NH State Representative Tom Cormen

Why did your electric rates skyrocket,
and what can you do about it?

If you live in Lebanon, then your electric utility is Liberty Utilities. Liberty is one of the four electric utilities serving New Hampshire, the other three being Eversource, Unitil, and the New Hampshire Electric Coop. Liberty, Eversource, and Unitil are regulated by the Public Utilities Commission (PUC), but the NH Electric Coop is not. (You’ll see a little later why this fact is relevant.)

What you might not know is that in New Hampshire the utility that delivers electric power to your home or business does not actually generate the power. New Hampshire utilities only deliver the power; they don’t make it. Other entities generate the power. (If you did not know this, don’t feel bad. I didn’t really understand it until I joined the Science, Technology and Energy Committee.) For example, when you’re driving by Exit 12A on I-89 and you see that power plant on the side of the highway, that plant generates electricity from biomass and sells it.

To whom do these power plants sell? They sell to the utilities, but the actual power goes into the “grid,” which is operated by the Independent System Operator - New England, or ISO-NE. ISO-NE operates the transmission lines—those big power lines that Godzilla was so fond of destroying. Liberty’s job is to distribute the power to individual customers.

Most of us in Lebanon currently use Liberty’s “default service,” which is the power that Liberty purchases and then resells to us. It has been possible for a few years now to buy your power from elsewhere, and Liberty delivers it. (More on that later.) But most of us just take Liberty’s default service.

Liberty and the other two regulated utilities are constrained by the PUC to go out to the wholesale power market every six months to obtain contracts for power. Whatever prices they can get at the time determine the price of default service. The retail price that Liberty charges us is a little higher than the wholesale price that they pay, but they do not profit on it; the difference is to cover their additional costs.

So if the wholesale price happens to be high at the time that Liberty goes out to the wholesale market, the price of default service is going to be high.

I mentioned that the NH Electric Coop is not regulated by the PUC. The NH Electric Coop is not constrained to go to the wholesale market once every six months. Instead, they can go out whenever they want. So they “ladder” their contracts, so that at any one time they’re buying power via multiple contracts that have staggered start and end dates. As a result, NH Electric Coop customers had nothing like the shocks that customers of the three regulated utilities experienced. Could Liberty, Eversource, and Unitil do something like what the NH Electric Coop does? We have a bill, HB 159, in the Science, Technology and Energy Committee that could do just that. (If you look up the bill on the NH House website, you’ll see that it calls for a five-year rolling average. There’s an amendment in the works that would allow for laddering.)

Now let’s change gears. Any financial advisor worth their salt will tell you to diversify your financial portfolio. Of course, if they knew exactly which investments would be the best, they would have you go all in on just those investments. But nobody knows which investments are going to perform the best, so instead you should diversify your portfolio—not to maximize the upside, but to minimize the downside. In other words, so that you’re not overly exposed by any single investment.

It is the same with energy. There are many different sources for electric power: solar, wind, hydro, nuclear, biomass, coal, oil, and natural gas. A good mix of sources prevents the overall price from spiking if any one of the sources becomes expensive.

Well, New Hampshire is overcommitted to one particular source, and its price spiked when Liberty was purchasing power. That source: natural gas. Why did its price spike? Several reasons, but the main one is disruptions caused by Mr. Putin’s war in Ukraine.

What we could have done about it was rely less on natural gas and more on sources that cannot be disrupted by political events, such as solar and wind. These sources are renewable, produce zero carbon, and can be produced within the state. When Liberty buys power produced by natural gas, how much of that money stays within New Hampshire? None of it.

So that’s where we are. We rely too much on natural gas and too little on other sources. Natural gas has the advantage that it can produce power regardless of whether the sun is glowing, the wind is blowing, or the rivers are flowing. But its price is entirely outside of our control.

What you can do about high electric rates

The good news is that you can do something about these high electric rates.

First, Lebanon is moving toward Community Power. Lebanon, along with several other New Hampshire municipalities, will be buying power for its residents. You will be able to choose how much of the power you receive will be from renewable sources, going up to 100% renewable. Granite Basic, the default option with Lebanon Community Power, contains 23.4% renewable content (the minimum allowed by state law) and will cost 15.8 cents per kilowatt hour, compared with 22.007 cents per kilowatt hour, which was the default service price on my most recent bill. That’s a 28.2% decrease. You can opt for Granite Plus, 33% renewable and 16.2 cents per kilowatt hour; Clean 50, 50% renewable and 16.9 cents per kilowatt hour; or Clean 100, 100% renewable and 19.1 cents per kilowatt hour. Yes, you can get your electricity from 100% renewable sources for almost 3 cents less per kilowatt hour than the default service price.

When Community Power comes online for Lebanon, it will be on an opt-out basis. That is, if you’re currently receiving default service, you will be switched over to Community Power unless you ask not to be switched over. It’s expected that Community Power will be coming in May 2023.

One question I had was if I switch to Community Power but I have a service problem (such as my power going out entirely), will Liberty Utilities care enough to restore my service? There’s good news here. Remember that Liberty’s only job is to deliver the power. They don’t really care where or how that power is generated. So yes, there should be no change in the level of service we receive from Liberty.

There’s something else you can do: make your home or business more energy efficient. The cheapest power available is the “negawatt”: the power you don’t use. Not only does it not need to be generated, but it also doesn’t need to go over power lines. You can do some obvious things to use less electricity: turn off lights that you don’t need to have on, switch your lighting to LED bulbs, do fewer dryer loads, etc. I converted my home to all LED lighting, and until the default service price spiked, my monthly electric bills were always under $100.

Do you know about NHSaves? Liberty Utilities can help you reduce your energy use. It’s free, so check it out!