## Facts

- The New Hampshire Public Utilities Commission (PUC) opened an investigative docket on grid modernization pursuant to a legislative directive.
- The proceeding focused on investor-owned electric distribution utilities’ distribution planning (not generation or competitive supply).
- Commission staff convened a working group with stakeholder participation to develop recommendations on distribution planning, non-wires alternatives (NWAs), distributed energy resources (DERs), data access, and rate design.
- Background conditions included rising transmission and distribution costs amid limited sales growth and changing technologies (energy efficiency, storage, demand response, distributed generation, and electric vehicles).
- Staff recommended rate-design principles emphasizing fairness, efficient price signals, DER-aligned incentives, consumer protection (including vulnerable customers), and cost-causation.
- The Office of the Consumer Advocate proposed a “customer-equity” approach under which certain incremental grid modernization costs could be allocated based on marginal benefits accruing to particular customer classes.
- Stakeholders raised concerns about data transparency, integration of NWAs into planning, avoiding cost shifts between DER participants and non-participants, and protecting low-income customers as rate designs become more granular.
- The PUC issued Order No. 26,358 as both (1) a guidance document on distribution system planning and (2) an order requiring continued investigation in follow-on proceedings.

## Issues

1. What principles and expectations should govern electric distribution utilities’ distribution system planning in light of grid modernization, DER growth, and changing customer usage patterns?
2. To what extent should utilities treat DERs and NWAs as planning resources rather than defaulting to traditional wires investments?
3. How should rate design and cost allocation evolve to reflect cost causation, provide efficient price signals, address potential cost shifting, and protect vulnerable customers?
4. Which topics require continued investigation and development in subsequent, more targeted dockets rather than immediate prescriptive requirements?

## Decision

- The PUC adopted a formal guidance document setting expectations for a shift toward integrated, forward-looking distribution system planning responsive to new technologies and customer needs.
- The PUC concluded an initial phase of the legislatively prompted investigation but ordered continued investigation of specific topics in subsequent proceedings.
- The PUC did not impose immediate, detailed tariff or rate-design changes; implementation details were reserved for later dockets (e.g., rate cases and targeted investigations).
- The PUC indicated that equity concerns, data needs, and DER/NWA integration warrant further development on a more detailed record.

## Legal Principles

- Distribution utilities’ planning should be forward-looking and explicitly incorporate DERs, electrification, and demand-side resources rather than relying primarily on historical load trends and conventional engineering solutions.
- DERs, demand response, and NWAs should be evaluated as potential means to meet system needs, alongside traditional capital investments.
- Rate design should reflect cost-causation principles and provide efficient price signals that guide economically efficient consumption and investment decisions.
- Modernization-related rate and planning reforms should preserve fairness between utilities and customers, mitigate undue cross-subsidies, and protect low-income and otherwise vulnerable customers.
- Where modernization investments yield uneven benefits across customer classes, the Commission may consider benefit-based equity approaches, but methodological choices require further investigation before adoption as binding policy.
- The Commission may use guidance and phased investigations to set policy direction while deferring prescriptive standards to later proceedings with a more developed evidentiary record.

## Conclusion

The PUC set statewide expectations for modern distribution system planning that accounts for DERs and NWAs, emphasized cost-causation and customer protections in prospective rate design, and directed continued investigation to develop concrete standards and implementation mechanisms in subsequent dockets.


Elec. Distrib. Utils.: Guidance on Util. Distrib. Sys. Plan. & Ord. Requiring Continued Investigation, 2020 WL 3077501 (N.H. Pub. Utils. Comm’n May 22, 2020)