Is there a power crisis in New Hampshire?
By Sanders, Bob | |
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The
His energy bill (which also includes electricity) rose from
And as the demand for natural gas increases, "we are going to have the same problem year after year," said Biederman. "It's going to be astronomical. There is a real power crisis coming to the Northeast. If it spreads to electricity, it's going to price us out of business."
Cheap natural gas - extracted from shale in a process known as fracking - has been a boon for the national economy, but because of the lack of pipeline capacity, it has been the bane of
Biederman managed to survive the price spike because he has a diesel generator backup. But Gorham Paper and Tissue didn't have that option, and it shut down for weeks earlier this winter.
Disappearing savings
Natural gas costs aren't just affecting businesses that power directly from gas, but those that depend on the spot market price for electricity, which is tied to the price of gas.
Just ask
Before this winter, LaBerge had saved nearly
LaBerge knew he only contracted for two year fixed rates, but let it slip. Still, "they should have called me," he said.
The company did try to contact all its cus tomers, said
For years, the utility has been making the argument that those who purchase power elsewhere should pay for the generating assets it uses, especially its Bow coal-fired power plant with its new
Those assets, idle much of the year, have kicked into overdrive during the last two winters, saving PSNH customers
"Our state-regulated power plants serve as an important insurance policy for our customers, and they have certainly proved their worth this winter," said
But on the very same day, the
That figure has gone down from 58 percent in October, to 54 percent in December, as some customers return to PSNH to weather the winter. Residential customers are still leaving, though at slower rate. In December, more than a fifth (23.2 percent) received their electricity from alternative suppliers, which have successfully recruited new customers, despite some well-publicized hiccups, both involving suppliers to aggregator
The previous year, PNE Energy Supply (which shared ownership of
This season, it was
"PSNH serves a useful purpose as a provider of last resort," Fromuth said.
"It appears he is enjoying all the benefits and doesn't want to pay the costs," said Murray when told of that remark.
Not so, Fromuth replied. Instead of trying to pass on the cost of maintaining generation assets onto those not using PSNH power, why not simply charge a different rate for those who come and go?
"PSNH is free to walk to the PUC and design a rate for short-term customers, a sort of Chinese menu," he said. "Their pricing shows some lacking in imagination."
Generation assets
Unlike other competitors, however, Fromuth said he wouldn't mind if PSNH holds onto its generation assets. "I'm not one of the' ones who was clamoring for divestiture."
And now that cheaper natural gas prices have allowed real competition to enter the energy marketplace, "
True, he admitted, the seasonal price hikes "have some people thinking twice. (But) that doesn't change the basic reasons for leveling the playing field. Ratepayers shouldn't assume the risk. Market forces do that."
State officials are thinking twice.
Despite the staff report, the PUC has not moved toward divesture. Instead, it deferred to
PSNH agreed to the bill, prompting the
"The utility is responsible to ensure that we have a power supply that is available thick or thin through cold weather, through hot weather, through competition, through elimination of supply sources. I know I don't want to give a public body authority to tell them that they can't manufacture what they sell," said Rep.
Nevertheless, the bill passed on a 185-134 roll call vote. It is now up for debate in the
Of course, PUG cases last for years, especially a complex one like this. And, unfortunately, any solution to the natural gas spikes may be even further away.
Electric generators and some manufacturers (like Nylon) are reluctant to commit to such long-term contracts, since - overall - it is cheaper to buy the leftover gas on the spot market. That doesn't mean that pipelines aren't expanding, since homes are increasingly switching from oil to gas. Tennessee Gas Pipeline is working on a Northeast expansion project that would result in 250 miles of new pipeline, but that isn't enough to serve the electrical generators.
This has
Indeed, just to make sure there is enough electricity during peak periods,
But that idea would have to be approved by the
Such an idea is "innovative," in the words of
Even so, a recent report issued by the
"By the time they fix it, it will be too late," said Biederman. "Natural gas is cheap, but not cheap if everyone is switching to natural gas and there isn't a way to get it here."
The only thing that is going to happen in the short term is an investigation. On
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