Why New Hampshire Electric Rates Are Set to Jump Again
If you thought you're paying a lot for electric now, just wait until December.
New Hampshire state consumer advocate Donald Kreis said that the state's major electric utilities are requesting rate hikes that would take effect on December 1 if approved. Unitil has requested an increase to 26 cents per kilowat, Liberty has requested increases to 22 cents, and NH Electric Co-op 17 cents. The request by Eversource for 22 cents was already approved.
Why is an increase happening? Kreis said it's because the Public Utilities Commission has told the utilities to change their default energy rate every six months.
"They're basing their requests on bids that they have received from wholesale energy suppliers. The utilities have divested themselves of all of their generation assets. So when they need to acquire power for their customers, they go into the wholesale market, they put out an RFP, they get bids back, and they generally choose the lowest bidder," Kreis told Seacoast Current.
The wholesale numbers for natural gas have gone up, which is reflected in the price of retail electricity. Unitil has a hearing before the PUC Friday, and in Kreis' experience, he's never seen the PUC reject a proposed rate.
He thought Eversource's request was high until Unitil's proposal came was submitted.
"It's basically beyond the pale, it's unreasonable to ask electric customers in this state to pay that kind of rate for kilowatt hour of electricity. I mean, it will, it will just send people's electric bills through the roof," Kreis said.
The Proposed Increases Are Better Than the Alternative
It would actually be worse if the PUC were to reject a proposal, because Unitil would have to buy on the spot market. Kreis said the futures prices for electricity in the months of December, January, February, and March are going to be very expensive.
Kreis said another possible way utilities could help their customers would be to defer the higher costs by essentially loaning ratepayers the money and recovering it later, but they may not have the funds to do that.
The news gets worse for consumers if winter is colder than normal, as it would not only drive prices higher, but could stress the grid and cause rolling blackouts.
"So the question is why, and there's a pretty simple answer. We are way too reliant on natural gas to produce the electricity that New England uses. And therefore, among other things, we are very vulnerable to global disturbances in the natural gas market, such as the one caused when our friend Vladimir Putin decided to invade Ukraine," Kreis said.
In a video, Unitil spokesman Alec O'Meara said that there is not enough natural gas pipeline bringing supply to New England. This puts the region competing with Europe for liquified natural gas to supplement supply that's available.
"One thing we have done is work with local regulators to find a way to make our upcoming rate for an eight-month period as opposed to six months. We're hoping being able to spread those costs out a little bit more will help mitigate that cost a little bit," O'Meara said. "But we are still expecting high supply costs."
There are things consumers can do to get a lower rate and help with their bills.
"You can go into the retail market and see if there is another electricity supplier who's willing to give you a rate that's lower than 26 cents, and it's likely that there will be some such offers out there," Kreis said.
It will likely require a two-year commitment to a rate which gives customers long term certainty, but also the possibility that rates will come down. The offers available will vary by utility with more available for Eversource customers, the largest utility in the state with 70% of electric customers.
Kreis also suggested going to the website NHSaves.com for information on reducing energy use, rebates available for products, technologies, and resources that homes and businesses can take advantage of.
"And there are things that people can do, depending on your situation, to get more bang for your energy buck by becoming more efficient," Kreis said. "Everything from buying really energy efficient refrigerators if your refrigerator is ready to be replaced, to winterizing your house so it leaks less heat."