N.H.'s competitive power market is working
The electricity market is alive and well and helping businesses save on their electricity bills
I remember the excitement back in 1996 when New Hampshire, true to form, became the “first in the nation” to allow electric customers to bypass their monopoly utility and buy electricity directly from the marketplace.
Things have taken a lot longer to grow from there than we all expected, with lawsuits and political fights often blocking the way. But today I am happy to say that New Hampshire’s electricity market is alive and well and helping scores of businesses save on their electricity bills.
In the last two years, the combination of lower prices and enhanced service has quietly helped the competitive market expand. Today in New Hampshire, approximately 60 percent of business and non-residential customers buy their power from a competitive energy supplier.
All the signs point to continued savings opportunities; however, we should also bear in mind that the right to choose an electricity provider must be defended and protected. It’s clear from the debate in Concord over the years that not all in the Granite State favor competition; some want to return to the old monopoly model.
Fifteen years after the adoption of New Hampshire’s choice law, it’s worth reaffirming the benefits of competition for all electricity consumers:
• Lower rates: The biggest opportunity for lower electricity supply rates right now appears to be for customers of Public Service of New Hampshire. That is because competitive suppliers are now taking advantage of clean and abundant energy generated from natural gas while PSNH has doubled down on its investment in costly coal-fired power plants. Lower costs may also be available in other utility territories -- it pays to shop around.
Commercial customers who buy from a competitive supplier are also able to better manage energy spending since they can lock in rates through long-term agreements. To find the best price, some business customers negotiate directly with an energy supplier, while others choose to pay an independent broker or consultant who works on their behalf to gather multiple bids.
• Service: Suppliers offer an alternative to “one size fits all” utility service. Competitive providers can offer purchasing plans that blend fixed and variable commodity prices. That’s important for customers who require a measure of price protection but also want to maintain flexibility if there are sharp movements in energy prices. Service agreements can also include energy-efficiency and renewable energy options and they can extend for multi-year terms.
• Innovation: Whether it’s a new design for an online bill, software that helps customers monitor usage or policy updates that help customers stay on top of ever-changing energy regulation, competition drives customer-focused innovation. Suppliers know that to win and retain customers they must develop new products and services.
A prime example is renewable energy. Many customers have ambitious sustainability goals. By shopping in the competitive marketplace, they can purchase renewable energy certificates (RECs) that offset all or a portion of their usage with clean energy sources.
When a new Legislature is seated next January, energy and electric competition will no doubt be a topic of discussion. Regardless of which side of the aisle they find themselves on, it is important for lawmakers to understand that competitive choice in electricity is finally fulfilling its promise and that free and fair trade in electricity is not only a constitutional right, it is also good for New Hampshire.
Daniel W. Allegretti is New Hampshire-based vice president of state government affairs at Constellation Energy.