LACONIA — Mayor Ed Engler remains concerned about the high cost of electricity, agreeing with Gov. Chris Sununu that it is dampening economic development in the state.
“It’s just not enough to listen to elected officials give lip service to efforts to do something about it,” Engler said.
The mayor, who also is the president of The Laconia Daily Sun, shared his electric bill as an example of New Hampshire’s electric rates.
Engler’s monthly residential electric bill for August, at the height of the summer’s warm temperatures, showed 484 kilowatt-hours of usage. A breakdown of the $123.74 bill showed that the actual cost for the energy he used was only $40.68, or one-third of the total. The remainder went to other fees and expenses.
The cost of the generated energy is just under 8 cents per kwh for the first 322.7 kwh used. Any juice over that amount is billed at just over 9 cents per kwh.
Beyond the energy charge, Eversource charges a straight 4 cents/kwh as a distribution charge, which covers the cost of bringing the power from a substation to the home. For Engler, that added $20.04 to his bill.
The transmission charge, for the high-voltage lines carrying electricity from the power generators to the substation, is broken down into two parts, similar to the way the cost of power is charged: The first 322.7 kwh cost $8.20, or roughly 2.5 cents/kwh, with the excess costing another $3.29, based on 2 cents/kwh.
Eversource’s stranded cost recovery, which allows them to recover – through the consumer – expenditures for things like compliance with emissions standards, adds $6.05 (1.9 cents/kwh) for the first 322.7 kwh used, and $3.33 (2 cents/kwh) beyond that.
Finally, Engler's bill also includes a system benefits charge of $2.20, based on a half centper kwh, and an electricity consumption tax of 35 cents ($0.00055/kwh).
“I urge everyone to start paying close attention to their electric bills in order to understand what we’re paying for and why,” Engler said. “It’s probably the only way we’re ever going to do anything about the ridiculous cost of electricity in New England in general and New Hampshire in particular.”
Solar energy is touted as being the greenest of energy supplies, but when the New Hampshire Legislature grappled with a bill that would expand net metering in order to make larger solar arrays profitable and potentially add to municipalities’ tax bases, discussions quickly got technical, and the repercussions of the bills got murkier as the analysis went deeper.
Net metering gives those with solar arrays a way of recovering the cost of investment. At its simplest level, net metering allows a homeowner who generates electricity with photovoltaic cells to sell any excess energy into the power grid, usually through a credit that is applied against electricity the homeowner draws when the solar panels are not generating enough electricity to meet the household needs.
The current state policy requires utilities to purchase that power at above-market rates for solar arrays generating 1 megawatt or less. The proposed net metering bill would have expanded that requirement to include arrays up to 5 megawatts. Companies interested in providing solar generating facilities argued that they needed the larger limit to be able to make a profit. They said it would make it possible for municipalities to turn unproductive land such as closed landfills into a generation site capable of providing power to the towns or cities.
Engler said, “No one objects to selling power into the grid. The issue was the guaranteed price that was higher than the wholesale rate.”
When most mayors across the state agreed to send a letter in support of the net metering bill, Engler withheld his support until the Laconia City Council asked him to sign on to the request.
The governor argued that the expansion of net metering would turn an incentive aimed at homeowners into a subsidy for large companies; and, although the New Hampshire Public Utilities Commission said it was not so, there were fears that the incentive would force other ratepayers to pay more if the bill passed.
In the end, legislators sustained Sununu’s veto of the net metering bill. While the Senate voted to override the veto, 21-3, the House vote was 217-128, 14 votes short of an override.
Transmission and fuel volatility
Don Kreis, the state’s consumer advocate, offered another consideration: “Net metering is a hedge against regional transmission costs and the cost volatility of natural gas generation. A cool thing about net metering is that it produces power at the local level.”
He said that any surplus power generated by the sun is likely to be purchased by neighbors, making it cheaper than moving the power over transmission lines to wherever it eventually is used.
“But it’s hard to figure out exactly how much more economically efficient that is,” Kreis noted.
A large solar array could require a bigger substation and additional power lines connecting to it.
Kreis said the Office of the Consumer Advocate is monitoring the implementation of the subsidy-related energy bills that the legislature adopted for biomass and waste-to-energy plants.
“All I can do is point out that these bills impose a cost on ratepayers,” Kreis said. “It is up to the Legislature to make the public policy determinations for facilities in the state. If you decide wood-burning power plants are important for economic development, those are decisions you have to make.”
Asked why regional transmission costs are so high, Kreis said, “We’ve spent billions in the last 10-15 years, and the reason is to eliminate congestion for economic and reliability reasons.”
The New Hampshire Office of the Consumer Advocate is a member of the New England Power Pool, or NEPOOL, which provides stakeholder representation in ISO New England’s decision-making. ISO New England operates the electric transmission system and oversees the market.
Kreis said that a key focus of the group is on fuel security.
“The argument right now is that, because we’re not building more natural gas pipelines and we rely so heavily on natural gas, there is a threat that, when the weather gets cold, there will be fuel insecurity,” Kreis said. “The proposed solution is to put in a guaranteed cost recovery for the big generators.”
That translates into guaranteed income for the Mystic Generating Station in Boston, and the danger, Kreis said, is that, once one producer gets cost recovery guarantees, others will follow suit. The low cost of natural gas also has taken away the profitability of the nuclear power plants, and if they seek guarantees, it could substantially raise costs to ratepayers.
Kreis has been a vocal advocate for opening up NEPOOL meetings to the press and the public, but right now those are closed meetings. He believes it is important for the public to have access to the discussions.
“They do a good job of making documents and meeting minutes available on their website,” he said of NEPOOL, but he noted that meeting minutes are not a transcript of the discussion. Kreis believes those discussions should be open.
This article corrects some calculation errors in the original story.