Electric bills will be going up for members of New Hampshire Electric Cooperative (NHEC) during the upcoming winter period, though not as high as last winter.
At its September 29 meeting, the NHEC Board of Directors approved increases effective with bills rendered on November 1 for the Co-op Power and Regional Access Charge portions of members’ bills. As a result, the typical residential member using 500 kilowatt-hours (kWh) per month will see an overall bill increase of 18%, or $16.30 per month for the winter period, which ends April 30, 2016.
Though the winter period rate increase is significant, it comes on the heels of a summer period that saw rates drop 20% from the 2014 winter period price. Overall, the typical residential member using 500 kWh per month will be paying 4.5% less than last winter.
The same conditions that have caused New England electric rates to spike for the past three winters are still to blame for this latest seasonal increase. Though natural gas prices remain low at the wellhead, a lack of adequate pipeline capacity into New England means that power producers will be competing again this winter with home heating for limited natural gas supplies. This causes a significant delivery premium to be added to the wellhead price for natural gas, which is used to generate more than half of the electricity produced in New England.
The rate increase is the result of increases in two portions of members’ bills – Co-op Power (the actual electricity used) and the Regional Access Charge (the cost to access the regional transmission grid in order to get power to the NHEC distribution system). For most members, the Co-op Power rate is increasing 46% from 6.5 cents per kWh to 9.5 cents per kWh. By comparison, that is 18% lower than last winter’s Co-op Power rate of 11.6 cents per kWh.
For most members, the Regional Access Charge (RAC) is increasing 11% during this winter period from 2.2 cents per kWh to 2.4 cents per kWh. Driving this increase are the continued costs of major investments being made in the region’s bulk transmission facilities that move large amounts of power from generators to load centers. Investment in these large transmission facilities that serve the whole region went up another $800 million this year (following $1 billion in additions last year), and such additions are expected to continue at about that same level for at least the next two years.
Similarly, there is little relief in sight for the conditions in the natural gas market that are causing the wide seasonal swings in the cost of wholesale power in New England.
“ISO-New England is taking some steps to reduce the need to deliver natural gas to New England by pipeline by incentivizing the storage and back-up use of fuel oil by generators that are capable of using it, by paying for liquid natural gas that can be stored within the region, and by enlisting some electricity users who can reliably reduce their demand when conditions are tight. But the fundamental cause for high New England winter electricity prices won’t be resolved until solutions are implemented that counter the region’s natural gas delivery limitations,” said Steve Kaminski, NHEC Vice President of Power Resources and Access. “The ‘forward’ electricity market does not anticipate such relief for at least the next several years.”
NHEC is encouraging members to mitigate the effects of higher winter rates by conserving and, when possible, participating in NHEC’s Energy Solutions programs. Energy efficiency improvements can help members save energy and money year-round. NHEC provides a full slate of energy-saving opportunities for residential, commercial and municipal members. Complete details are available online at NHEC.com/energysolutions. Members can also view and manage their electric usage on SmartHub, NHEC’s online home for account management, at NHEC.com.
NHEC is a member-owned electric distribution cooperative serving 83,000 homes and businesses in 115 New Hampshire communities.