ML20198G048

New Hampshire Electric Cooperative 1997 Annual Rept

ML20198G048
Person / Time
Site:	Seabrook
Issue date:	12/31/1997
From:	Anderson F, Wixson E NEW HAMPSHIRE ELECTRIC COOPERATIVE, INC.
To:
Shared Package
ML20198F859	List: ML20198F851 ML20198F951 ML20198G012 ML20198G027 ML20198G035 ML20198G048 ML20198G068 ML20198G080 ML20198G102
References
NUDOCS 9812280284
Download: ML20198G048 (8)

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ELECTRIC CO-OP ,

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R any new atTiliates must operate under a strict code of conduct that assures the afTiliates don't has e an unfair SE Board Chair Ammal Report advantage over other companies in a competitis e i= environn'ent. Essentially, the new atriliates must act as separate companies complete with their own information E S Me @ M @chMd a systems. employees and places of business.

We believe that as a non-profit, member-owned So is the Law cooperative with no motive to generate prorit. the Co-op should be allowed to provide our members with products an s ces. We as 388% n wer wpMy, b In imes the are electric utility industry, changing. So is the '

addition to electric distribution. While we continue to law. Your Board of Directors is ' make this argument to the PUC, we must be prepared to proposing changes to the NHEC establish controlled affiliates under the present PUC rules Code of Bylaws that will enable to perform these functions.

the Co-op to keep pace with the The proposed bylaw changes will also allow the Co-changing times, from both legal on to offer products and services to members outside the $

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and business perspectives. '

. Co-op distribution ser ice territory, either through our You have received, or will Ed Wixson e. isting organization or affiliates controlled by the Co-soon receive, your annual ballots m the mail The Board of Directors encourages you t Co-op financially and reduce the overall average fixed vote "YES" on all three proposed bylaw ballot questions. cost of services for our members.

My report explains why we ask for your support. In addition to complying with the chancing law, we must change in order to ensure the Co-op ha's maximum The State law deregulating the energy supply portion flexibility to provide members with access to a broad of:he electne utih,ty mdustry, and re-regulating the distribution portion of the mdustry, was passed in 1996. range of products and services in a competitive market-Unfortunately, implementation of the law, and access t place. The bylaw changes proposed by your Board of less expensive electncity, has Seen blocked by the Pubhc Directors will allow the Co-op to continue providing Mi ctric service rePably, safely, e fficiently and Service Company of New Hampshire (PSNH) lawsui!

against the State. Despite the delay, the New Hampshire economically, while pros iding members with opportunities Public Utih, ties Commission (PUC) has been busy to receive new products and services from the company establishing rules and regulations that will dictate how own. Examples of these are aggregation ofpower the electric generation and distnbution functions will be supply, surge ~ safety protection, and home security. The separated, and how the competitive energy market wdl Mowing are our proposed bylaw changes:

operate when deregulation goes into effect. Question Nu mber One asks members to allow the The PUC envisions that, in addition to energy supply, Co-op to adopt the provisions of New llampshire's certain other functions related to providing electnc Consumers' Cooperative Associations Act, or state law senice traditionally provided solely by an electric RSA 301 A.This change would enable the Co-op to offer you products and services other than the sale and/or distributor, such as the Co-op, will eventually be per-formed by several organizations in the deugulated distribution of electricity. (See examples above.)

marketplace. The PUC's regulations prohibit utthties that Question NumberTwo simply allows the language in provide distribution service (the primaryjob of the Co- the Co-op's Code of Bylaws to be changed to reflect th, op) from directly providing energy, aggregation services' adoption of RSA 301 A as proposed in Question Number or any other services that are open to competition. Under One. Assuming passage of this first question, Question the PUC's rules, such services can be provided only Number Two is a housekeeping change.

through new organizations. Howcrer, these organi:arions Question Number Three allows your Directors to establish controlled affiliates. Some of these affiliates will P equ r s ha a 1 distribution utilities and perf rm functions traditionally provided by the Co-op,

but which new PUC rules require be performed by organizations other than an electric distributor in a About Your Cooperative deregulated marketplace.

