Publisher’s Notes: In the report, “Eversource Seeks Rate Hike For NH’s Residential Customers,” published in June, NHLN incorrectly highlighted the default service supply rate filing and the base distribution rate review without providing any context, making them seem like they’re the same thing, which they are not.
Below is a report specifically about the distribution rate increase debate.
Eversource is seeking a base distribution rate increase in New Hampshire, which would impact the delivery portion of electric bills for residential customers. The average residential customer’s electricity bill will increase 17% or approximately $258 annually.
AARP New Hampshire has come out against the request, submitting testimony in January regarding Eversource’s proposal to increase rates for its customers. Most recently, that organization submitted a brief as part of the on-going case before the Public Utilities Commission (PUC), arguing the revenue request is too high, the structure of the rate increase disproportionately burdens residential customers, and the proposed changes to the regulatory process would severely weaken oversight and consumer protection, paving the way for nearly automatic rate increases without proper scrutiny.
“In addition to requesting an enormous rate increase and structuring it in a way that is unfair to residential customers, Eversource has also asked for a new regulatory process that would fast track rate increases with neither proper oversight nor input from the Granite Staters they serve,” said AARP NH State Director Christina FitzPatrick. “Similar schemes in the few other states that have tried it have led to virtually automatic rate increases and ever higher utility bills, harming customers who may already be struggling with rising costs.”
Jamie Ratliff, Eversource Spokesperson, said this to NH Latino News in an email:
“Since our last distribution rate review in 2019, costs to build and maintain the electric system have increased with supply chain challenges exacerbating the rising cost of materials. For example, on average, the cost of a utility pole has increased nearly 30%, the cost of a transformer has increased about 130%, and the cost for a spool of distribution wire has increased nearly 50%. At the same time, we’ve worked to keep the costs we can control down through aggressive management – holding distribution operations and maintenance costs within our control constant overall, despite significant pressure from rising inflation. Due to this responsible approach to manage our budget, our rate request is largely driven by external factors that are outside of our control, such as vegetation management and the rising cost of equipment and materials.”
Currently, Eversource and other utilities must submit a comprehensive request to the Public Utilities Commission to increase its rates, detailing their expenses and explaining the need for them. The members of the PUC then scrutinize this request, gather input from the public, and decide whether the expenses are justified and what constitutes a reasonable rate of return on the company’s investment.
Eversource is proposing a shift to performance-based ratemaking (PBR) in several states, including New Hampshire. This approach aims to tie utility revenue to performance metrics like reliability, customer satisfaction, and cost efficiency, rather than solely relying on traditional cost-of-service ratemaking.
“This case would set a bad precedent for the regulation of other utilities in the state. Every utility customer in the state, not just Eversource’s, needs to pay attention,” said AARP NH Volunteer State President Patrick McDermott.
“New Hampshire continues to experience more frequent and unpredictable extreme weather, resulting in increased damage to the system and higher costs to restore power as a result,” said Ratliff. “For example, four of the 10 largest storms in our history, with respect to total customer outages, occurred between December 2022 and April 2024. This rate adjustment would allow Eversource to continue making targeted, thoughtful investments in the electric system like automation technology, tree trimming, and hardening infrastructure against more frequent and severe storms – which all improve reliability for customers. Thanks in large part to our investments, more than half of all customer outages in 2023 were restored in fewer than five minutes by system operators, excluding storms.”
Ratliff also said Eversource remains focused on continued cost-effective investment and planning that improve reliability and meet the future needs of customers, and a rate adjustment will enable future investments that will continue to strengthen the electric system as well as upgrade aging electric infrastructure nearing the end of its useful life, among others.
However, FitzPatrick stated that “Any potential changes to the traditional method of approving rate changes in New Hampshire need much greater vetting. Such a monumental shift in regulating utilities deserves a separate, comprehensive process and should not be handled in conjunction with a rate request.”