PSNH rate request comes in even lower than expected
Public Service of New Hampshire has filed its final rate request for the six months starting in July, and it is lower than the company predicted in May.
The regulated utility serving 70 percent of the state is requesting its energy service rate be reduced nearly 10 percent, to 8.62 cents per kilowatt hour from the current 9.54 cents per kwh. In early May, the company predicted it would request 8.98 cents per kwh.
In addition to the reduction in energy service charges, the company is asking the PUC to approve lower rates for transmission, distribution and stranded cost recovery.
With all changes taken into account, the total electricity bill for a PSNH customer will be going down by 4.3 percent as of July 1, assuming the changes are approved, according to PSNH spokesman Mike Skelton.
"The average customers using 500 kilowatts a month would see their bill go from about $92.43 to $88.49 in July," said Skelton. "However, that is subject to final approval of the PUC and includes a yet-to-be-finalized adjustment in regional transmission costs."
Skelton attributed the reduced energy service charge to two factors — revenue from the company's power plants and projected wholesale energy prices.
"When we're running our generation, we're creating revenue that in effect goes to customers since it pays costs they would otherwise have to pay," Skelton said.
The rate request comes as the PUC is in the middle of a regulatory proceeding designed to determine whether it is in the best interests of consumers for PSNH to retain ownership of power plants, or focus exclusively on power transmission and delivery.
PSNH is now proposing a stranded cost recovery charge of 0.272 cents/kwh, down from the current charge of 0.737 cents, a 60-percent decline due, in part, to the final payoff of bonds issued 12 years ago as part of the electric utility restructuring settlement between PSNH and the state.
Even customers who do not purchase energy supply from PSNH will benefit from the reduction in transmission, distribution and stranded costs.
The PSNH energy supply rate is inching closer to the rates offered by competitors, who have been providing energy supply, delivered by PSNH, since mid-2012.
The PSNH rate is still higher than the current six-month offers from ENH Power at 7.28 cents per kwh, and North American Power at 7.99 cents. NextEra Energy Service New Hampshire is offering 7.10 cents per kwh on a six-month guarantee. Gulf Electricity is offering a fixed rate of 7.4 cents per kwh from sign-up through Dec. 31.
Customers willing to take a chance on one-month guarantees can get rates as low as 6.49 cents from Resident Power and Electric Solutions.
On the other hand, 12-month price guarantees by some competitors now exceed the PSNH six-month offer. Glacial Energy of New England is offering 8.69 cents for 12 months, while North American's 12-month offer is 8.79 cents.
As competitors see their pricing edge against PSNH diminish, they have begun to promote other benefits of competitive energy supply.
"Switching is about more than just price," said Brian Landrum, president of Nextera Energy Services, which just entered the residential market last week. "We believe that price is still a big part of the benefit we can offer today, but we can also offer 12-month guarantees, green energy options and additional services down the road."