As directed by the state legislature, the New Hampshire Public Utilities Commission (PUC) has issued a preliminary plan to restructure the state's electric industry. The plan would: 1) establish a competitive generation market using bilateral contracts and one or more voluntary power exchanges, 2) create an independent system operator to maintain reliability, 3) separate generating and retail marketing from transmission and distribution (T&D), 4) encourage divestiture of generation from T&D, 5) set cost-based, nondiscriminatory, open-access T&D services and rates, 6) set nonbypassable interim charges to recover a portion of stranded costs if bundled rates exceed the regional average, 7) require distribution companies to provide default power services, 8) establish minimum customer safeguards and protections, and 9) allow competitive service providers to deliver energy-efficiency programs. The PUC hopes to issue a final plan by February 28, 1997; retail choice would begin January 1, 1998. Utilities must submit a comprehensive compliance plan no later than June 30, 1997.
Market Structure. The PUC finds that a market governed by bilateral contracts would bring the most economic benefits over the long-run, but it adopted a hybrid model that includes a voluntary power pool. It notes that while large-volume users can negotiate lower prices, smaller-volume customers need a power exchange where prices are more transparent and the complexities and costs of market transactions are minimized.