Electricity prices are about to go up in NH. Here’s why.
Most Granite Staters will see a jump between $6 and $18 in their monthly electricity bills starting Aug. 1, as both the state’s three-investor owned utilities and the Community Power Coalition of New Hampshire are raising rates. The Public Utilities Commission approved the rate changes for the utilities and the CPCNH Board of Directors approved its new rates.
The Northeast already has some of the highest electricity prices in the country, in part because of its reliance on natural gas which is subject to global market pressures. This year, the war with Iran and extreme cold spells this winter are contributing to higher costs this fall. Locally, this is the first full year utilities have had to follow a new way to set rates, which advocates say is leaving customers increasingly squeezed.
How will these conditions impact electricity bills for residential customers in the Granite State? And why may they look different for different utility customers?
What does the spot market mean for consumers?
Some consumer and clean energy advocates argue the spot market is detrimental for customers, especially at a moment when climate change is making extreme weather more likely and many families are increasingly struggling to keep up with the rising cost of living.
Joe LaRusso, who oversees the Acadia Center’s Clean Grid program, said the new calculation mechanism leaves consumers vulnerable to risk.
“They really have been set up for a trap, because they have the impression that their cost of electricity is remaining the same. That is, the price doesn’t change for six months,” he said. “But in fact, there is the risk that the half of the power that they’re getting, that’s variably priced, is accumulating a charge that they’re going to have to pay all at once at the end of that six month period.”
He said the traditional model offered a more transparent alternative that would spread out additional costs over a six month period, instead of customers being hit with a large spike once utilities realized they underestimated costs.
LaRusso said the utilities may have been missing the mark because they are inexperienced at making the market predictions they are now required to do, especially as things like weather are becoming more unpredictable.
“If utilities are required to buy half of the power that they’re delivering to their customers in this variable market, they’re really taking a bet on the weather,” he said. “Because if we have a bout of extreme weather, then we’re going to have extremely high energy prices.”
To read the full article from New Hampshire Public Radio, click here.