NH electric bills could go down in February. But a new process to set rates attracts concern

By MARA HOPLAMAZIAN

New Hampshire Public Radio

Published: 12-23-2024 3:41 PM

New Hampshire’s utility companies are expecting to lower their rates for electricity in February. But they’re using a new process to purchase power, which has generated concern from the state’s ratepayer advocate.

Eversource customers can expect to see a decrease of about nine dollars on their electric bill if their rate change is approved, according to the company. Filings by Unitil and Liberty show their customers can also expect decreases.

The rate changes only reflect the cost of the power itself, not other utility charges, like those for the cost of transporting the power over long distances.

These are the first rates that have been set using a new process directed by the state’s Public Utilities Commission. Instead of locking in contracts for all of the electricity for six months, utilities are now expected to buy some of their power in a shorter-term spot market, where electricity can be sold and purchased at prices based on supply and demand and delivered immediately.

Don Kreis, New Hampshire’s consumer advocate, says that could expose customers to more risk.

“The prices go up and down minute by minute, literally. And that is great when everything is going along swimmingly. But if we get plunged, say, into a multi-week cold spell during the middle of the winter, those prices can shoot through the roof and customers using default service will be exposed to those prices,” he said.

After the six month period, if utilities pay more for power than they accounted for in their rates, electricity customers would face an extra charge to compensate for the extra cost.

Kreis is concerned that state regulators seem poised to put that charge on all electric customers — even those who don’t rely on their utility company for the supply of electricity.

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Many New Hampshire residents are signed up to buy power through their town or city, after the rise of community power programs. Those customers only pay traditional utility companies for the cost of getting electricity delivered — not for the cost of the power itself. But under the new system, they may be charged extra, if utilities underestimate how much power will cost throughout a given six months.

Henry Herndon, the director of member services with the Community Power Coalition of New Hampshire, said the coalition is opposed to their customers having to pay for those costs.

“In a state that values market competition, it's not appropriate for regulators to be undermining that marketplace by requiring it to subsidize risk of utility supply purchases,” he said.

In an email, Eversource spokesperson William Hinkle said the company noted to regulators that the new system would shift risk onto customers.

“Eversource has been very consistent that any increase in the self-supply percentage should be done prudently to account for this risk. While direct market procurements will expose customers to wholesale energy price risk, it is speculative to say that rates will be more volatile,” he said.

The new method could lower costs, Hinkle said, but Eversource wants to move forward carefully.

Hinkle said the company believes that applying adjustments for over- or under-predicting costs to all customers, not just those who are using Eversource’s default supply, is fair because the utility is expected to be a “provider of last resort,” able to serve customers who decide to leave alternative suppliers like community power programs.

People enrolled in community power programs won’t be affected directly by utility companies’ February supply rate changes, but may see different changes. The Community Power Coalition of New Hampshire expects to decide rate changes on December 30, while other community power providers charge the same rate for several years.

The New Hampshire Electric Cooperative, which uses a different process than the state’s investor-owned utilities, is expected to slightly increase rates in January.

These articles are being shared by partners in The Granite State News Collaborative. For more information visit collaborativenh.org.