Everyone knows that electricity costs have gone up over the past five years. But not everyone knows why, or what has been done to minimize those increases in the Granite State.
An analysis of Energy Information Administration (IEA) data from the past five years shows that New Hampshire electricity costs have risen 15.06 percent, about 3 percent per year. But the other five New England states have seen their costs increase by an average of 31.38 percent, a little over 6 percent per year. That means Granite State electricity costs have increased over 50 percent less than those of our neighbors.
The state-by-state numbers show that Maine has seen the greatest increase at 39.23 percent, with Rhode Island close behind at 38.44 percent. Next comes Massachusetts at 29.37 percent, followed by Connecticut at 26.42 percent. Vermont’s costs have risen 23.44 percent.
And New Hampshire stands out at just 15.06 percent.
All New England states get their electricity from the same place, the ISO-NE grid. So, how could prices have gone up over 50 percent more for New Hampshire’s neighbors? The most likely answer comes down to state public policies that support and subsidize renewable energy and energy efficiency. While New Hampshire supports these policies too, it does so with caution, moderation, and attention to how much these policies can cost.
For example, the New Hampshire legislature in 2022 tied ratepayer-funded energy efficiency costs to the rate of inflation. This restriction will save ratepayers $60-120 million by 2027. By contrast, our southern neighbor Massachusetts spends nearly one billion dollars annually to insulate and weatherproof homes and businesses, a significant cost shared by all electricity customers.
The Granite State has also declined to expand net metering, a policy designed to support the growth of renewable energy, beyond one megawatt, except for municipal virtual net metering (which benefits local taxpayers).
Our eastern neighbor Maine expanded net metering to five megawatts in 2021 and the consumer energy watchdog in that state recently predicted that this expansion would cost state ratepayers $220 million by 2025.
New Hampshire has also implemented regulatory reforms to reduce ratepayer costs, eliminated subsidies for wood-burning electricity generation, and adopted innovations in the support of community aggregation to both bring down consumer costs and offer more purchaser options in the provision of power.
A persistent myth says that wind and solar energy are less expensive than nuclear or gas-fired electricity. But this myth “..fails to take account of any of the ancillary costs necessary to make a fully-functioning grid: the entire system of backup facilities to provide the power when the wind is not blowing and the sun not shining; the transmission facilities to take the power from wherever is windy or sunny to anywhere else it may be needed on a moment’s notice; the batteries or other storage facilities to save up energy in anticipation of inevitable wind and solar droughts,” according to Francis Menton, an energy analyst from New York. Therefore, policy that supports these technologies needs to account for all its associated costs and then determine what qualifies for public support.
Critics have argued that New Hampshire energy policies are “behind” those of our neighboring states and have created a “doughnut hole” in regional energy policy. They believe that reducing carbon emissions ranks higher than putting food on the table for their constituencies. But they fail to understand that the polices they adopt come with serious costs that can do significant harm to fixed income and working families.
Most current Granite State policy makers would prefer to prevent energy poverty from overtaking our fellow citizens. Plus, good energy policy benefits our business community and protects the New Hampshire Advantage, which makes the Granite State economy the envy of our neighbors.
Programs that keep the increase in energy costs to 51 percent less than our neighbors show how energy policy can be done right.