The New Hampshire Electric Cooperative was As Chair of the Board of Directors, and with unani-established n 1939 when the first pole was set in mous support of the Board, I encourage you to vote tempster. Today, the Co-op has more than 4,90n miles of "YES" on these proposed bylaw changes.

energized line serving more than 69,000 homes and Our annual meeting is scheduled forTuesday, June 2, businesses. Our service territory includes all or part of 1998, at NHEC Headquarters on Tenney Mountain 118 towns in nine of the state's 10 counties.

Highway in Plymouth. Registration and exhibits open to The New Hampshire Electric Cooperative, Inc.'s all at 9 a.m. The meeting begins at 10:30 a.m. I look forward to greeting you there. headquarters is located on Tenney Mountain Highway in Plymouth and has district offices in Alton, Andover, Colebrook, Conway, Lisbon, Meredith, Ossipee, Plymouth, Raymond and Sunapee.

Eldwin A.Wixson, Chair NHECBoardofDirectors Your Board of Directors

.m1. Controlled Hot Water Program. lf you have an electric water heater of 40 gallons or greater and a monthly bill of more than $119, you could save more than $200 a year.

2. Home Energy Analysis identifies the location Direc year Eleven members serve on the Co-op's Board of tors. Directors serve rotati each At least three positions are up for election each Currently serving on your Board of Directors are:

Ed Wixson, Plymouth .

Robert Heath, Center Harbor..

Jerry Hopkins, Moultonboro .

Gail Paine, Intervale .

V m. .an Clark, Hampstead

.. Chair

..Vice-Chair

.. Treasurer

.. Secretary Roger Easton, Canaan and size of air leaks in your home and recom-Allen Gable, Meredith mends ways to reduce heat loss. If you have electric heat, you may be eligible for a free Home Robert V. Johnson, II, Moultonboro Energy Analysis and up to $1,000 in weatheriza- Chip Kimball, Center Sandwich tion rebates. Gary McCool, Rumney 3.The Better Bulb program offers rebates for the Thomas McGlauflin. Plymouth purchase of compact fluorescent light bulbs. l 1

These high-tech bulbs use 70% less electricity and last 10 times longer than incandescent bulbs.

4. ETS and Dual Fuel heating programs. If you have electric heat, you may bc eligible for the 42% discounted off-peak heating rate.

5.The Business Energy Analysis & improve-ments program helps you cut costs through lighting improvements and other measures.

To learn more call our Energy Services Depc. at 1-800-478-4328 f

and turns as many ups and downs as a drive on the Kancamagus Highway.

Mt711tTyft'S C0111111 Pills As the drama unfolds, New H mpshire ratepayers, including Co-op members, pay se e of the highest Lower Electric B*lls i electric rates in the nation. This c.umt staml.

we m meim e 9,g ho oea,mi,sien:To ,educeyeu, is Pr.iority #1 electric bills. Since 68% ofyour electric rate goes to purchasing power. the most efrective way to reduce your bills is to provide Co-op members with access to the

' T'he year started on a very , ,ji' ., competitis e marketplace and lower cost electricity supplies.

I h f mte when in February 1'- '

We are working on several fronts to achieve this goal.

of 1997 the New Hampshire -

First, we continue to petition the Federal Energy Public Utilina Commission *

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Regulatory Commission to enforce the Co-op power supply issued its plan for introducmg  :

contract with PSNH to permit the Co-op to implement the retail competition for electricity state law mandating competition. It's unconscionable that in the State, which would mean '

the Co-op should be fc,rced to buy electricity from PSNH at significant savings for Co-op Fred Anderson prices three times greater than available to the rest of New members. The euphoria didn't Hampshire consumers on the open market.

last long, however, as Public Ser ice Company of New Second, we will continue to ensure Co-op members' Hampshire (PSNH) quickly filed a lawsuit claiming that interests are protected in any negotiations between the restructuring plan would force it into bankruptcy. This PSNH, the State and the other stakeholders.

