The new default electric service rate proposed by Unitil could be a positive indicator for all New Hampshire ratepayers this summer.
Filed with the Public Utilities Commission on June 14, Unitil is proposing a default electric service rate of 13.25 cents per kilowatt hour, a close to 50 percent decrease from its current rate of 25.9 cents per kilowatt hour.
If the new rate is approved, a typical Unitil electric customer using 600 kilowatts a month would see a decrease of approximately $76 in their bill starting Aug. 1 and lasting through Jan. 31, 2024, said Alec O’Meara, spokesman for Unitil.
Dan Phelan, who manages regional electric issues for the state’s Department of Energy, told the Executive Council during his presentation Wednesday that “the immediate future is improving.”
Unitil is the first utility in New Hampshire to file its next proposed rate change. Also regulated by the Public Utilities Commission, Eversource and Liberty Utilities are expected to file in the coming weeks. The New Hampshire Electric Cooperative, a member-owned and democratically run utility, sets its own rates.
A utility’s default electric service rate changes twice per year on varying schedules for customers in New Hampshire. It reflects how much it costs a utility to procure energy and is influenced by changing market forces of the moment.
Starting last summer, customers of Eversource and Liberty saw a twofold increase in their electric rates and only a small reprieve as rates adjusted Feb. 1. In December, Unitil announced a 160 percent increase in its rate for an eight-month period.
The high cost of energy this past winter was mainly attributed to the war in Ukraine, the region’s overreliance on natural gas, and extreme weather events, utilities have said. New England doesn’t produce any of its own natural gas, and so found itself in a tough situation: being largely dependent on an imported global commodity that’s subject to changing market forces.
O’Meara said while liquified natural gas prices have since stabilized, it remains a core issue that “will likely continue to impact winter rates going forward.”
Clean energy advocates concurred during a virtual briefing held Wednesday ahead of a Federal Energy Regulatory Commission forum taking place in Portland, Maine, next week. While electric customers may start to see smaller bills with the next scheduled rate change, they said, New England remains on a seesaw of sorts.
“Even if we see some relief, which is much needed, currently we’ve attached ourselves to these price-volatile fuels,” said Phelps Turner, a senior attorney with the Conservation Law Foundation. “And that’s a dangerous roller coaster to be on, because we don’t know what’s going to happen to the prices in the winter.”
Joe Curtatone, president of the Northeast Clean Energy Council, said there is a “stark difference” between costs that are driven by fossil fuels and costs driven by renewable energy.
During the Department of Energy presentation at the Executive Council’s breakfast meeting, Commissioner Jared Chicoine talked about the state’s energy goals as being “fuel neutral.”
“We don’t have goals similar to our neighbors,” he said, referring to the five other New England states that have aggressive statutory requirements in place to slash greenhouse gas emissions.
Similar efforts introduced in the New Hampshire Legislature this session were killed, including greenhouse gas emission reduction goals for the state, a climate action plan, and the formation of a commission to study the future of electric vehicles and needed infrastructure.
Chicoine said clean energy is “part of the mix,” but not a priority made explicit by state statute. He pointed to House Bill 1555, the position the Legislature took in 2018 when deciding how the state would approach regional energy issues – that costs to ratepayers come before anything else.
But the department is supportive of clean energy development, Chicoine said, citing offshore wind development in the Gulf of Maine. The DOE on Wednesday said 2027 is likely the earliest a project would come to fruition.
“Clean energy is an important part of the future, and we believe that costs and reliability are very important,” Chicoine said. “Yes, we want clean resources, but we want them to be affordable options, as well.”
Executive Councilor Ted Gatsas queried DOE officials about the possibility of rolling blackouts in New Hampshire this summer if weather really heats up. Phelan said summer electricity peaks are well known and accounted for in ISO New England’s system planning.
The department does not believe the state’s electric customers are subject to significant elevated risk this year, he said.
ISO New England, the region’s grid operator, says it expects to have sufficient resources to meet consumer demand this summer under typical weather conditions. But if above-average hot and humid weather occurs, tight supply margins could develop as peak demand changes.
In its summer assessment, the North American Electric Reliability Corporation said despite ISO New England’s assertion, the region is likely to have lower reserve margins this summer due to less generation and firm imports.
“Operators are more likely to require conservative operating procedures for managing capacity deficiencies,” NERC wrote.