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PSNH rate-hike bid has customer of rival utility expecting trend

New Hampshire Union Leader

May 03. 2014 10:26PM

"Here we go again."

That's how Manchester resident Tom Shaughnessy greeted Friday's news that Public Service of New Hampshire plans another rate hike on July 1.

Shaughnessy switched last year to buying electricity from a rival company, North American Power, but he said his electricity costs are still likely to follow's PSNH's.

"If PSNH is raising their rates, everyone's going to get that rate increase," he said. "Because they all follow PSNH's rate. That's the way it is."PSNH is projecting a 1.7 percent rate hike for customers starting July 1, citing last winter's high fuel costs.

An average PSNH energy customer using 500 kilowatt hours of electricity a month would pay $93.55 a month, compared with $91.99 currently. That same customer paid $87.75 the last six months of last year, said PSNH spokesman Martin Murray.

That would mean a 6.6 percent year-over-year hike if PSNH sticks with its forecast and the state Public Utilities Commission approves the request.

PSNH said it encountered high energy costs last winter when it had to buy power on the open market.

The energy service charge, which includes the cost of power, is forecast to climb 8.2 percent from Jan. 1 to July 1, Murray said. That rate is projected to stand at 9.98 cents per kilowatt hour.

"The reason it is increasing this year is because of extreme volatility in the regional marketplace as a result of mainly the supply and volatility of natural gas, which the region is increasingly dependent on," Murray said Friday.

The way Shaughnessy figures it, he has more to lose than most. A year and a half ago, he built his home with geothermal for heating and cooling, and that relies on electricity.

"There's probably not a house in Manchester that is more affected by electricity charges than me," he said.

After he switched to North American Power last year, that company raised its rates. His electric bill went up $350 in one month.

"I went bananas," he said.

Shaughnessy stayed with the company but changed to a plan that caps rates at what PSNH charges. And that's why he expects his electric rate will go up this summer if PSNH's projected increase kicks in on July 1.

He figures the increase would add $20 to $30 to his monthly bill.

PSNH is required to provide a forecast to regulators ahead of its official rate filing to adjust rates effective July 1.

"The numbers could certainly change in June," Murray said.

That happened late last year when the initial forecast of 8.96 cents per kilowatt hour for the energy service charge was changed to 9.23 cents.

Murray said a migration of customers away from PSNH to independent suppliers reversed during the winter and the company had to buy energy from the marketplace to fill the demand.

"Independent suppliers have acknowledged that they move customers back to PSNH when market prices are higher than our Energy Service rate," Murray said.

"That requires us to then purchase higher-priced energy from the market to meet demand above and beyond what our more economical power plants produce," he said. "Part of our July 1 adjustment is to recover the incurred cost."

New Hampshire Sunday New reporter Shawne K. Wickham contributed to this report.

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