Northeast Utilities is threatening to sue if New Hampshire goes forward with a plan to make electric utilities compete for customers beginning in 1998.
NU, of Berlin, Conn., said the state's preliminary plan for introducing competition ''is transparently directed against the legal and economic interests'' of Public Service Company of New Hampshire, which is owned by Northeast.''The state is at risk for the payment of hundreds of millions of dollars of damages'' if it forges ahead, NU lawyers say in a letter made public Monday. New Hampshire Attorney General Jeffrey Howard said the state will fight.
''We believe the New Hampshire Legislature did the right thing and the Public Utilities Commission did the right thing and we intend to march forward,'' Mr. Howard said.
At issue are an estimated $1.2 billion in ''stranded costs,'' mainly money that Public Service sunk into its costly Seabrook nuclear power plant in the 1970s and '80s. Those debts forced Public Service into a bankruptcy reorganization that ended when NU bought the company, including its share of Seabrook, in 1989.
Manchester, N.H., lawyer Robert Backus, a longtime Seabrook foe, said the real issue is financial weakness that has made NU's stock drop in value by about 50 percent in a year. The company's own Millstone and Connecticut Yankee nuclear plants are out of service, Mr. Backus noted.
''They're in trouble,'' he said.
Though Mr. Howard said he takes the threat of a lawsuit at face value, Mr. Backus, lawyer for the Campaign for Ratepayers Rights, said the threat may be part bluff.
''I don't think they've got the ammunition to shoot us with,'' he said. ''I think they're aiming an empty gun.''
Public Service's rates are among the highest in the nation, with typical residential bills often topping $70 a month. This year, with broad, bipartisan support, the state enacted a competition plan that began in the spring with an experiment involving a small number of customers.
New Hampshire is among the leaders in the move to bring competition to the electric utility industry. The competition experiment encompasses 17,000 residential, commercial and industrial customers statewide.
Last week, the Public Utilities Commission released a draft plan for introducing full competition. It would require utilities to separate generation, transmission and distribution functions to create more competition. The plan envisions limits on how much utilities could charge customers for their stranded costs such as the Seabrook investment, a sore point with Public Service and NU.