etTe::tively blocked ratepayers' access to the open market Finally, we will continue to pursue our Electric and reasonably priced electricity. Consumers Together proposal. It is the most beneficial Hope was renewed w hen the State of New Hampshire alternative on the table for bringing savings and choice to and PSNH opened negotiations to reach an agreement all New Hampshire ratepayers. Our proposal should serve that would move competition forward, while allowing as the yardstick by which to measure any deal between PSNH to recoup enough ofits so-called " stranded costs the State and PSNH. Any settlement should provide at to avoid insolvency. The Co-op fought for and won the least the level of savings and freedom of choice that Co-right to participate in the negotiations in order to ensure op members would realize under our plan.

that our memt ers' interests were heard-loudly We will also continue to pursue other avenues by The negotiations ended in deadlock. Meanwhile, PSNH which to lower your electric bills:

continued to export huge amounts of cash to Northeast

• The Co-op continues to promote energy efficiency and Utilities, its Connecticut-based parent company. conservation programs that allow you to use less electric-The tide shifted when the Co-op made its historic ity without sacrificing comfort or convenience. Our

" Electric Consumers'!ogether" proposal to acquire programs help individual residential and business PSNH's transmission and distribution system and payofT members reduce their electric bills by investing in energy its stranded costs claims for $ 1.4 billion. Lawsuits would etTicient technology. Reducing system-wide peak demand be dropped, breaking the .ogjam and allowing New also generates downward pressure on our overall pur-Hampshire consumers, finally, to purchase reasonably chased power costs, to the benefit of all members.

priced electricity on the open market. PSNH raised . Ihe Maine Yankee Nuclear Power Plant has been

" objections" abouc the validity of our offer, which we closed, yet the ow ners (PSNH among them) continue to could only interpret as another delay tactic to allow them charge the Co-op for shutdown costs even though they to continue reaping huge profits at the expense of New can no longer rupply us with power. We have refused to Hampshire ratepayers. pay these unwarranted charges and will continue to do And so it went in 1997. The fight for retail competi- so.

tion for electricity was one riddled with as many twists . The Ca-op is seeking the refund of $10 million that

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• y PSNH has overcharged the Co-op. PSNH passed on costs to the Co-op, which accounted for the major share of our '

, e latest rate increase, while it didn't pass on the same costs to its other customers. Also, PSNH passed on to us the .

costs for producing power to sell to its Northeast Utilities '

e affiliate in Connecticut, but didn't pass back the resulting revenues. This refund would reduce rates by 10-1.1%.

+ We are working on an arrangement to purchase power

' from a waste-to-energy plant in Rochester. Yet, PSNH claims we cannot access that lower-priced power despite a specific provision for such power in our contract. ---j.

About 30% of your electric rate is for transmission and distribution-the cost of getting electricity to your home or business. We've kept a tight lid on these costs a

despite increasing business expenses and flat member

, growth, which has permitted us to avoid increasing rates ,

for these purposes for more than two years. We've streamlined and become mere efficient, reducing the number ofemployees from 210 in 1993 to 204 in 1997,while

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' increasing the number of members served per employee by more than 10% during this period. >

Yet the cost of doing business has increased. In 1998 y ' ,,

we are requesting an approximate 5.75% increase in rates *

, , that essentially reflects two years ofinflation, plus some

' of the costs related to preparing for retail competition. It is expected that PSNH will pass on additional costs to the Co-op that could push that increase into double digits.

In 1998 we will begin "unbundling"your electric bills

• so you will see exactly what portion ofyour bill goes for 9 m

• the purchase ofelectricity (96% of which now comes from PSNH) and how much i t costs to deliver that energy to '

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your home or business, as well as breaking out other charges. This should prove a useful tool by allowing you -

to compare apples to apples w hen purchasing electricity ,p ,

• from competing suppliers in a deregulated marketplace.

