By PAULA TRACY, InDepthNH.org
CONCORD – Acknowledging the financial impact to New Hampshire consumers is a “significant concern,” the state’s Public Utilities Commission nonetheless approved a six-month, 112 percent increase in the kilowatt-hour cost of electricity for the state’s largest utility as had been feared and expected.
The request of Eversource to allow it to recover the costs of the power supply they buy for the next six months will send bills up 53.3 percent for over 500,000 customers, the PUC noted.
The price increase goes into effect on Aug. 1 and goes through Jan. 31, 2023.
Rapidly rising natural gas costs, which represented 57 percent of the fuel mix to make electricity in New England, according to ISO-NE, are the primary reason for the rate increase.
The war in Ukraine, transportation costs, inflation, and the fact that New Hampshire is far from the source of the natural gas in places like Texas, are among the reasons utility operators are blaming for the needed hike.
Don Kreis, director of the state Office of Consumer Advocate, said the utilities are not making money on the price hike and that it is a pass-through cost to consumers but one which will have a nasty bite at a time of inflation.
“It’s going to be a huge blow to consumers,” Kreis said at the PUC this week, but he noted these are the consequences of the state’s 1996 decision to rely on competitive markets for its electric needs.
For a long time, he said, the state has enjoyed lower rates but he predicted that, “February will be an awful month,” when the cold and expected prices for utilities will be higher than last winter.
To address concerns, Gov. Chris Sununu held a press conference this week to announce a plan to soften the blow.
He is proposing the use of $60 million in state surplus funds to give a one-time, $100 credit to just about all 600,000 ratepayers on their electric bills.
The measure still will require legislative approval but is expected to help consumers beginning with their September bills.
The state has four major electric service providers and three of them either already have authorization for the price hike or are asking for it.
Eversource is the largest.
Liberty Utilities, provider of electricity for the Salem area and Upper Valley, also received a similar rate hike from the PUC this month.
New Hampshire Electric Cooperative, which provides power to 85,000 in rural communities across 115 communities in the state, is expected to seek a similar increase in its six-month rate, similarly this coming week.
Its board makes its decisions rather than the PUC and meets to vote on June 28.
Unitil, which provides service to the Seacoast and Concord area, filed for a summer rate change prior to the exploding costs of natural gas and its estimated 75,000 customers won’t likely see an increase until after Nov. 30.
Alec O’Meara, head of media relations for the Hampton-based utility, said its customers actually saw a rate decrease from the winter billing cycle, and its prices will stay the same through the fall.
As part of the order issued by the PUC on June 23 on Eversource’s request, it read that it “shall include a statewide review” of electric distribution default service procurement practices in addition to the utilities’ role in Renewable Portfolio Standards compliance on behalf of default service customers.
A copy of the order is here https://www.puc.nh.gov/Regulatory/Orders/2022orders/Documents/26-645.pdf
ISO-NE, the independent organization which controls supply and energy reliability in New England has said it thinks there is enough electricity this summer in the region to address the regional needs.
It updates the fuel mix used to make electricity in New England and as of Friday, it noted that while natural gas is the primary source, at 57 percent, nuclear represents 33 percent of the mix, renewables are 7 percent, hydropower is 3 percent and “other” is 1 percent.
Some Democrats, including Dr. Thomas Sherman, who is running for Governor, said that the state could have had more of a renewable mix in the fuel if Republicans allowed initiatives to move forward, but Sununu said that he actually saved consumers money by vetoing those measures when the Democrats were in control of the House and Senate.
The PUC order notes that an average consumer uses about 650-kilowatt hours a month.
Half of the typical bill, O’Meara said is in fixed costs to run the utility like personnel, equipment to fix problems, and the like while the other major half of a person’s bill is on the actual energy costs.
When the transmission and distribution costs are included on an average bill, the PUC wrote, a typical bill of $145.11 for Eversource will go to $222.45 or about $77.33 a month in added costs.
Executive Councilor Ted Gatsas, a Manchester Republican, announced the hike as “unacceptable” and wrote a letter to the PUC telling them this is not a good time to be raising rates.
But Sununu said their hands were tied.
Executive Councilor Cinde Warmington, a Concord Democrat, agreed that the governor was correct but noted there could be state-based measures that could be taken to help ratepayers through what is likely to be a very financially stressful period.
Kreis was asked to comment Friday on the PUC ruling.
“This is a sad development for Eversource’s customers in New Hampshire but I believe the PUC had no choice but to approve the gigantic rate increase and the wholesale contracts that are driving it.
“The language about reexamining the procurement process is similar to the language in last week’s order approving a similar rate increase for Liberty. Such an inquiry is long overdue and should be broadened to include the larger question of whether small customers are well-served by retail choice as we have implemented it in New Hampshire,” he said.
Kreis noted that the PUC had to act expeditiously on the Eversource request.
“Ordinarily, the utilities don’t get to tell the PUC – or even suggest to the PUC – when it should issue orders. But in the case of these default energy service procurements the utilities have made a convincing case that the winning bidders need a speedy answer to the question ‘will we actually have to perform this contract’ because the wholesale market is ever-changing and these companies are constantly hedging and trading so as to be in a position to meet their firm obligations.”