New Hampshire Electric Co-op

The Budget, Finance & Rates Committee meeting focused heavily on the Co-op Power/Regional Access Rate Change projections for February 2026. Staff updated projections indicated a potential $5.5 million under-recovery balance due to colder than normal weather in November and December 2025, impacting load and spot market prices, resulting in a need for a significant upward adjustment in the embedded charge for Co-op Power. The committee voted to recommend that the Board authorizes staff to set the Co-op Power and Regional Access Charges on a bills-rendered basis effective February 1, 2026. Additionally, the committee discussed the Fall 2026 Power Purchase Plan and Schedule Proposal, recommending a strategy to hedge 67% of the total load, while noting current market prices are high. The committee also voted to recommend that the Board support a strategy for long-term, five-year purchase contracts, seen as advantageous for cost reduction and hedging future volatility. Finally, potential areas for focused budget deep dives in 2026 were discussed, including challenging property taxes, vegetation management (tree trimming/burying lines), company benefit packages, and the use of Artificial Intelligence (AI) in governance.

The Funds Management Committee meeting focused primarily on the Revision of the Plan Policy concerning the New Hampshire Electric Cooperative Post-Retirement Benefit Plan. Discussions included the history of the plan, the termination of the associated trust fund in 2006, and the current pay-as-you-go approach for retiree health benefits. Key proposed revisions included simplifying the plan to govern obligations by existing agreements, eliminating obsolete references, and clarifying staff authority over Exhibit 1 (the statement of benefits). The committee also discussed the establishment of two dedicated reserve funds using proceeds from the terminated trust: one for retiree health benefits and one for major storm reserve, with a consensus to recommend a 50/50 allocation to the Board of Directors. Furthermore, the committee discussed potential custodians, recommending Homestead Fund for presentation at the next meeting, and confirmed that the most recent investment policy would be circulated for review.

The Board of Directors meeting involved several key actions and discussions. The consent agenda was approved with an amendment to correct the year cited in a report on inflation from 2000 to 2020. In the Chairman's Report, updates were provided on FEMA legislation and two permitting reform acts that passed the U.S. House, including the Speed Act. The Executive Committee recommended and the Board approved modifications to Board Policy B-5, General Counsel, to clarify the counsel's role. The Budget, Finance, and Rates Committee secured approval for updated energy rates effective February 1, 2026, comparing favorably to competitor utilities. Furthermore, the Board authorized staff to negotiate a long-term power purchase agreement (not exceeding five years, 7.5% of forecasted load, and a price cap of $70 per MWh) and to pre-purchase the remainder of hedging requirements via short-term contracts. The CEO Report highlighted significant 2025 accomplishments, including financial performance (YTD margin of $9.4 million), and the Board authorized the Chair to send a letter of appreciation to staff. The CEO was also authorized to execute the annual state training grant application, typically worth around $80,000 annually. Discussions also focused on educating policymakers about the cooperative model. The NRECA report noted high performance in DC advocacy and the selection of a new external auditor. The NHEC Foundation reported progress on consolidating accounts and developing the Round Up Program. The meeting concluded with an executive session to discuss legal litigation, confidential broadband, and personnel matters.

Key discussions during the meeting included the approval of consent agenda items and various committee reports. The Chairman's Report addressed employee commendations and pending solar and permitting legislation. The Special Board Meeting on January 6, 2026, involved selecting a Nominating Committee and discussing legislative matters. The Executive Committee Meeting on January 15, 2026, reviewed revisions to Board Policy B-2 concerning the establishment of a Funds Management Committee, and the Board approved changes to the Bylaws Term Limit (Option 2), establishing a 15-year maximum tenure for directors. The Budget, Finance, and Rates Committee minutes from December 12, 2025, were approved. The Funds Management Committee discussed transferring funds and creating new funds for retirement obligations and storm costs. The Strategic Planning Steering Committee reviewed board feedback and developed preliminary strategic issues. The President/CEO reported on safety, PUC nominations, higher energy market prices, the failure of PJM's recent capacity auction, and addressed questions regarding A&G budget variances due to open positions. The Board approved the 2026 Balanced Scorecard and Success Sharing Plan, and granted approval for entering into agreements with Emera Energy Services, Inc., contingent upon a Parental Guaranty, as Emera did not meet the investment grade credit rating criteria. The preliminary year-end financial results showed record electricity sales and a preliminary net margin for distribution of approximately $10.9 million. The session concluded with an executive session to discuss legal litigation, confidential broadband, and personnel matters.

The Funds Management Committee discussed the recommendation to use Homestead as the new custodian, weighing concerns regarding their fee structure and performance against the advantage that their fees are incorporated into expense ratios rather than external advisor fees. The Committee voted to transfer funds to Homestead. Furthermore, a decision was made to split retiree benefits and storm reserve funds equally (50/50 split). The Committee reviewed and discussed several proposed changes to the Investment Policy, including updating entity names, adjusting investment mix tolerances, and altering review frequency. The committee also discussed the auditor's recommendation regarding adding or removing funds from the storm expense fund based on budget margins, which would require Board action and careful accounting considerations regarding regulatory liability and capital credits. Action items included uploading the retiree benefit plan draft, contacting Homestead, redrafting the Investment Policy, and drafting a new policy for the storm fund reserve and post-retirement benefit reserve.