The road to retail competition is proving a difficult

' ' one. But it is a path that will establish the direction of the

- e Cc op for years to come and one we are committed to

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- j . v, o

' Fred Anderson

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CEO: General Manager '

New Hampshire Elec BALANCE SHEET Assets , . , December 31

, _1997 i 1996 UtilityPlant $276,329,678 l $266,730,480 Less: Depreciation id 72.146.479 ! 65.868.644 Net Utility Plant  !$204,183,199s ' $200,861,836 Cash and Cash Equivalents  : Jil,378,149 ; 664,296 Investments #L7,013,0181 5,390,216

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Accounts Receivable-net S 17,671,292 13,865,122

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Materials and Suppliesinventory y ;';1,985,992 i 2,196,453 Deferred Charges 45,437,036 OtherAssets ' 'd0,6,81,733

' l.070.196 j]} l1.287 Total Assets $273.983.579 j $269.326.246

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LIABILITIES y.

REA & CFC Debt . $242,619,548 j S243,451,956 Other Debt Mp7,368,505 j 6,866,499 Accounts Payable ,, 114,211,078 ei 12,380,558 Accruedinterest and expenses i4,544,094 [ 4,125,497 OtherCurrent Liabilities T' .580,683 l 583,728 Noncurrent Liabilities 1,541,604 ; 1,644,572 Patronage Capital '(3,896,377) j (4,842,747)

Deferred Credits '7.313.545 j 5.116.183

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Total Liabilities $273.983.579 i $269.326.246 -

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c McNeil & Parker10lf=0 Middle' Street,)s vortland, ME 04 l' 4711UO. Copies of the complete pu .m, ..,w.c am .qc o. _ .

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fire on file with the Nes HarnpsN:e,pNblic Utilities Commission in Cone'ord, NH,'and at New["

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HISTORICAL DATA 1997 1996 1995 l' KILOWATT-HOUR SALES:  !

Residential 1364,117,505 366,871,907 362,337,092 Commercial & Industrial  ? 231,901,856 ; 226,925,124 226,068,622 l l

Street & HighwayLighting  :. 1,553,322 1,541,811 1,448,087 TOTAL j597,572,683. 595,338,842 ;j 589,853,801 j'

Increase / Decrease 4 0.9% 0.5%

0.4%; 1 REVENUES FROM SALE OF KWH: - -

Residential fS49,995,924 t $50,535,840

} Commercial & Industrial 5-}$27,665,974 :.]j $27,133,544

$50,824,011

$27,306,364 Street & HighwayLighting $348,839 i $344,352 $348,699 TOTAL , $78,010,737 $78,013,736 $78,479,074 Increase / Decrease E ' -0.0% j -0.6% 3.6%

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AVERAGE REVENUE PER KWH SOLD: ' l Residential '

$0.1377

$0.1373 l $0.1403 Commercial & Industrial $0.1193 1 $0.1196 $0.1208 Street & Highway Lighting $0.2246 i $0.2233 $0.2408 TOTAL $0.1305 1 $0.1310 $0.1330 Increase / Decrease -0.4% . j - 1.5 % 3.1% _

AVERAGE NUMBER OF CUSTOMERS:

j Residential l58,7961 j 57,900 57,365 Commercial & Industrial i.8,204 l 8,070 7,953 Street & Highway Lighting TOTAL 448 j 43 43

67,048.; y 66,013 65,361 Increase / Decrease l.0%

jl.6%:< 0.4%

AVERAGE KILOWATT HOUR USE: ,

Residential -

"6,193 6,336 6,316 Increase / Decrease 92.37o'y . 0.3% -3.3% F

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KILOWATT-HOURS PURCHASED (BY VENDORS): E J,N Public Service Co.ofNH 619,050,403 f- 577,697,364 604,335,190 Green Mountian PowerCo. ,,/2,054,330; , 2,060,230 2,023,420 New England Power Co. i 6 445,300: 6,308,900 6,112,300

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OPERATING STATEMENT Revenue . . . , ,,

December 31 a1997. d. 1996 I . 78,806,994 79,474,971 Operating Revenue j 4{ ' 15,877,955; 14,620,253 J Sales for Resale

!. : 1.599.201L 1.438.001 Other Total Revenue [ ;96;284.150' 95.533.225

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Expenses y December 31

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?ji; 49,743,989; 49,229,776 Cost of Power

