The Job Interview: N.H. residents have a choice in energy providers
A campaign launched last month by a coalition of energy companies, trade groups and environmental organizations is spreading the word that New Hampshire residents can choose who and where their energy comes from.
EmpowerNH supports a competitive market approach to energy production, because, it says, it improves efficiencies in energy production, lowers costs and broadens the sources of energy to which customers have access – including natural gas and renewables such as wind and solar.
New Hampshire’s energy market has in fact been open to retail suppliers for more than a decade. In 1997, at the request of the Legislature, the Public Utilities Commission issued a restructuring plan that pushed the state’s four major utilities – Public Service of New Hampshire, Liberty Utilities, Unitil and the New Hampshire Electric Cooperative – to begin selling off their power plants and other energy-generating assets.
Today, the power lines that deliver electricity to customers are still owned by the utilities, but the energy conveyed through them is another story. Liberty Utilities, Unitil and the New Hampshire Electric Cooperative each offer customers energy from retail suppliers.
PSNH, which serves approximately 70 percent of the retail customers in the state, also offers that option.
But unlike its competitors, it still owns its own fossil and hydropower plants, so unless customers initiate a switch, they receive a default plan that includes power from those sources.
Business customers have been leaving PSNH for alternative providers in large numbers for years, and residential customers have started to follow suit.
According to the PUC, nearly 50,000 of PSNH’s residential customers had made the switch to retail suppliers by the end of March.
The coalition estimates that PSNH customers who have not switched pay on average $15 to $20 more per month than do customers purchasing from retail suppliers.
Mike Skelton, a spokesman for PSNH, said switching to suppliers who tout lower electric bills doesn’t necessarily guarantee savings in the end.
Some retailers offer attractive base packages, he said, but those don’t necessarily include what may have drawn customers in the first place – namely renewable energy.
“As with any supplier inquiry, we always recommend the customer read the fine print,” he said. “Different suppliers offer different rates and different terms.”
It hasn’t been all good news for the new suppliers. In February, Power New England, one of the first companies to offer PSNH customers an alternative option, announced it was sending some 7,300 of those customers back to PSNH’s default service; the company had run into financial trouble during the winter months when a spike in demand for natural gas sent electricity prices upward. PNE has been allowed back into the market and says it plans to take on customers in the future.
Jonathan Peress is vice president and director of clean energy and climate change at the Conservation Law Foundation, a co-founder of EmpowerNH. He said the PNE development should not raise concerns with consumers. “In a competitive market, the lower-cost suppliers will ultimately prevail,” he said. “No one lost power for even a second. Nobody paid any more for their power for what happened.”
We asked Peress a few additional questions about the campaign’s central tenets.
What is the theory behind opening the energy field to retail providers?
The thought was that competitive markets would bring about inherent efficiency in how energy is supplied.
Most utilities sold off or divested their power plants. That has happened with Unitil, Liberty and of course the New Hampshire Electric Co-op. PSNH sold off Seabrook in the early 2000s, which was big, but it retained its other power plants and generators.
How has the restructure affected the state’s energy market?
There are a number of factors that have made the markets more cost-effective. The first example: Competitive suppliers are responsible for the profits and losses that flow from their own decisions, instead of receiving a guaranteed profit from the PUC.
Markets make better and more effective decisions than do monopolies created by policymakers.
Another example: Like any technology, the technology to produce power or save power gets better over time, so to the extent PSNH is relying on a specific set of power plants, eventually technology passes them by.
In general, it requires less fuel to produce the same amount of energy purchased through a retail supplier than to produce the same amount of energy from older power plants like PSNH’s.
If the savings are so great, why haven’t more PSNH customers switched over?
I think there are a multitude of reasons people are staying with PSNH. People are not aware they can choose their electric suppliers and that they can change.
There is a mis-impression that the process is more difficult than it is. It typically means just signing a form on the internet.
That’s it. The actual act of switching suppliers is no different than switching one’s phone service. It’s probably easier, actually.
Can anyone in the state purchase through a retail supplier?
Retail competition is available throughout the state.
Why doesn’t PSNH just sell off its plants?
PSNH gets what is essentially a guaranteed profit, so long as the PUC finds their investments to be prudently managed.
Are the retail providers offering more renewable energy?
At least and likely more because all competitive suppliers are held to the same state standards.
Every supplier has to buy a certain amount of energy from renewable sources. It’s something like 10 percent. I’m not certain.
If I’m a customer that wants more of my energy to come from renewable sources, how can I make that happen?
You would look at the various suppliers offering power, look at their green options and buy through one of those.
Any last words?
State regulators have known for years that PSNH’s rates were becoming high compared to what everyone else is paying. So this is not a new phenomenon.
What is new is customers are beginning to realize there are real savings they can take advantage of. Like any large infrastructure, it is inevitable that over time that infrastructure will become no longer useful and be replaced.
We have reached that state with PSNH, as far as its coal and oil power plants.
(Jeremy Blackman can be reached at 369-3319,
firstname.lastname@example.org or on Twitter @JBlackmanCM.)