NH State Representative Steven Smith

VOSE: A Slap in the Face to N.H. Ratepayers – NH Journal

VOSE: A Slap in the Face to N.H. Ratepayers

Posted to Energy June 30, 2022 by Michael Vose

New Hampshire consumers depressed about high gasoline prices will soon get an unwelcome slap in the face. Electricity prices will increase as much as 50 percent or more in the next few months because high natural gas prices have fueled an increase in regional electricity costs.

According to New England’s grid operator, in 2021 natural gas and electricity prices reached their highest level since 2014. Furthermore, the winter of 2021-2022 saw average real-time electricity prices hit $105.48 per megawatt hour, compared to $51.66 in the winter of 2020-2021.

Much of the region’s power gets generated by gas-fired plants. As gas prices rise, the cost of electricity follows. The upward trend in natural gas prices has worsened in 2022 with the world demanding more natural gas from the U.S. due to the Ukraine-Russia conflict. As a result, electricity prices in New England were high this winter and have remained so going into the spring/summer season.

Electricity from Eversource and Liberty will top out at 22 cents per kilowatt hour this summer and fall and the N.H. Electric Co-op’s rate will jump to 17 cents. That’s twice the cost from the past six months. That means an increase in an average utility bill of over $70 a month.

Any ratepayer can switch from their current utility to a retail competitive supplier. Such a switch can save most of that average $70 increase, but only for a specified contract period. Then, even those rates will eventually increase.

But other factors also contribute to the rising cost of electricity. The most recent auction for carbon credits from the regional greenhouse gas initiative (RGGI) came in at $13.90, an increase from $7.97 just under a year ago. Even though high auction prices mean N.H. will get back more money to rebate to ratepayers, those auctions lock in further increases in the cost of electricity. Republican legislators in Concord averted an effort by Democrats in this past session to take RGGI rebates away from electricity ratepayers. Those rebates help offset any rise in the cost of electricity.

Adding to these inflationary pressures, the federal energy regulatory commission (FERC) just approved a plan to phase out a reliability market rule, called the minimum offer price rule or MOPR, that could lead to the premature closing of nuclear and gas-fired generation plants across the region. N.H. abstained from a vote on eliminating the MOPR, which was effectively a vote against it. But the region nevertheless voted in favor of allowing more renewable energy projects to receive reliability payments despite their dependence on variable and unreliable weather for power production, which will increase reliability costs for backup generators.

The cause of rising energy costs in New England comes from both inside and outside the Granite State. Here at home, efforts over the years to block hydroelectric transmission corridors and natural gas pipelines put us on a path to fuel and power shortages. Much blame also rests with the current federal administration’s policies that either prohibit pipelines, like Keystone XL, or make gas pipelines harder and more expensive to build. Worryingly, some observers predict that non-NH state energy policies that favor green energy over more reliable sources may eventually cause costs to go up for Granite State ratepayers, too.

Some progressives will claim that the high cost of electricity results from a paucity of renewable energy. But government-mandated programs like the renewable portfolio standard that promote renewables add costs to every electric bill. The fuel for renewables might be cheap, but the infrastructure needed to capture that energy is both expensive and, critically, weather dependent.

Meanwhile, NH lawmakers this year put guardrails in place on energy policies like energy efficiency and municipal net metering that can drive up costs precipitously if not carefully managed. The benefits of such programs need to be meticulously weighed against their costs to find the right balance.

Conservative policymakers will continue to prioritize policies that make electricity both affordable and sustainable. But in the meantime, ratepayers need to be prepared to turn the other cheek.

About the Author

Michael Vose

Rep. Michael Vose (R-Epping) is chairman of the House Science, Technology, and Energy committee.

This August the State of New Hampshire will be seeing large increases in electric rates. Eversource will be increasing their rates by over 50%, and other utilities in the state will have similar increases.

There is a tool Granite Staters can use to shop their electric energy provider. While there is only one utility that can deliver the electricity to you, you have choices when it comes to who supplies you with the electricity you use. There are many companies – competitive energy suppliers- registered to supply energy to your home or business.

Your electric bill consists of two parts- delivery service and the electricity you use, which is your energy supply service. Your electric utility delivers electricity to you and all customers within its defined service area. The energy supply portion of your bill is for the electricity you use in your home or business. You may continue to buy your energy supply from your electric utility, or you may choose to buy your energy supply from a competitive energy supplier.

If you decide to choose a competitive energy supplier, you will still be a customer of your electric utility for the delivery of electricity to your home or business. Your utility company will still be responsible for restoring power if there is an outage. What will be different is that you will now also be a customer of a competitive energy supplier for the actual electricity that you use.

If you are interested in shopping electric rates, the tool can be found here: https://www.energy.nh.gov/engyapps/ceps/shop.aspx

At that site, you can view the current electric rates, and how long that rate is good for, should you choose to lock in that rate with a contract. Remember, it is important that you read all the terms and conditions of the contract carefully, make sure you select a fixed rate plan with a specified length, and understand what happens when the contract ends.

Additionally, six months from now, Eversource and other utilities will reset their rates. There is always a chance they could go down, but there is also the chance they could go higher.

If you have additional questions, the Department of Energy has a Frequently Asked Questions document on their website that covers most questions you may have. https://www.energy.nh.gov/consumers/choosing-energy-supplier/choosing-energy-supplier-frequently-asked-questions

There are growing reports of an imminent doubling of electric production rates. Just what we needed, right? As an example, here is an estimate on Eversource power from the Union Leader:

“A typical home using 600 kilowatt hours of power each month will see a bill increase of approximately $71.39 per month, according to a statement from Eversource, with the price of electricity soaring with the price of the natural gas much of New England uses to generate power.“

https://www.unionleader.com/news/homes/eversource-set-to-double-price-of-electricity-for-nh-customers/article_a54a8d0e-c267-5d61-a7a5-76fd9ebfdd38.html

See if you qualify for assistance – https://www.scshelps.org/energy-assistance/

Politicians are already using this as a lever to pitch pet projects like solar and wind. Yes, we need to diversify the grid. No, that will not help you in the near future. Efforts to incentivize wind and solar have always had a couple of problems. The first is that the investment usually drives up your electric rates. The classic example was a “net metering” proposal that would have allowed micro producers to sell their excess electricity to the grid at retail prices. Every other source is at wholesale. This makes that local power more expensive and raises your rates. Not much of an incentive. The second is pitching specific types of alternate energy sources for political, not engineering, reasons.

We need to be doing two things right now

The state has to find ways to increase energy assistance to NH families right now, before winter. These rate increases are happening. Broad policy discussions about the future landscape of the NH is irrelevant to your immediate crisis. We need to create a state program using surplus funds that is administered alongside LIHEAP. The income guidelines also need to be adjusted upwards due this unprecedented increase in fuel and electricity prices. It really comes down to the simple fact that nobody was able to plan for this, and you need the help now. Help means money.

For the future, we need to stop promoting solar and wind, or any other specific source. We should be listening to engineers and experts tell us what makes sense for specific locations. Cults of interest in specific power sources stall long term policy. If geothermal makes sense for a specific site, that is what should be used. If wind is the most efficient choice, that should be used. Politicians should not be injecting themselves into engineering decisions. We should be finding ways to spur activity without raising rates to accomplish it, and finally all new power sources should be paid for at wholesale rates to keep you from paying more.

~Steve