PSNH forecasts summer rate increase for N.H. customers
Public Service of New Hampshire customers may see their overall rates rise roughly 1.7 percent this summer, according to estimates released by the company last week.
PSNH projects its customers will pay about 9.98 cents per kilowatt-hour of electricity beginning July 1. That’s up from the current rate of 9.23 cents per kilowatt-hour that has been in place since the beginning of this year. Under the projected price increase, a PSNH residential customer using 500 kilowatt-hours a month will see a $1.57 increase in his or her electric bill – that under current rates would be $91.98.
The projected price increase is due in large part to volatility in the energy market and energy prices that soared higher than anticipated, PSNH spokesman Martin Murray said.
When determining rate adjustments, PSNH takes into account two major things: costs the company has already incurred and future costs they likely will face. Both are increasing, Murray said.
Over the winter the price of natural gas skyrocketed, he said, but PSNH’s power plants were able to produce energy at a lower cost than the regional market prices in the first part this year. A few times this winter, Merrimack Station’s combustion turbines were for the first time a more economic way to produce electricity than natural gas.
Beginning in November, the migration of customers away from PSNH reversed, and to meet the increasing demand, the company had to purchase additional power from the marketplace, he said. Overall, the costs to meet the customers’ energy needs were higher than anticipated over the winter period, Murray said. PSNH expects costs will remain high during the remainder of the year.
In 2013, the wholesale price of energy in the New England market increased by 55 percent from 2012. That increase is largely tied to the rise in natural gas prices, which on average drives more than half of the state’s electricity production, Murray said.
“We are so dependent on natural gas to produce energy that when the price of natural gas goes up, the price of energy for everyone goes up,” he said. “This past winter it is a sign of what is to come.”
The company’s rate increase is an estimate and could change, depending on state legislation, by the June file date. It will likely take effect July 1.
Whether the rate is revised up or down, it “is a strong indication PSNH is seeking a considerable rate increase in the later half of the year,” said Christophe Courchesne of the New Hampshire Conservation Law Foundation. It shows that the company’s rates are likely to outpace the market in the foreseeable future, he said.
Beginning this month, Liberty Utilities residential customers pay roughly 7.73 cents per kilowatt-hour for electricity, a decrease from the previous rate, according to a March filing with the Public Utilities Commission. Unitil will charge residential customers roughly 8.4 cents per kilowatt-hour of electricity beginning June 1. Under the new rate, customers will see an average 6.6 percent decrease in monthly bills, according to the company’s April filing with the PUC.
(Allie Morris can be reached at 369-3307 or at email@example.com.)