Power to the People is a column by Donald M. Kreis, New Hampshire’s Consumer Advocate. Kreis and his staff of four represent the interests of residential utility customers before the NH Public Utilities Commission and elsewhere.
By DONALD M. KREIS, Power to the People
“We are currently preparing a report examining recent developments in New Hampshire’s energy market,” read an inquiry I received recently, “including proposals from Eversource and Unitil to raise electric rates.” Indeed, the Public Utilities Commission is in the midst of hearings on Eversource’s request for a drastic increase in distribution rates. And Unitil recently filed a brand new rate case.
The author also promised an inquiry into “broader trends in residential electricity pricing across the state.” The message cited data from the federal Energy Information Administration (EIA) to the effect that when I took office as Consumer Advocate in early 2016 the average residential electricity rate in New Hampshire was 15.78 cents per kilowatt-hour and, during my tenure, has increased to 21.48 cents – a jump of more than 36 percent. So the writer posed the following specific queries:
- Are the EIA figures cited above accurate in your view? If not, what data source or rate figures should be used instead?
- Is it fair to say that residential electricity rates in New Hampshire have increased by more than 36% during your time in office?
- Can you point to any actions or interventions by your office that have measurably prevented further rate increases or resulted in rate reductions for residential customers?
I responded with a question of my own: Who are you?
The inquiry was signed, simply, “The Granite Eagle” and bore a return address of press@graniteeaglepress.com. I had never heard of the Granite Eagle before, though I thought I knew something of every news organization in the state.
The Granite Eagle is not a member of the New Hampshire Press Association, but it has a web site. A visit there offers plenty of fodder for anyone inclined to speculate about who or what is behind the Granite Eagle, but I will pass on the opportunity.
Instead I will just say: This is one game I am not going to play. My practice is never to ignore a media inquiry. But I won’t deal with journalists who refuse to identify themselves by name.
The questions, though, are legitimate. So here, unmediated by journalists and editors who insist on hiding behind a cloak of anonymity, are my manifestly un-anonymous answers.
Yes the EIA is a reliable source of data about the energy industry across the U.S. And I don’t have any reason to doubt that electricity rates in New Hampshire have climbed, on average, by 36 percent in the nine years I have served as the state’s official advocate for the interests of residential utility customers.
But inflation in the overall economy, as measured by the Consumer Price Index, has pushed prices up by 33.25 percent during the same period. That’s according to the web site www.in2023dollars.com, which uses data from the U.S. Bureau of Labor Statistics.
Am I pleased that average electricity prices in New Hampshire have outpaced inflation, at least slightly? Of course not.
Is it my fault? No. I can’t even blame the Public Utilities Commission, which approves the rates charged in New Hampshire by Eversource, Unitil, and our third investor-owned electric utility, Liberty.
Roughly half of everyone’s electric bill consists of an energy charge that pays for the actual electricity consumed. For the most part, we rely on the region’s wholesale electricity market – not the PUC, nor the Consumer Advocate — to discipline these prices. Customers have the right to shop for the best energy rate they can find.
Moreover, as shown on a sample Eversource residential bill, the second biggest poles-and-wires charge concerns transmission – the cost of the high-voltage system that moves power across long distances. This is regulated not by the PUC but the Federal Energy Regulatory Commission.
Concerns about transmission charges are entirely justified. We New Englanders pay the highest transmission rates in the country, thanks in part to a regional grid operator (ISO New England) that operates in public-be-damned mode.
Even more worrisome are so-called Asset Condition transmission projects – rebuilds or expansions of existing transmission facilities – that presently go unscrutinized. Compare that to distribution projects subject to PUC regulation, which are vigorously reviewed for prudence.
Given recent estimates that there are some $5 billion in Asset Condition projects somewhere in the pipeline between planning and execution, all of the region’s ratepayer advocates are actively engaged in sounding the alarm about this practice. The poster child is Eversource’s plan to spend more than $400 million to rebuild one transmission line in western New Hampshire. We are pushing back on all fronts.
Finally, utility customers don’t pay rates – they pay bills. According to the most recent data from the EIA, New Hampshire is in the middle of the pack, regionally, when it comes to average monthly residential electric bills. We could do better if we pushed harder on energy efficiency, but the PUC in recent years has been skeptical about that at best.
In response to the last question, I repeat what I said to the Legislature in testimony on March 5 about a bill concerning the Office of the Consumer Advocate (OCA), which I lead:
“I have been advised to come in here and try to convince you that we routinely save ratepayers money in an amount that well exceeds our annual budget of about $1.1 million. And we do indeed from time to time get to make that happen.
“But here’s the thing: We’re really cooperators. Way more often than not, advancing ratepayer interests requires finding common ground with others – with utilities, with other agencies, with interest groups – and then convincing the PUC that the consensus we have built is what the public interest requires.”
Right now we are in the middle of fighting with Eversource about what return on shareholder investment should be embedded in the company’s rates. The company seeks a bloated rate of 10.3 percent – well in excess of anything you or I could possibly receive on even our riskiest investments.
We think the right answer, erring on the side of generosity, is 8.1 percent. If the PUC agrees with us, the resulting savings to ratepayers will be at least ten times our office’s annual budget.
Thanks for the questions, and for the chance to answer them directly.