} 8,086,423 l

Operations and Maintenance {Mj i 9,946,415i 8,599,261 Depreciation

}; J;{8,862,287;

,058,85.3( 3,815,834 Taxes Customer, Administrative, and General . 101525.891' 9.800.454 <

19.531.748 Total Operating Expenses 4 : '83.137.434 M 16.240.814  : 16.243.619 Interest Expense and Other Deductions ~

($ ($3,094,098). ($242,142)

Operating Margins 1,083,775 OtherCapitalCreditsandPatronageDividends [ ~ 0%606,355l Allowance for Funds Used During Construction l'..

• 268.666- 184.547 1,026,180 Net Operating Margins ] (1,g19,077)-

- 2.165.446 l 3.782.035 Nonoperating Margins NET MARGINS ;

'S946.370: $4.808.215

., f 7, L.mc_J:L di To Learn About the Co-op's Energy & Money Saving Programs . . .

9 Call the Energy Services Dept. at 1-800-478-4328 and ask about Co-op Home Services.We have several pro-grams that can help you reduce electricity consumption g HOME in your home, save money and help the environment. JJ SERVICE

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establish controlled affiliates. Some of these affiliates can be affiliste'd with the Co-op.

perf rm functions traditionally provided by the Co-o The PUC requires that all distribution utilities and

MaineYankee Atomic Power Corp. 0 36,035,4II 1,405,982 OtherSuppliers 9,885 i 24,165 84,922 TOTAL 643,445,465. ' 638,204,712 629,022,784 Increase / Decrease (0.8% : j 1.5% -0.4%

COST OF KILOWATT-HOURS PURCHASED: - ,

) 5 Public Service Co.ofNH $47,238,520 $47,179,677 $51,696,145 ~

Green Mountian Power Co. f $12_5,260 g $128,560 $121,037 New England Power Co. i,$418,840 # $398,802 $389,860 Central Vermont Public Service Corp. , ;$5.75,352h $577,500 $420,457 NEPOOL(Load Dispatching) i f $75,796,:,2 MaineYankee Atomic Power Corp. l$ ' 56,137G* $ 1,418,271 $ 1,564,123 Other Suppliers TOTAL '

?? . $5963 $1,451 $4,828

$49,491',l50l d $49,704,261 $54,196,450 Increase / Decrease ":%0A%:

-8.3% 7.2%

_. i AVERAGE COST PER KWH PURCHASED: '

Public Service Co.ofNH  ?$0.'07d3 $0.0817 $0.0855 i Green Mountian Power Co. $0.0610) ; $0.0624 $0.0598 New England Power Co.

,4 $0.0650 S j $0.0632 $0.0638 Central Vermont Public Service Corp.  : 50.0362 .] $0.0359

, $0.0279 MaineYankee Atomic Power Corp. >

$0.0394

$0.0000 d $1.1125 OtherSuppliers $0.0603 1 $0.0600 $0.0569 TOTAL 1$0.0769 i $0.0779 $0.0862 .

Increase / Decrease M-1.2%. q -9.6% 7.6%

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l'99$ '. 1995 l MaximtsdlSDe~mirYdForShsidm1 3 W 'Ili4,715 *

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Lohd%ctor. [., , j4.6%j.. s.M5.' 0 5 , :,i~ [.,158,'576 INumberofEmployees,[,1f4Q' , 16, .. , 1

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,7202..p.y,s: f 207a ...t, 45 3k

, .212

NumberofCusto'n6rs r PerErnployee Q 3332 n ,

319=f ,<

.x2308

' Total Miles 'of Line ? End 'of Year Lm GM

~ n4,917wN:,74,867 m c4,809 -

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[UncoUebtibleAdbouritsWrittiriOffMD> >  :$419'3I2NN$413,9223 '*$472,872

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r Cu,s. .: . ,V ' '5 tomer $36 u.

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• C5t'ofPoher/ Sales TM$fR *pensePe. ,'" .

!. cst.0768I.fG$1.',0720 $.$1.0664 1-800-478-4328

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