PSNH Faces First Statewide Challenge For Residential Customers

Nov 1, 2011

For the first time Public Service of New Hampshire has statewide competition from another utility company. That could be good news for some consumers and bad news for PSNH.

NHPR’s Chris Jensen reports.

In 1996 the state passed a law that gave consumers the right to pick the company from which they wanted to buy electricity.

But the pickings were so slim as to be non-existent.

In short nobody gave Public Service of New Hampshire any statewide competition for residential customers and PSNH currently dominates the market.

“Residential customers really have not had a real choice.”

That’s Meredith Hatfield.

She heads up the office of Consumer Advocate at the Public Utilities Commission.

But now a company called Resident Power, which is based in Manchester, is challenging PSNH.

“Well, the good thing for the residential customer is that they have an electric choice which was the goal back in 1996.”

Bart Fromuth heads up Resident Power.

“We’re really targeting PSNH to start only because of the fact they have the highest utility prices right now for residential customers.”

Fromuth says Resident Power has its first 1,000 residential customers statewide and some of them are already getting power.

Another batch – expected to total 400 or 500 – is almost ready to go.

Fromuth says Resident Power’s rates can be lower because the electricity is being purchased on the open market from the least-expensive seller.

Meanwhile PSNH produces much of its own electricity and its costs are likely to be higher.

Fromuth says customers who switch to Resident Power won’t notice any change in how the electricity is delivered.

It comes on the same power lines and if there is a problem PSNH still handles it.

The bill still comes from PSNH.

What’s different is the price.

Fromuth says Resident Power won’t sign up new customers unless they will save at least 5 percent over PSNH.

It could be more.

“It could go up, it could go down. I could show a customer potentially a penny and a half savings or the market might spike and I might show half a penny savings.”

Those first Resident Power customers are paying about half a penny a kilowatt hour less than PSNH.

Let’s figure the average household is using about 600 kilowatt hours a month.

That means the current Resident Power customers are saving about $35 a year. That’s just over 5 percent.

In January PSNH is expected to increase its rate for residential customers.

If approved and Resident Power doesn’t change its rate its customers would save about $80 a year.

Fromuth says he isn’t sure yet what Resident Power’s rate will be in January.

But he says he’s confident it will beat PSNH.

PSNH’s role in the controversial Northern Pass hydro-electric project is playing a small role in Resident Power’s campaign, Fromuth says.

“Five to 10 percent just seem to not even care about what the new price might be as long as they are in some way showing their lack of support for the Northern Pass program.”

Martin Murray is a spokesman for PSNH.

He says while competitors may have a pricing advantage now there’s no telling how long that could last. But he says the company tries to make it as easy as possible for customers who decide to switch.

He also says switching will also mean higher costs for the PSNH customers who don’t switch.

“The migration of any customer away from PSNH as a supplier simply shifts fixed costs onto a smaller base.”

A large loss of residential customers would be bad news for PSNH.

The utility is already facing economic challenges because many of its large commercial customers left.

For NHPR News this is Chris Jensen.