could grow up to interfere with power lines at various sites in New Hampshire and then went to Florida to spend winters effectively chomping on the invasive weed known as Kudzu. However—because upcoming deregulation might oblige PSNH to sell some of its facilities—in April 2003 the company opted to leave the sheep in their winter home.

During 1998–99, PSNH continued its commitment to protecting the environment by voluntarily finding additional ways—such as installation of more SCR systems, a new Electrostatic Precipitators (ESPs), new pipelines to burn natural gas—to reduce nitrogen oxide emissions at its three fossil-fuel plants (Merrimack Station, Newington Station, and Schiller Station). PSNH invested over $46 million to virtually eliminate any of the ash particles (the “smoke plume”) emitted through its Bow-based Unit Two plant. The ESP system captured the ash particulates remaining after the coal was burned, and deposited them in hoppers, from which they were recycled for use in concrete, construction, and roofing materials. PSNH also supported an agreement between New Hampshire and environmental organizations in the state for setting emission-reduction targets for multiple air-pollution emissions from power plants—especially for sulfur dioxide, nitrogen oxides, carbon dioxide, and mercury. PSNH became the first state in the union to set emission-reduction targets for these four major air pollutants. Under The N.H. Clean Power Act which became effective in 2001, these pollutants were to be capped according to U.S. EPA standards.

2000 and Beyond

In New Hampshire, the topic of deregulation had come to the forefront of public concern in the mid-1990s as customers complained about what they called some of the highest electric rates in the country. Ratepayers also claimed that they had no alternative to buying electricity from PSNH, because that utility had a virtual monopoly in its service areas. The original goal of deregulation was to lower rates by attracting other energy producers into the state to create a competitive climate, to oblige PSNH to sell its power generating plants—including its share of Seabrook Station as well as its fossil-fuel and hydro power generating plants—and to offer consumers a choice of energy providers. (Note: Some people thought that PSNH’s ability to generate, transfer, distribute and sell electricity gave it the power to become a monopoly.)

The N.H. Deregulation Bill, supported by both the Legislature and PSNH, was signed in June 2000 by then Governor Jeanne Shaheen and sent to NHPUC for implementation. When the Act went into effect May 1, 2001, customers could choose an alternative energy provider. In a reaction to the effects of California’s energy blackouts and price spikes, the Legislature modified the deregulation law so that PSNH’s divestiture of its power plants, except Seabrook Station, was delayed until February 2004. In 2002, PSNH sold its share of Seabrook Station to the Florida Power and Light Company and applied part of the proceeds of the sale to the refinancing of existing debt and the continuing reduction of electric retail rates by an average of 16 percent, compared to the cost of electricity in the previous year. The Seabrook sale eliminated the risks of nuclear operation in New Hampshire and enabled PSNH to reduce stranded costs, which would otherwise have been passed on to customers.

Another milestone occurred in December 2002 as Central Vermont Public Service, at the urging of Governor Shaheen, agreed to sell PSNH the assets and customer base of its subsidiary, Connecticut Valley Electric Company (CVEC), which served 13 New Hampshire communities along the Connecticut River in the western area of the state. Pending approval by the FERC, NHPUC and passage of enabling legislation by the N.H. Legislature, the sale was to be effective January 1, 2004. Closure of the sale was to resolve all of CVEC’s pending litigation issues over New Hampshire’s restructuring plan, provide rate relief to CVEC customers who would be moved to PSNH’s lower tariff rates, and enable the recovery of CVEC’s stranded costs. This was the first such acquisition by PSNH since its 1972 purchase of the New Ipswich Light Department.

More changes for PSNH occurred as the third millennium got underway. Members of the Legislature in late 2002 introduced legislation to again delay the sale of PSNH’s existing power-generation plants. PSNH supported the effort, arguing that the aging but still effective plants would ensure a continued source of low-cost power, compared to the independent market prices to which virtually all other New England utilities were subject. “If we sold the plants, the rates would go up and is that what we want?” PSNH President Gary Long asked during a 2003 interview with Foster’s (Portsmouth) Daily Democrat. “What [the bill] says is that we don’t have to sell for the sake of selling. We would keep those plants as long as they are of economic use to the customers.” The law delayed the sale until April 2006 and called for the NHPUC to then decide, based on economic impact on customers, when a sale should take place. Governor Craig Benson signed the bill into law April 23, 2003.

PSNH’s history was a microcosm of the evolution of electric utilities. Obliged to restructure under trying circumstances, PSNH showed remarkable resiliency. According to Fitch Ratings, PSNH’s credit profile was strengthened by the constructive resolution of electric restructuring issues in New Hampshire, a solid financial performance, and $575 million in total stranded cost securitization proceeds used to improve its balance sheet. PSNH could look ahead to continuing success.