Monday, January 05, 2015
West Lebanon — The electricity bill that arrived Friday brought bad news for Chip Crawford, owner of Chiplin Enterprises, a real estate company in West Lebanon: energy costs for the company’s units had skyrocketed, doubling from $4,000 a month to $8,000.
“I’ll be hearing from the tenants soon,” said Crawford, who owns nearly 200 apartments and 25 different buildings in which about half of his tenants pay for their own electricity. “It hurts everybody, but it really hurts the people on fixed income — the older people.” He shrugged. “What can you do?”
Crawford is hardly alone. Residents and business owners across New Hampshire are facing electricity rates that are increasing by between a few percent and as much as about 100 percent, depending on their supplier.
Some are reacting with the same resignation as Crawford. Others are actively pursuing measures to soften the blow by reducing electricity use.
On Nov. 1, Liberty Utilities raised its rates from 7.7 cents per kilowatt hour to 15.4 cents, increasing the average household’s monthly energy bill from $110 to $162. On Dec. 29, the New Hampshire Public Utilities Commission approved a 6 percent rate increase for Public Service of New Hampshire, which serves about 500,000 New Hampshire homes and businesses. The new rate went into effect on Jan. 1. The increase is seasonal, both companies assured. Rates will return to normal six months from the date they were instituted.
“We have heard from customers; they’re not happy,” said John Shore, spokesman for Liberty Utilities. “We’re not happy either. We don’t want to send out higher bills either.” Liberty has instituted programs and held workshops to help customers find ways to save energy.
Jeff Graham, who gets electricity from Liberty, said that he and his wife attended those conferences and implemented changes in their Hanover home. Nevertheless, he estimated that his electricity expenses rose between 30 and 35 percent in December.
“It’s definitely a topic of conversation,” Graham said of the response he’d observed in Hanover. A 30 percent increase “is enough to notice.”
At Durgin and Crowell Lumber Co. in Springfield, N.H., the rate increase means an extra $100,000 in electricity payments for 2015. The company used a third-party provider, Constellation Energy, until the contract expired in December. Now it’s buying from PSNH for an additional 3.5 cents per kwh until it can re-up the contract with Constellation in April.
Malcolm Milne, the company’s compliance coordinator, said that Durgin and Crowell spends close to $1 million a year on energy costs. “We pay more in this region for electricity than anywhere else in the country,” he said. “It’d be nice if we could get that changed somehow, whether it be legislatively in Concord or some other way. It’s definitely not helpful for business to keep paying more and more for energy.”
Within the last three or four years, Milne said, the company has invested in efficiency upgrades. It has replaced nearly 500 light fixtures, two large air compressors, and upgraded severals motors and drives to more efficient models. Even so, it expects to pay $100,000 more in 2015.
“It’s enough where there are certain projects we won’t do,” Milne said.
PSNH attributed the rate increases to a complex convergence of factors.
Limited amounts of natural gas, one of the fuels used to generate electricity, has driven up production costs across New England.
Last winter’s low temperatures and high demand for natural gas, coupled with the limitations of the state’s natural gas pipeline infrastructure, has made the natural gas supply for electricity generation subject to more volatility. Costs for production and sale of electricity have also risen
correspondingly.
In addition, Vermont Yankee and Salem Harbor Coal Plant in Massachusetts both closed within the last year, which, PSNH spokesperson Lauren Collins said, “added to the anxiety about what would happen this winter.”
Shore emphasized that Liberty Utilities is merely passing along the increased cost of power and is not making any additional profit. Because PSNH generates much of its own electricity, the company’s energy supply is more consistent and prices have not spiked as dramatically.
Electricity rates have risen much less dramatically in Vermont because the state relies on hydropower from HydroQuebec for a substantial amount of its power, making it less vulnerable to changes in the natural gas market.
To alleviate future price swings, Liberty Utilities recently announced that the company would be purchasing New Hampshire Gas, a Keene-based propane distribution utility. The acquisition will help “stabilize energy costs and facilitate future growth,” according to a Liberty press release.
The price increase will remain in effect until April 30 for Liberty customers and June 30 for those using PSNH power.
Meanwhile, businesses and residents are trying to cope.
Jeff and Sarah Barrette own the Ink Factory Clothing Co. in Claremont. After watching their PSNH energy bill jump from $550 to $750 a month, they’re already looking into new options to decrease energy costs. Jeff Barrette considered replacing the electric dryer, which dries the ink prints on clothing and consumes the majority of the company’s electricity, with gas equipment. But, he added, it may not be viable.
“There’s not really much you can do,” he said. “If you can pass the cost on, you try to, but I’m not sure that the market can absorb any cost increase. We probably just live with lower profits. That’s usually how it goes.”