Welcome to the era of Community Power Aggregation

As default energy service prices have soared over the past 18 months -- they currently go as high as 26 cents per kilowatt-hour (for the unfortunate customers of Unitil) -- those who care about the ridiculously high cost of electricity in New Hampshire have been hoping that the arrival of community power aggregation might provide some relief.  Now we know: YES! There is relief available for those customers who live in a municipality that is part of the Community Power Coalition of New Hampshire (CPCNH) and those customers who live in the Keene Community Power communities of Keene, Marlborough, Swanzey, and Wilton.  The initial CPCNH municipalities are Enfield, Exeter, Hanover, Harrisville, Lebanon, Nashua, Peterborough, Plainfield, Rye, and Walpole, though a total of 30 communities have voted to join the coalition.

The CPCNH announced last week (as reported by the New Hampshire Bulletin) that when it goes "live" in May its initial rate will be 15.8 cents -- well below Eversource's (20.2 cents), Liberty's (22 cents), and Unitil's (26 cents).  (There will also be a 100 percent renewable electricity option from CPCNH at 19.1 cents, according to NHPR.) Keene Community Power has announced an even lower initial rate of 11.1 cents, with more expensive options available for customers who want "green" energy.  The highest of those rates is "Keene 100% Local Green" at 13.9 cents -- still below what Eversource, Liberty, or Unitil are offering.

But . . . a word to the wise from the Office of the Consumer Advocate.  Be careful!

"I have been saying for years that community power aggregation is likely to be the best opportunity for residential customers to obtain, at long last, some real benefits from the electric industry restructuring for which they have paid billions in stranded cost charges over the years," said Consumer Advocate Don Kreis.  "These initial rates show I was right.  But the initial community power rates also prove that nobody is exempt from the realities of the wholesale electricity market in New England."

Consider, for example, that New Hampshire's customer-owned utility -- the New Hampshire Electric Cooperative -- currently has a default energy service rate (marketed to Co-op members as "Co-op Power") of 13 cents.  That's lower than the initial CPCNH rates while, at the same time, offering something of a benchmark for those who wonder what happens when a New Hampshire utility actively manages its wholesale energy portfolio.  Currently, by order of the Public Utilities Commission, the investor-owned utilities (Eversource, Liberty, and Unitil) do not manage their wholesale power purchases actively -- they just put out an RFP every six months and sign a contract with the low bidder or bidders.

Even more importantly, consider how long the rates just set by the CPCNH and Keene Community Power will last.  For example, Keene Community Power's initial rates will be in effect through December of 2025.  The 11.1 cent rate looks like a bargain now, but what about 2025?  Will electricity prices come down?  Well, consider that in New England, because of our hyper-reliance on natural gas to produce electricity, wholesale electricity prices fluctuate with natural gas prices. After peaking at about $10 per MMBtu last Sepember, natural gas prices at the Henry Hub (i.e., the benchmark price) have declined to less than $3 per MMBtu and futures prices are trending in the $4 range for the next year or so.  This might account, at least in part, for the fact that the CPCNH rates are expected to change after their first three months -- a lock-in strategy that is quite different than the one adopted by Keene Community Power.

Given these realities, it is useful to keep in mind exactly what we mean when we say "community power" or "community power aggregation."  Since 1996, New Hampshire law has allowed municipalities to buy wholesale power and resell it to homes and businesses within their borders.  Nothing happened until, in 2019, the Legislature authorized communitty power aggregation on an "opt-out" basis, meaning that if you live in a community power town or city you will default to the local community power plan unless you affirmatively elect not to participate.  Look for a written notice to that effect -- the law requires it!

It appears that if you are participating in net metering with your utility, you have to stay on the utility's default energy service in order to continue to get credit for excess power exported to the grid.

No matter where you purchase your electricity -- community power, competitive supplier, or your utility's default energy service -- it pays to keep an eye on what you have and what alternatives are available to you.  Also, don't forget that these electricity services are just part of your monthly bill -- your local utility can and will still charge you for distribution service and transmission service (collectively, the poles and wires) along with the stranded cost charge that pays for energy efficiency programs and the Enegy Assistance Program that helps low-income customers.

Thanks to Hadley Barndollar of the New Hampshire Bulletin and Mara Hoplamazian of New Hampshire Public Radio for their excellent reporting on these initial community power rates.