Tuesday, September 30, 2014

Soaring Prices in New England: An Update And Another Update

Electricity Prices Rises in New England, Updated

Golden coins
On Saturday, I posted Electricity Prices Soar in New England. And Soon In Vermont. In this post, I used two examples of recent rate hikes: National Grid in Massachusetts is raising rates by 37%, and Liberty Mutual in New Hampshire is raising rates by 50%.

Since then, New Hampshire Electric Coop announced a rate increase of 12%. Public Service of New Hampshire, which owns the Merrimack Station Coal Plant, expects only a slight rate increase. Another New Hampshire utility, Unitil, will soon file for a winter rate.  NHPR reports Electric Co-op Latest Utility To Announce Rate Increase.

Hah!  This just in! Unitil (New Hampshire utility) announced that the close-to-100% price rise on the grid (8.4 cents to 15.5 cents) will cost Unitil customers an extra $42 per month, starting in December. Unitil Electric Rates to Rise $42 per month.

Price Mealy-Mouthing in New England, Updated

Meanwhile, closer to home, Green Mountain Power and its sister utility, Vermont Gas Systems, explain that they are efficient and will therefore have stable prices. (This seems to imply that neighboring utilities are inefficient.) WCAX reports: GMP and Vermont Gas Keep Stable Prices. 

Both GMP and Vermont Gas are wholly-owned subsidiaries of Gaz Metro.

My own interpretation of the GMP statement about stable prices is quite simple: they aren't announcing the price rise just yet.  Gaz Metro companies don't always announce things promptly, as far as I can tell.

For example, the Vermont Gas pipeline expansion will cost $120 million dollars, which is $35 million more than regulators approved. Vermont Gas knew of the overrun in March, but did not notify regulators until July (meanwhile, Vermont Gas kept building the pipeline). Vermont Gas was fined $35,000 for this delay in notification.  Vermont Digger reports: Vermont Supreme Court Clears PSB to Reconsider Vermont Gas Pipeline.

A Well-Written Report from Conca at Forbes

Meanwhile, at Forbes, James Conca has an excellent post (including a link to my Saturday post): Closing Vermont Nuclear Bad Business for Everyone. He shows how closing Vermont Yankee is hurting our neighboring states.  It is a pleasure to read a good post about our area in the national media. I also urge you to read and join the lively comment stream on that post.

Consumer Liaison Group

I was just elected to the Coordinating Committee of the Consumer Liaison Group (CLG) of the grid operator, ISO-NE. I am one of two representatives from Vermont on the committee.  The group exchanges information with ISO about policies that affect consumers.  It also advises ISO.

I went to the CLG meeting September 24, but that is a subject for a whole different blog post. As you can imagine, however, the coming price rises were a major topic of discussion.

More updates soon.

Update again:  

Berkshire Eagle reports that National Grid price rise will cost homeowners up to $100 a month more on their bills and cost even more to businesses: National Grid Customers, Lawmakers Charged Up about Rate Increase.

Update: Some People Love Expensive Electricity An important post from Rod Adams: a review of the philosophy of people who celebrate the price rises because "the only way to guarantee that energy conservation measures are diligently pursued in this country is to make energy a very precious and expensive commodity. " (This quote was part of a comment on James Conca's article in Forbes.) Rod's post: Purposeful Price Pumping By Constraining Supply


Dr. John H. Bickel said...

Gee, where is Ralph Nader and all the student activity fee funded PIRGs jumping up and down about the rate increases and its impact on the poor and lower income folks??

Rod Adams said...


I've just spent some time poking through the comment thread at Conca's Forbes article about the effect of closing Vermont Yankee.

There is a commenter there by the appellation of "Beta Blocker" who has posted some amazingly forthright comments about the intent to drive supply out of the market for the specific goal of dramatic price increases. The idea is that high prices will force people to conserve power; Beta Blocker asserts that is the only way to reduce emissions in the long term.

It is a frighteningly elitist view of the world and fails to mention the enormous corporate profits that result from higher prices for those established suppliers who are NOT pushed out of the market.

I'm thinking, of course, of the ever so warm and fuzzy "clean natural gas" suppliers.

I'm working on an Atomic Insights post highlighting Beta's comments.

Rod Adams
Publisher, Atomic Insights

Meredith Angwin said...

PIRG claims to be about the "little guy" but it is really about Green as in "making money." I suspect they are happy if prices go up because higher prices "lead to conservation" and enriches their donors.
Rod...what can I say except: Great! That will be a terrific post! This person is hiding behind a pseudonym, but there are plenty of people willing to say it right out loud: we use too much electricity and high prices will cause us to conserve!

Meredith Angwin said...

Rod...you posted already! Fabulous! I'm going to amend this post again to link to your post.

Anonymous said...

Poster Beta Blocker, like many efficiency/renewables advocates, seems to have no problem allowing energy price to be the arbiter for who does and does not get adequate energy supplies. Such a scheme is okay for non-essential luxury items like Maseratis and fur coats and rhodium jewelry, but it is a harsh and regressive system for basic commodities like energy. And it hurts the poorest and most needy among us, who can afford neither high energy prices nor the cost of making "efficiency improvements" in their dwellings or transportation (i.e., buy a Tesla or a Volt). So those people will either be driven further into poverty or be forced into yet more government handout programs, which the rest of us pay for. If one advocates for a fair and compassionate society, where lifting as many people as possible out of a life of poverty and misery, high energy cost is the last thing you should want.

Anonymous said...

It would be nice if the people affected would connect the dots from the price increases to the insane (from a southern US perspective) determination of the green movement to shut down every reliable source of supply to New England, but that's probably too much to ask.

What it comes down to, over and over, is "limited supply=high prices."

It's a curious feature of the northeastern markets that supply decisions made in one state such as Vermont can have a disproportionate effect on other states. I think I read here that during the polar vortex most of the output of Indian Point was going into the New England system and may have saved it from total collapse. I wonder if any New England governor would raise the point to Gov. Cuomo -- if I were a New England ratepayer I would want to know why they are not!

Rod Adams said...


Your equation "limited supply=high prices" is the fundamental basis for my theory that most major "environmental" groups derive the majority of their funding and political clout from the economic establishment that benefits from higher prices.

Even when groups like Greenpeace take action against the oil and gas industry, their most common targets are NEW sources like Alberta oil sands, Arctic exploration, fracking, and deep water. They rarely, if ever, expend efforts protesting the daily operations of existing facilities extracting and moving 90 million barrels of oil per day.

Cartels like OPEC always work by establishing production agreements that restrict overall supply to keep prices at profitable levels. It is far more warm and fuzzy if the action to restrict supply comes from an ideological environmentalist wearing a tie-dyed tee shirt and waving a sign.

However, in many cases, someone is paying that sign waver a decent wage and also footing the bills for all of the behind the scenes organizing and PR required to make the protests visible and politically impactful.

I developed part of my cynicism when my wife worked in development at a major regional environmental organization and I learned more than I ever wanted to know about where their money originated.

Rod Adams
Publisher, Atomic Insights

Greg London said...

I don't think high electrical prices will force people to "go green". I think it will cause a lot of people to say "screw global warming drowning the coastlines in ten years, I want cheap power now." and then they'll support burning coal, tar, and their grandmother if it'll lower the price of electricity.