PUC to Consider Ending Liberty 'Fixed Price Option'

In response to concerns raised by the Office of the Consumer Advocate, the New Hampshire Public Utilities Commission announced on December 21 that it will consider ending the “fixed price option” (FPO) currently offered by Liberty to its gas customers in the state.

“Residential customers like price stability, but this flavor of price stability is fundamentally unfair,” said Consumer Advocate Donald Kreis.  “With its Fixed Price Option, Liberty is basically asking its customers to bet against each other.  That’s a lose-lose proposition.”

The announcement from the PUC that it would open a docket in 2024 to consider the future of the Fixed Price Option came in an order denying the OCA’s request to pull the plug on the program for the winter already in progress.  “[T]he proper forum for the OCA’s arguments is a new, separately noticed docket to consider amending . . . Liberty’s tariff to eliminate the FPO program on a prospective basis,” the PUC ruled.

Kreis explained that, unlike fixed-price programs offered by unregulated fuel dealers, the Liberty FPO program does not involve trading risk between the buyer and the seller, with the buyer acquiring price certainty at a premium and the seller having to eat any increases in wholesale prices.  “Here,” noted the Consumer Advocate, “Liberty is always made whole by its customers for any costs incurred for buying natural gas at wholesale – so, in effect, the customers are just trading risk with each other.”

The roll-out of the current FPO program by Liberty was riddled with difficulties.  The upshot is that the PUC ended up approving a higher rate than the one offered by Liberty to its customers by letter in September.  “What a mess,” said Kreis.  “If your utility writes you a letter offering you a particular price for the winter, you ought to be able to depend on it.  My inbox was flooded with complaints from angry Liberty customers.  The whole program is flawed, and I intend to convince the PUC to eliminate it before next fall.”

Read the December 21, 2023 order of the PUC here.