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1997 New Hampshire Attorney General Reports and Opinions 1 (1997)

handle is hein.sag/sagnh0001 and id is 1 raw text is: January 13, 1997 Douglas Patch, Chairman Public Utilities Commission 8 Old Suncook Road Concord, New Hampshire 03301 Re: PUC Opinion Request dated December 12, 1996 regarding RSA 374:3-a Dear Chairman Patch: This letter is in response to your request dated December 12, 1996 for an opinion of the Attorney General pertaining to RSA 374:3-a. Specifically, you request an opinion as to whether the Commission's draft rules regarding alternative forms of regulation are contrary to RSA 374:3-a. Your inquiry questions whether the proposed rules: 1. are unlawfully discriminatory; 2. can provide that the PUC has authority to initiate alternative regulation proceedings on its own initiative; 3. can provide that the PUC can impose conditions on its approvals of utility initiated petitions for alternative regulation; and 4. provide, as required by RSA 374:3-a, that utilities will be afforded an opportunity to realize a reasonable return on their investments. For the reasons set forth below, it is our opinion that the proposed rules do not unlawfully discriminate among similarly situated utilities and that the proposed rules conform with RSA 374:3-a and are otherwise lawful. This opinion is based on a review of the proposed rules, of the record before the Joint Legislative Committee on Administrative Rules (JLCAR), of the express language and legislative history of RSA 374:3-a and of other pertinent law. RSA 374:3-a provides as follows: Alternative Forms of Regulation; Incentive Regulation. Upon petition of a regulated utility or upon its own initiative and after notice and hearing, the public utilities commission may approve alternative forms of regulation other than the traditional methods which are based upon cost of service, rate base and rate of return, provided that any such alternative results in just and reasonable rates and provides the utility the opportunity to realize a reasonable return on its investment. The proposed rules, set forth in Attachments A-1 and B, are generically worded, apply equally to all utilities, provide for applicable procedures and criteria pertaining to proceedings initiated either by the PUC or by a utility in accordance with RSA 374:3-a, and provide for an opportunity for an affected utility to 'realize a reasonable return on its investment.' Attachment A-2, p.1. 1. The proposed rules treat like entities in a similar manner. Both RSA 374:3-a and the proposed rules are on their face equally applicable to all utilities. You have asked whether the rules create an unlevel playing field for utilities. This concern relates to whether the PUC can initiate alternative regulation proceedings or if it can impose conditions on its approvals of utility proposals. The statute expressly provides for proceedings initiated by the PUC. The rules, in conformance with the statute, expressly provide for PUC initiated proceedings. It is also our understanding that certain utilities object to the rules because, under the rules, the PUC could either on its own initiative force a utility to accept alternative regulation or could impose conditions on a utility proposal (Att. C, pages 16-17). Despite this objection, both results are permissible under RSA 374:3-a, as set forth below.

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