PSNH Announces Winter Rate Hike, Smaller Than Other Utilities

Dec 15, 2014

Credit Christian Patti / http://christianpatti.com/

The state’s largest electric company has asked for a winter price hike. Even after the increase Public Service of New Hampshire will still have the lowest winter rate of any utility in the state.

PSNH has asked regulators for an energy rate of 10.56 six cents per kilowatt hour, an increase from the current rate of 9.87 cents per kWh. The utility estimates that for an average rate-payer, using between 500 and 700 kWh per month, bills will rise somewhere between $5 and $8.

The rate must be approved by regulators at the Public Utilities Commission, and if okayed would go into effect on January 1st. It ostensibly will be in place for all of 2015, but after six months the utility can file for an adjustment.

There is the chance that bills could rise further. PSNH is asking regulators for permission to tack the full price of a mercury pollution scrubber on its largest power-plant in Bow onto customer’s bills. If the PUC decides in their favor PSNH’s energy rate would rise to 11.43 cents.

“Certainly there’s a possibility that [a decision] may be issued in time for it actually to be incorporated into the rates that would be as of January 1,” says Martin Murray, spokesman for PSNH, “Even with that, we’d still be the lowest in New England. That speaks volumes, doesn’t it?”

What it speaks volumes about is a now years-old debate over whether Public Service should be required to sell its power plants to competitive energy companies.

In recent years, and as recently as this summer, PSNH has tended to have the most expensive electric rates in the state, which critics blame on the fact that PSNH has to pay the fixed costs of owning and operating power plants. Thanks to the fracking boom and a glut of cheap natural gas, those plants had been running increasingly less, but with the region facing another winter with pinched supply of natural gas on the coldest days the utility has seen their fortunes reversed.

PSNH has been trumpeting this as evidence that its fleet of power plants is far from a burden.

“Now sometimes that helps us, at a time like now when the market is very high, we’re low in comparison,” says Murray, “Sometimes in some other months of the year, the market can be quite low, and we're a bit higher.”

The utility’s critics continue to argue that by-and-large its rates are still higher than competitors. Cristophe Courchesne, staff attorney with the Conservation Law Foundation, says the average of the low summer rates and higher winter rates of other utilities is a better deal than PSNH customers get.

He also notes that PSNH rates are only likely to compare favorably in the winter as long as the region can’t figure out its winter-time natural gas problem.

“If that natural gas issue is resolved, that benefits customers of other utilities; it doesn’t benefit PSNH’s customers as long as PSNH continues to own its power plants,” says Courchesne.

Of course, the question of when or if New England will get its winter price spikes under control remains wide open. Until it does, announcements from Public Service like today’s are likely to continue for years to come.